England v New Zealand

A very volatile market last night and I suspect that there were plenty of big winners but also plenty of big losers. Layers of each side at 1.3ish would have done very nicely as the market swung back and forth from around this mark on a number of occasions.

Unfortunately I was not one of the winners. I typically get involved at lower odds and use the greater leverage lower price points provide. By the time these points were reached it was an NZ train and my stops were hit giving me an all red book of £45ish (I haven’t got into the habit of taking screenshots after games but will try to do so in future). No serious damage and the way the game panned out I was only one boundary from a reasonable win. That may sound like a version of the losing gambler’s oldest refrain but I am comfortable that by staking correctly and leveraging such situations over and over I will be well ahead long term.

Volatile games such as these are often characterised as “trading heaven” but of course they are only trading heaven if you are on the right side of the swings and that is not as easy as some like to make out. I will post something on the subject in the future.

England v India

Interesting markets on yesterday’s England v India game. Sod’s law dictated that I was with the family all weekend so did not get chance to trade it… what an opportunity missed! To make matters worse I was listening to TMS in the car and was unable to capitalise on a spot that would have netted many thousands in profit had I been in front of the computer.
 
The weather meant that the completed match market was all over the place. Those at the ground filled their boots as it swung this way and that. When play eventually resumed the ICC had made it clear that any more rain would mean the game would be called off completely (I’ll ignore the fact that with floodlights play could have gone on until late). So when the rain came after a few overs of play people steamed in to the completed match market. From memory “No” was trading at 1.5x at the time. In a matter of seconds it was down to low 1.0x.

This is where the entry opportunity arrived. TMS announced that the ICC had decided that play could go on to 8.30 pm, notwithstanding what they had said before the play started. On hearing this news the guys in front of their PCs filled their boots. The price quickly blew out to 1.8x. Here is one photo posted on Twitter by Bossman, writer of the megarain blog:

Great work Bossman. Gutted to have missed the opportunity but there will be others.

An interesting postscript to this is that it turns out the ICC match committee had made the decision to extend to 8.30 on Sunday morning but had not announced it! The guys that piled in on “No” when the players went off are no doubt seething.

 

Weather trading is an important adjunct to cricket trading. If you are not adept at both there will be plenty of occasions when you're sat around waiting for the skies to clear and having to listen to Nick Knight!

Twitter

After a fair amount of struggle I have finally managed to add a Twitter gadget to the blog. As with the recommended blogs this feed includes those guys who know what they are talking about so it will hopefully prove useful.

Recommended Blogs

I have added links to the sports trading blogs I read on the right. I have not added just any old blogs. If you are serious about trading I recommend that you read what these guys have to say. They know their stuff.

What is this blog about?

Good question; and not one I really know the answer to at this stage. To be honest it may die on its arse after a few posts but let's see how it goes.

A bit about me. I have a background in derivatives trading and swapped life in the City for life on the betting exchanges a few years ago. No matter what anyone tells you trading principles apply equally across all risk markets whether you are looking at the LIFFE or the match odds market of a game of cricket.

Fear and greed drive all markets. Humans are subject to a number of cognitive biases and heuristics (mental shortcuts) that make trading risk markets an alien concept. It is as a result of these shortcomings that rational, emotion-free traders that take a quantitative approach gain an edge. That is not to say that the quantitative approach is the only way to make money, the legendary Warren Buffet demonstrates as much, but for those of us below the genius IQ level the qualitative approach is very difficult to master.

There are of course differences between the sports and financial markets, the most significant being the interrelationship between prices in sports markets. In these markets, on the betting exchanges at least, the prices will almost invariably result in a near 100% book. This means that if the odds of one selection shorten the odds of one or more of the other selections must drift to maintain the 100% book.

My approach to trading is generally contrarian or "going against the crowd" usually in-play. By doing this at the right times it is possible to take advantage of overreactions (the "fear" and the "greed") in the markets.

I will talk more about each of these subjects in future posts.

Sri Lanka v Australia

A reasonable result. Interesting dynamic to this game as Aus had to reach the target in 29 overs to qualify. They didn't manage it but nearly scraped the win.