Sunday, Aug. 24, 2014

Tournament Trading Strategies

Part 5:

Tournament Trading Strategy

A strategy I used in the World Cup was to lay what I thought was an underpriced team, in Holland. That might sound like gambling and not trading, but by backing them to qualify from their group, then each of their second round games, using a progressive staking plan, I would have, at very worst, had a small loss if they went on to win the cup (but this would probably have been a profit as they were clearly underpriced in the outright market) and would have guaranteed a profit if they didn’t win (which they didn’t).

For example, Bet365 currently have Newcastle at 16/1 to win the FA Cup next season. At the time of writing, they struggled to draw with a Lillestrom, at St. James’ Park, in the Inter-toto cup. In my opinion, teams like Tottenham (also 16/1) and Bolton (40/1) have a better chance. Also, it’s been proven down the years that teams who enter the Inter-toto cup struggle later on in the season. I realise they will buy players in the summer, but, I’m still confident they are underpriced, so I’ll wait for the betfair market to catch up and try and lay Newcastle at around 19.0. In this example, I’ll use lay £100, giving a liability of £1900.

Next, I wait for their first FA Cup game, and back them to qualify into the next round. Assuming they meet a lower league team their odds should be about 1.17 to qualify (after commission), depending of course on the team they meet and the venue. I back then them in this single match for £90. If they lose, I lose £90 on backing them, but securing a profit by winning my £100 lay on the FA Cup outright market. If they win, my £90 back, returns £105.30 after commission.

This £105.30 is then put on backing them to qualify from the game in the next round. They should, theoretically, be playing a stronger opposition now and I’d guess they would be around 1.46 to win (after commission) and I’d back them to qualify. If they lose, you lose your £105.30 bet, but only £90 of that was yours to begin with, so you make an overall profit from the £100 lay in the outright market. If they win, your back bet was successful and returns £153.74 after commission.

Next, in the 5th round, one would expect them to meet another Premiership team, if they haven’t already. The price largely depends on who they meet, but supposing they meet a mid-table club, they should be around evens to qualify, if at home. So we’d back them to win the game at around 2.00 after commission for £153.74. If they win £307.48 is returned. Again, if they lose, you make a profit from winning the £100 lay.

In the quarter-finals, you’d expect another close game and in this example, I’ll assume to odds of Newcastle to qualify to the next round are evens again. £307.48 would return £614.96, if they qualified and if they lost, you’d make a small profit on the lay in the outright market.

Sooner of later, Newcastle will meet one of the big teams, if they haven’t already and in this example, I’ll assume they meet a Manchester United, Liverpool, Arsenal or Chelsea in the semi-finals. At the very least, one would expect them to be around 3.00 to qualify and so, the £614.96, built up from the previous games, would return £1844.88, if they won. And again, if they lose, you make a small profit on the £100 lay, when the £90 of your initial back bet is deducted.

If Newcastle did qualify past the semi-finals, there would be a very high chance that they’d meet another top team and would be about 2.75 after commission to go on and win the cup. You probably know the routine by now, but we’d place £1844.88 on backing them to win the cup. If they did win the £1844.88 would return a staggering £5073.42. Even after deducting the £1900 you would have lost on laying Newcastle outright, you’d still have over £3000 in profit! However, if they did lose, you’d still make a small profit from winning the outright lay.

If you got to this stage, an alternative would be to stake only some of the £1844.88, so you still make a lot of profit, whatever the outcome. For example, if we backed Newcastle to win the final for £1000 (instead of £1844.88) we’d make £850 profit, overall. However, in the likely event that they lost, we’d still be making just under £850, instead of only £5.

A word of warning, however, and this concept is very important. It’s very important to remember that you need to back them ‘to qualify’! Backing them to win the game could be disastrous if they drew and won the replay.

Also, a further point to add to this is that I anticipate that Newcastle may have a poor start to the season anyway (although the Inter-toto cup may initially work in their favour as they should be match fit). If this happens, their FA Cup outright price should shoot up, in which case, I can back at higher odds and lock in guaranteed profit regardless of how well they perform so you wouldn’t even need back them in their FA Cup games.

Now, the FA Cup is a bit of a bad example in that it is a long competition and would tie your money up for many months. It’s also worth noting that it’s impossible to predict what calibre of team a club will be facing, which is always worth considering before placing the initial bets. However, this strategy could be used for tennis, golf or any other cup knockout competitions, too, which finish very quickly.

Finally, as well as laying a team and backing their individual matches, you could back an overpriced team in the outright market and lay their individual matches. This probably suits people who don’t have a large enough bank to make a useful amount of money by laying a team/person at large odds.