Tennis Hedging Strategy

A couple of times over the past month, I've had a look at trading tennis matches in-play.

These matches generally have high liquidity, but can be very jumpy. I made small gains, but it's clear to me that in order to trade such markets successfully it's essential to have live pictures, or at a minimum, live scores. Even the official 'live scores' direct from the tournament website can be some minutes behind the play, making it very difficult.

This led me to think about an article I'd read some time ago by Peter Webb of Bet Angel fame. I don't have it to hand but, from memory, he was suggesting that, irrespective of your opening position at the start of the match, you can place a closing trade which will have a high probability of being matched - as long as you are not greedy.

Again, relying on memory here, I think the figure he quoted was around 90%.

With that in mind, I did the following in the recent Pacific Life tournament....

At the start of the men's quarter finals, I placed an opening trade of £2.50 just before the start of each match. I then hedged each game looking for a profit after commission of 20%. I then carried all winnings and stakes forward to the respective semis and did the same again.

Actually, I missed one of the qtrs as it was on at 2am and I couldn't be bothered staying up. I missed another when Haas had a runny nose and pulled out giving Federer a bye into the semis. In those cases, I just carried the £2.50 on to the next match.

To cut a long story short, after the semis were complete, I'd made a 35% profit for little work on my part.

I now intend to do the same when the men reach the quarter final stage in the Sony Ericsson Open currently under way in Miami. I'll carry the profit and original stake over with a view to increasing my tennis bank in this manner from the original £10.

Update 12 Apr 2007 - You can find further details at Tennis Hedging Strategy - Revisited.

5 comments:

TheOddsTrader said...

Tennis is my favourite trading sport together with basketball. It takes time to master, but when you do (i don't say i do yet, but i'm making a decent profit) it's probably the best market on betfair.

I see that you also use BDI. Good to see that i'm not alone, sometimes it feels like everyone is using BetAngel. The new charting function is just great!

TheOddsTrader said...

By the way, your blog seems really promising. Going directly into my RSS-reader!

Cheers!

Alistair said...

Cheers oddstrader, always good to get feedback from visitors.

The charting facility on BDI is indeed great. It was the one thing that was missing from an already fine application.

David Allen said...

Hey there I am another BinarySoft BDI user, I find it great as I can use native on my Mac, I hate having to open up Windows just so that I can trade on Betfair.

I have 2 trading blogs at the footytrader.com and also wizardgold.com/wordpress

I was trading forex as well as trading Betfair but the financial turmoil bombed me out of it a couple of weeks ago.

At the moment I am doing the matched betting thing to scoop up the freebies from the bookmakers but my favourite trading is with the under 2.5 goals market. Generally I place the back bet on the unders at the start of the game looking to trade out at 5 or 10 minutes.

Looks like you are a linux user, Ubuntu seems popular at the moment. Got to be better than using Windows especially when money is involved and you need some security.

Your blog looks great and I will add it to my RSS reader

Alistair said...

Cheers David, thanks for the comments.

Despite being a Microsoft Certified Systems Engineer, I've completely moved over to Linux now, at home anyway. Over the years I've become more and more disenchanted by the Seattle behemoth and the virtual world wide monopoly it runs.

The final straw was Office 2007 and the new interface which has wasted countless hours of productivity.

As a result of moving to Linux, I'd given up on the idea of trading until I discovered BinarySoft BDI. A great program, which seems to get better by the week.