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Introduction Betfair trading. You’ve heard about it before I’m sure, and maybe you’ve not traded before because it seemed a little too hard. Well this free report goes some may to de-‐mystifying trading. You’ll find as you read through this report, that Betfair trading really is easy, IF you have a plan. If you have a plan when you enter a market to trade, you’ll be as happy as Hannibal Smith who “loves it when a plan comes together”. The 2 plans I have for you are for the football and tennis markets, as these are the best trading markets. I have deliberately chosen easy to follow strategies in order to showcase the key elements of trading: The relationship between back and lay odds. What happens to the odds when players/teams play well or poorly. How to determine when we enter a market in order exploit teams particularly who are playing poorly. With the Football Season around the Corner, and Wimbledon just finished, there will be yearlong tradable opportunities from these 2 strategies alone, and these will give you a firm grounding into the concept of trading. There are more advanced strategies, but why complicate matters at this moment in time? With the 2 strategies here, you’ll be involved in a niche, and have a great opportunity to profit consistently. So onto “Betfair Trading Made Easy”… In this Report, I will be introducing you to the basics of Sport trading on the leading betting exchange Betfair. By the end of the report, you will have a good foundation to making sports trading work across all of the sports markets at www.betfair.com. We will begin with a look at what exactly trading is, in the context of sports and the betting exchanges. I will pass on my own personal definition of trading, and will introduce you to the relationship between back odds and lay odds and how this relationship is the key to trading. I will then focus on the major tradable markets on Betfair. As I said, my specific focus will be on football, and tennis. We will then look at a Trading Plan of Action, and then the real key to your success as a trader. And that is...... (drum roll please!)….. SOFTWARE. So let’s start at the beginning. How did sports trading evolve? And what, exactly, is sports trading?
Betfair – the key to sports trading Readers of this report will no doubt be familiar with Betfair, the leading betting exchange. I will not go into detail, suffice to say that it allows us the facility to back a selection and to lay a selection (laying can be defined as backing something to lose!) It is this relationship between the back odds and the lay odds which enable us to trade successfully. And trading is only really achieved in in –play betting markets. (I admit that we can trade pre-‐ match/race betting markets but in these cases we are reliant on swings in price and reading the market. My in-‐play trading market strategy is far more reactive to events and easier to implement.) Here’s a real example of trading in action in an in-‐play betting market. Note especially the relationship between the back and lay odds. It’s Wimbledon. Serena Williams is playing Zheng. Let’s join the match on Betfair.
Zheng has won the first set (arrowed above). This is a surprise to Betfairians as you would expect Serena Williams to be utterly dominant. The odds for Serena Williams are currently priced at 1.96 to back and 1.98 to lay. She has lost the 1st set and it’s 2-‐1 to Zheng in the 2nd set. The market determines this match as pretty even.
Let’s return to Betfair and see how Serena has progressed. Serena Williams has won the 2nd set. Her odds are now 1.19 to back and 1.2 to lay. So, Serena’s odds have reduced from 1.96 to 1.19 to back. Why? Well, at 1.96 the match was well poised in the 2nd set, and Serena had lost the first set. At 1.19 Serena had won the 2nd set. The match is therefore all square and the market believes that Serena Williams is closer to winning the match (winning the match is represented by 1.01 odds) than she was at 1.96. Make sense? Odds shorten when an outcome is more likely to occur. (Player/Team playing well). Odds lengthen when a team/player/horse is more likely to lose. (Player/Team not playing well). If a player is more likely to win a match, their odds will begin a gradual journey from where they are at present ( 1.96 for Serena Williams) to 1.01 which indicates the win. Let’s look at Zheng here. A set up and 2-‐1 in the 2nd set, her odds were 2.02 to back and 2.04 to lay. In decimal terms, 2 represents an evens chance, so the market cannot split Serena and Zheng at this stage, pricing them up nearly as evens (or 50/50) chances for success. Having lost the 2nd set, Zheng is less likely to win the match than when she was a set up. Her odds reflect that lack of confidence and have drifted out to 6 to back and 6.2 to lay. When a player is unlikely to win, their odds begin a journey away from 1.01 –their odds get bigger and bigger. And here’s a quick snapshot to profiting from this fluctuation in odds.
Note here that I use specialist software called Fairbot from Binteko I do this because it is the key to trading success. You are at a huge disadvantage when trading on Betfair, if you only use www.betfair.com itself. Trading software does all of the calculations for you, can incorporate stop losses if needs be, and will auto refresh your screen, as well as provide you with a constantly updated profit and loss figure regarding a specific trade. Now, I want to show you here how the fluctuation in odds can return a trading profit. STEP 1 – Back Serena Williams at 1.96 odds while the match is 1 set to love in favour of Zheng.
The arrow bottom right reflects the fact that I have just backed Serena Williams at odds of 1.96 for £44. This screenshot is taken of a Betfair screen as represented by Fairbot. The Betfair Screen at www.betfair.com will be different although the principles, obviously, remain the same. The screenshot below shows the profit figure in green (arrowed) after Serena Williams’ odds have reduced to 1.38. Why have they reduced? Well, Serena Williams looks likely to win the 2nd set, and consequently more likely to win the match outright. So she is in a better position than she was at that moment in time when her odds were 1.96. (As I mentioned earlier, Serena is playing better and this is translated as her being more likely to win the match than when she was playing poorly enough to have lost the first set – remember a winner’s, or likely winner’s odds will begin a journey towards 1.01).
I can realise an £18.82 profit (arrowed) because of the shortening in Serena’s odds (reflective of her positive performance on court during the 2nd set). STEP 2 -‐ I now realise this profit.
The relationship between back and lay odds, particularly in an in-‐play betting market, can be seen at the bottom right of this Fairbot screenshot. I backed Serena at 1.96 odds during a period of the game when she was struggling. I now lay Serena at odds of 1.39 during a period of the game when she is dominating, and realise a £17.16 profit (known as a green screen – see terminology section) on both players.
This match can continue and quite frankly I don’t care who wins because I make £17.16 regardless, as seen in greater detail below.
The above example distils all the fundamental elements to trading. We see www.betfair.com which provides tennis, football and horse racing betting in-‐play. Because the markets go in-‐ play, there will be fluctuations in odds (odds will rise if a player is struggling at a particular point in the match. Odds will shorten if a player is dominating and winning points at a particular point in the match). There is a distinct relationship between the back and lay odds which enable trading. This is unique to the betting exchanges which allow us to back a selection to win and back a selection to lose (called LAYING in this context). Software makes realising profits much easier and is a must. You cannot trade as efficiently using www.betfair.com, despite the introduction of their “cash out” facility will allows you to create a green screen via the website itself with one click of a mouse.
The Major Markets to Trade Quite simply, you can trade all markets at www.betfair.com which Are in-‐play Are liquid IN-‐PLAY Betfair has improved immeasurably since the early days (when I joined), and now has a dedicated site specific to IN-‐PLAY betting markets. It’s easy to access, as shown below.
By clicking on the In-‐Play icon in the menu, you will access the dedicated In-‐Play site whose In-‐Play Planner provides you with a chronological look at all of the in-‐ play events, categorised by sport, for that day. I would recommend a focus on tennis, football, which coincidentally appear at the top of the In-‐Play Planner above. Whilst I would recommend these 2 sporting areas only for trading, you can of course trade other events such as Rugby Union 6 Nations, the Golf, horse racing, even Big Brother and X Factor. But a key point you must consider is the Liquidity. LIQUIDITY It’s all very well finding a market in which you have sniffed out a great trade, but what if you cannot actually execute that trade because there is no money in the market. Let me quote from an options trading book and you’ll see the liquidity issue is a key not just for sports traders but for financial traders too. “The two best options markets are the S&P 100 Index Options... and the FTSE 100 Index Options... because both the OEX and SEI have high volume and high open interest which means high liquidity. High liquidity is important because when you want to close out a position you will get a fair price if the market is liquid. If the market is not liquid, you will have a hard time finding a buyer for your position and, therefore, you might not be able to get a good price for closing a position.” (Jon Schiller – The 100% Return Options Trading Strategy)
Identifying Liquidity on Betfair Quite simply, the more matched money, the more liquid the market. Here’s a superb example from that Serena Williams v Zheng match.
Look at the Total Matched figure arrowed above. £6,220, 853. £6 million! Now that’s a liquid market. Now here’s an illiquid market: Below is an early screenshot of a friendly pre season match between Arsenal and Manchester City.
Look at the Matched Figure to determine liquidity. Currently GBP 10,886 has been matched for this game. That is an illiquid market. Further clues? Look at the amounts waiting to back and lay teams.
£26 is waiting to back Arsenal currently, £32 is waiting to back Man City currently, and a whopping £12 is waiting to back The Draw. Contrast this with the Serena Williams match.
£5,376, followed by £4,480 are waiting to back Serena. £6,630, £4,647, and £4,748 are waiting to lay Serena. The above is a liquid market, and a market in which you can execute your trades at the best available price. We now know that in order to trade successfully, we need a betting market on Betfair which is In-‐ Play and has enough liquidity to enable us to trade. The next step is specialisation, or finding your niche.
Finding your niche If you narrow the point of your focus to one sport, and even a subsection of that sport (e.g. football; a subsection of which could be over and under 2.5 goals; a further subsection could be over 2.5 goals only), you will greatly improve your chances of successfully executing trades. I specialise on the following markets for trading profits: Football – Betfair’s In-‐Play menu includes a greater number of football matches from throughout the world. These football markets are extremely liquid, allowing for the successful execution of trades. Further, it is easier for us to research popular sports such as Football. Tennis – Tennis has that one component that In-‐Play traders love – and that is volatility! Odds for players can rise and fall on a whim, and if you are adept at riding these odds fluctuations, you can consistently profit time and again from a single match. Like Football, Tennis matches have a wealth of research resources. My niche in tennis tends to be the Grand Slam events, such as Wimbledon, The US Open, The Australian Open, and the French Open, as well as the lesser, but famous tournaments such as Monaco. A further “subsection” for me, is to focus on the best players in the World, and focus on matches where the seeded are playing the unseeded in a particular tournament. In my other reports in this small series, I go in-‐depth into betting research, specifically with Football. I will also include a précis on how to research tennis matches. Research is an oft neglected and key element to successful trading. You must have a plan before you want to trade a match. The following hypothetical plans give you an idea. PLAN 1 I notice that Roger Federer is playing Julien Benneteau in the Olympics. The last time these 2 players met was at Wimbledon, when Julien Benneteau took the first 2 sets off Roger Federer. As the Olympics are being held in London, and at Wimbledon, I would expect Benneteau to again be an extremely tough opponent for Roger.
I acknowledge that this is the best of 3 sets, where their last encounter was the best of 5 sets. Still, Roger Federer’s odds of 1.09 are far too short to back. I would consider laying this 1.09 in the Match odds Market, and perhaps laying 1.42 for 2-‐0 set Betting in Federer’s favour.
A look at the head to heads on Betfair and Roger Federer dropped a set against Alejandro Falla. I suspect Benneteau is a better player. My Plan with this match therefore revolves around a hope that Julien Benneteau will be as difficult to beat as he was when these 2 met at Wimbledon. I will look to:
Lay Roger Federer in the Match Odds market at odds of 1.09 because I think these odds will rise. I will lay Julien Benneteau if he wins the first set (or Back Roger Federer at better odds than pre match). I will consider laying the winner of the first set, regardless of which player it is, because this is the Olympics and the loser of the 1st set must win the 2nd set in order to stay in the match. PLAN B Plan B will focus on a football match. There are many examples of research leading to successful trading on www.whatreallywinsmoney.co.uk -‐ I will choose a match from there. It’s the 29th July 2012 and there’s an Olympics Match between Brazil and Belarus. I recount my actual research below and will then list the angles in.
3pm – Brazil v Belarus – 1.16 home – another Olympics men’s match, and the Brazilian ladies struggled awfully against New Zealand at 1.16 (and shorter) to win 1-0 with an 86th minute goal. A 3-2 win against Egypt saw Brazil 3-0 up and perhaps complacency drawing in towards the end of the match. This is the under 23 side, well most of it, so this naiveté needs to be stamped out. Belarus scored a single 45th minute goal to record a 1-0 win against New Zealand, and I suspect will see little of the ball. This should be Brazil’s to lose. The question is whether we can delay entry to bump up the Brazil odds. See how adept the kiwi ladies were in shutting the door to Brazilian ladies with Brazilians yesterday. As you know by now, 1.16 indicates 3 goals minimum for the team priced as such. I will look to: Delay Entry into this match (delayed entry means quite simply that I will not bet and watch the match first to hope for some shocks. As you can see my research looked at “whether we can delay entry to bump up the Brazil odds”. I will lay Belarus if they score first (or Back Brazil at higher odds if Belarus score first). Note that 1.16 usually indicates 3 goals minimum for the team priced as such. I will consider an over 3.5 goals bet/trade at better odds if the match is tight earlier on. Also, if Brazil are not winning going into the last 20 minutes, consider backing them at better odds (or laying the draw) in the hope that those 1.16 match odds are realistically reflective of Brazilian dominance).
As an aside, this is what happened.
Belarus scored first. It was 1-‐1 until the 65th minute (5 minutes away from the last 20 minutes of the game), and Brazil scored 3 goals -‐ albeit last minute. Having a Plan of Attack will help you “anticipate that future price movement” which is my definition of trading.
The Mechanics of Trading The best way to show you the mechanics of trading is through real world examples. A trade comprises the following: A plan of action An entry point. We either back a selection in the hope the odds will fall in -‐play. Or we lay a selection in the hope the odds will rise In-‐Play. An exit point. Having backed a selection at a certain price, we want to lay that same selection at a lower price in order to successfully execute a profitable trade. Having layed a selection at a certain price, we want to back that same selection at a higher price in order to successfully execute a profitable trade. We want to spread profit on both outcomes. This is a great habit to cultivate and is a key benefit to trading – the ability to engineer a profit on all outcomes even before the match has even ended.
Simple Trading Strategies Trading can be as complicated or as easy as you want to make it. In this report I want to introduce you to specific strategies for making trading work in football and tennis matches.
TENNIS If you want to start trading tennis matches, here are a few techniques that are logical and easy to master. 1) “Making a Horlicks of It” No this is not a sojourn to that delicious malt drink; I am referring to the world’s best players when they are making a complete pig’s ear out of a certain match they are expected to win comfortably. The key words here are underlined in bold type. The player is expected to win based on his odds, but quite often, the opponent does not follow the plan. This little strategy is successful more times than not. Here’s what we do. We focus on major tennis tournaments only. These I class as the Australian Open, French Open, US Open and Wimbledon. At these major tournaments we focus on In-‐Play matches involving, almost exclusively, the World’s Top Ten players. The cream tends to rise to the top in these Grand Slam events. We focus on the early rounds of these Tournaments. The Top Ten players, at Grand Slam events, are expected to comfortably win their early round matches. It is when they are struggling in these early matches which provide our cues to enter the market. And that is it. The logic? Grand Slam events are targeted by the World’s Best Tennis players. They are usually extremely shortly priced in the early rounds of these Tournaments. Oftentimes they struggle but do eventually win. As traders, we can take advantage of these struggles. I spoke previously about “niches” and “subsections” of sports, and this is one. This strategy always means that you are backing very strongly fancied favourites are value odds when compared to the price before the match commenced. Here are some examples of this easy to use tennis trading strategy in action. It’s Wimbledon’s Ladies Round 2, and hot favourite Samantha Stosur has surprisingly lost the first set against A Rus.
This was not meant to happen. Samantha Stosur was a 1.14 shot before the match began (quite simply you back her with £100, and if she wins, you win £14). Very short odds.
This is the Price/Volume Chart on Betfair. I spoke earlier about a player/team that are not playing well. Do you remember what happens to their odds? They will increase. In this case 1.14 shot Samantha Stosur’s odds have increased dramatically to 1.9 after she lost the first set. This offers extreme value. I entered the betting market when Samantha Stosur had won the first 2 games of the 2nd set.
I placed a back bet at odds of 1.27 (arrowed above from a screenshot taken using Fairbot). With Stosur 2 games up I expect her to win the 2nd set). Look at Stosur’s odds above. I have backed at 1.27. I now have the opportunity to lay at 1.12 and execute a successful trade. The software tells me I will make £9.46 if I exit my trade now. And that is £9.46 regardless of which player wins the match. (After thought – Samantha Stosur actually lost this match but I still profited because I traded).
Samantha Stosur actually won the 2nd set 6-‐0. Look at the price/volume chart
Stosur is trailing in the 3rd set
Stosur loses the first set
Stosur fights back in the 3rd set. Stosur’s odds pre match.
Stosur wins the 2nd set
The price graph above shows what a volatile market can be created in a typical tennis match. Remember this is a 1.14 shot we are talking about. It was meant to be “wham, bam, thank you Ma’am” 2 sets to love easy win for one of the Wimbledon favourites. As Traders, we have to decide when to enter the market to execute a trade. This is why I mentioned the trading plans earlier (Plan A and Plan B). It is easier to enter the market after the first set result is known. In this case you have backed a 1.14 shot in Samantha Stosur at odds of around 1.9. It is important in tennis to know the duration of the match. Normally, in Women’s tennis, it is the best of 3 sets. This can serve you well as a trader of extremely hot favourites who lose the first set. Why? Well they simply must win the 2nd set or they are out of the Tournament. We almost always see a huge turnaround in form come the 2nd set in Women’s Tennis. Having backed Samantha Stosur (effectively we’ve backed her to win the 2nd set, or at least look as if she is going to win the 2nd set) at 1.9, we can lay off our bet at odds of around 1.12 and secure a superbly profitable trade.
PLAN IN ACTION: Here’s another example from this year’s Wimbledon which featured Roger Federer (the eventual winner of Wimbledon 2012!) This match meets all of the credentials for my niche tennis trade: It is a Grand Slam event, Wimbledon. The match involves a World Number 3 Player (I am focussing on the World’s Best). This is the Men’s Singles Round 3. An early round in a Grand Slam event, featuring a World Top 3 player. Roger Federer was priced at 1.03 pre match. This means that if you place a back bet of £100 on Roger Federer to win this match, you will win £3! This is an absolutely valueless bet isn’t it? This is a best of 5 sets match and the market is expecting Julien Benneteau to turn up to have his tummy tickled before Roger Federer strolls to a 3 sets to love victory whilst reading the Evening Standard and sipping on a Pimms. Roger Federer loses the first set. His odds do what when he is playing badly?
They will rise. This 1.03 shot is now available to back at 1.17.
This could be the first entry into the market. I test the water here.
I have backed Roger at odds of 1.14 after losing the first set. As the market expects, Roger begins to assert fleetingly in the 2nd set.
I can immediately realise a profit. Having backed at 1.14, I can lay at 1.08 and profit from the reduction in odds. Why the drop in odds? Remember, when a player you have backed is playing well, their odds will decrease.
And Roger Federer has won the first 2 games of the 2nd set , the market assuming he will go on to win this 2nd set (and as you will see, the market often gets it wrong, and we can profit well from this). Now things are getting interesting. Look at the scoreboard. Remember that Roger Federer was priced, pre match, at 1.03 (you win £3 if you back him for £100).
Benneteau has won 2 consecutive sets. Like the Samantha Stosur match, the next set is critical for Federer. If he loses the 3rd set, Federer is out of Wimbledon – a tournament this year where Rafael Nadal has exited early! What happens to a player’s odds when they are playing badly/losing?
Their odds increase. 1.78 odds for a 1.03 shot, and what’s more, a World Number 3 and multiple Wimbledon champion is far too good to miss. I back Roger Federer at 1.78 for £100. The 3rd set must be won by Roger. I am effectively backing him to win this 3rd set. The 3rd set begins. Roger Federer starts well and has an early break point on Benneteau’s serve. What happens to a player’s odds when they play well?
They decrease! Having backed Roger Federer at odds of 1.78, I can trade out here at odds of 1.6 for an £11 guaranteed profit.
My contention though is that Roger Federer will win the 3rd set. Roger Federer breaks Benneteau’s serve in the 3rd set. Again, what happens to a player’s odds when they are playing well?
They decrease. Having backed Roger Federer at odds of 1.78 at the beginning of the 3rd set, I can now trade out at odds of 1.48 for a profit of £20 at this time. Roger Federer continues to play well, and consequently (yes you guessed it), his odds begin to fall in response.
It is now 0-‐30 to Federer on the Benneteau serve. It looks as if Roger will break Benneteau again.
Roger Federer continues to dominate this must win 3rd set.
He is 3-‐0 up in the 3rd set. I can now realise a nearly £50 profit from trading Roger Federer 2 sets to love down.
Having backed at 1.78, I decide to take my profit after the 3rd set.
I have “greened up” (see the ‘Terminology’ section), to realise a profit here of £44.80 if Roger Federer wins, and £44.80 if Julien Benneteau wins. Here I am, in front of the TV, cheering on both players. It’s truly the best of both worlds. The example above is the epitomy of what I am trying to get across to you, as regards tennis trading. To recap, here are the key components to this tennis strategy. A focus on Grand Slam events and well renowned tennis tournaments. Grand Slam events include the Australian Open, French Open, US Open and Wimbledon. A focus on the World’s Best. In this case there are only 2 others who are better than a certain World Number 3 Roger Federer. An early round of a Grand Slam Tournament. In this example, it’s Round 3 of Wimbledon featuring the World Number 3. The World’s Best must be extremely shortly priced and “make a complete Horlicks of it all”. The bigger the mess, the better the bet. Tennis trading can involve a lot more strategy, such as trading points, games, and sets, but the strategy I share with you here is a simple, no nonsense approach.
Football I’m working on a report entitled “Profiting from Live Football”, and therein I reveal my strategies for successfully profiting not only from betting on live football matches, but also from trading live football matches. I don’t want to duplicate myself here, so I will offer you, as a tasty morsel, a simple you can have fun with during the new season. It follows along the lines of the tennis strategy and is so simple, you can easily implement it during the new season. If you want an easy strategy to use for Football which shows you: The relationship between back and lay odds. How back and lay odds react in a football match How to profit from strong market leaders Then the following strategy is perfect for you. “Making a Horlicks of it” -‐ The Football Version You saw in the tennis example I gave that a certain Roger Federer was making a complete Horlicks of his 3rd round match against Julien Benneteau. You shouldn’t be surprised, then, to learn that certain high profile teams domestically and throughout Europe, tend to make a Horlicks of certain winnable matches. You can profit from this, as a football trader. Research is the Key. With football trading, we take our cues from the betting market odds. And then we try and justify the odds by doing our research. Research is something I have covered independently so make sure you study my research report. Quite simply, if you don’t do any research on a football match, and still want to trade it based solely on the odds, then I’m afraid you’ll meet with far more losing trades. Football research is available on www.whatreallywinsmoney.co.uk . Please study how I research and see how I try to uncover patterns and sequences. Having got the research out of the way, we now wait, as we do in the tennis, for a team to make a complete Horlicks out of an easily winnable match. And believe me, your Man Utds, Chelseas, Barcelonas, Celtics will all make a pig’s ear of some matches throughout a general 38 match season, and you can take advantage.
Follow this checklist to uncover suitable trades: Look for matches where there is an extremely short priced favourite, the ideal ( note I say ideal not a carved in stone rule) is that the short priced favourite should be playing at home. Research to Justify the Odds. Wait for the short priced favourite to get into trouble during the match, or for there to be a surprise lack of goals. Back the favourite in trouble and hope that the short odds were justified. A few examples will show you how you can use this easy strategy. This match features Standard Liege against Arsenal in the Champions League. My research suggests Arsenal should not lose this match. Hang on a second! There’s only 4 minutes gone in this match. Look at the scoreline.
Standard Liege are in front after only 4 minutes, and the scoreline is 2-‐0! This was not part of the script. A case of Arsenal and Horlicks I’m sure you’ll agree! It is at this stage that you consider Arsenal should do something about this scoreline. Remember what happens to a team’s odds when they are playing badly? They increase!
Arsenal are backable at odds of 4/1 or 5 decimal. The odds are too high considering Arsenal’s profile and the fact there are 86 minutes remaining in this match. I back Arsenal for £200 at odds of 5. I expect a serious comeback, and soon. Arsenal equalise before halftime.
What happens to a team’s odds when they are playing well?
The odds decrease. In this case, I backed Arsenal at odds of 5. They are playing well and scored a goal. This goal itself has shortened Arsenal’s odds to 3.85. Having backed at 5 and layed off at 3.85, I have made a guaranteed £57.23. If Arsenal win, I win £57. If Arsenal lose, I win £57. If Arsenal draw, I win £57. As in my checklist, I look for teams expected to win. In another example from the Champions League, Barcelona go a goal down to Dynamo Kiev.
I back Barcelona at odds of 2.4 when 1-‐0 down. They equalise and their odds drop to 1.78. I make a guaranteed £65 minimum.
And here’s a more familiar name. Chelsea, coincidentally in the same Champions League, go a goal down to APOEL.
What happens when a team is playing poorly ? Their odds increase. APOEL are 0-‐1 up away from home to Chelsea
I back Chelsea at 1.66 0-‐1 down after only 6 minutes, and lay Chelsea at 1.31 once they have equalised thanks to Drogba. Another guaranteed £51. This simple trading technique will serve you well if you follow it in the major European Leagues, and major tournaments such as the Champions League. Read “Profiting from Live Football” for a really in depth look at football trading. What about horse racing? As this is “Betfair Trading Made Easy” I don’t feel there is space for horse racing. Why?
Well horse racing tends to involve “swing trading” and “momentum trading”. i.e. we try to trade price movements. We cannot really trade using a simple reactive strategy that we can with tennis. There is no “recovery” from a set down or 2 goals down in horse racing. There are strategies which can be employed in trading the pre race market and in-‐ play markets in horse racing, but again these are complicated strategies.
Trading Terminology You have read about “greening up”, “laying off”, “trading out” but what am I talking about? Betfair has provided an excellent glossary. I will single out back to lay, lay to back, and greening up specifically. Do please read Betfair’s Glossary at http://betting.betfair.com/education/the-‐ultimate-‐in-‐play-‐ glossary-‐030211.html BACK TO LAY TRADING and GREENING UP I have repeated 2 questions throughout this report. “What happens when a team plays well?” The answer is that their odds reduce. “What happens when a team plays poorly?” The answer is that their odds increase. What happens to the odds is intrinsic in manufacturing a successful trade. Let’s focus here on the Back to Lay Trade. When we back a team, or player, we want that team/player to do well. We want them to score goals, we want that tennis player to win points, games and eventually sets. This is the essence of the back to lay trade. Whenever you back an outcome, with trading in mind, it is in the expectation that their odds will eventually reduce. Here is a hypothetical back to lay trade. Let’s back Lepchenko here using www.betfair.com (remember though that software is preferred).
Backing Lepchenko at 1.49 for £100 will result in a profit of £46.60 if she wins, and £100 loss if she loses. Let’s assume that Lepchenko is playing well. Her odds will reduce. Why? Odds will shorten if the market thinks a player is more likely to win. The shortest price is 1.01. Lepchenko’s odds, in this example, have shortened to 1.25 because she has been winning games and looks the likeliest winner. She was backed at 1.49. She can now be layed at 1.25. This is what is called a back to lay trade. We back first (in order) to lay (later). By laying at the lower price for the same stake at which you backed at the higher price ( 1.49) you can: Make sure your £100 stake is returned to your betting bank Guarantee a risk free bet on the player who you back to lay traded.
Here we have hypothetically backed Lepchenko at 1.49 and now layed her at 1.25 using the same £100 stake. We are guaranteed £22.82 if she wins, but nothing if Royg wins. You saw in previous examples in this report how the profit was spread throughout both outcomes ( or in football the home win, away win, and draw). I would urge you to be disciplined enough to do this with all of your trades because, as with Samantha Stosur, sometimes these favourites will lose. HOW TO GREEN UP USING BETFAIR: I’m afraid it’s a bit hit and miss if you do not use software to “green up”. Quite simply, instead of laying off using the same stake that you backed the player ( £100), you know add on the stake you would like on the 2nd player. Instead of laying Lepchenko for a stake of £100, by increasing the stake to £120, I am guaranteeing a profit whoever wins. How did I know how much to lay? I experimented until the winnings for both players were about the same.
By laying Lepchenko for a stake of £115, she will win £19.26 and Royg will win £14.26. I want greater parity.
By laying Lepchenko for £120 at 1.25 odds, I guarantee £18 for her, and £19 if Royg wins. Specialist software will make this job easier for you.
In this trade recently at Wimbledon, my trading software has told me that, at the current odds, I can guarantee £27.78 (arrowed above). When the numbers are green, the software indicates a profit, when these figures are red, it indicates the potential loss. By simply clicking on the box above, the software will spread my profit (green up) onto both players. This software I use is available at Binteko and is called Fairbot. There is also free software available which will help you green up, in particular Betangel Basic at www.betangel.com. Fairbot though is geared for the Betfair Trader. LAY TO BACK TRADING: Here we lay an outcome first, hoping that the player or team will underperform. A football team, for instance, will surrender the lead, concede a goal, get a player sent off -‐ anything which will increase their odds. A tennis player will lose the next set. We have 2 options with lay to back trading. Fixed Liability Laying and Fixed Stake Laying.
FIXED STAKE LAYING: When we fixed stake lay to back trade, we firstly place a lay bet for a specified stake. That stake is the amount we would like to win. In this case, I have layed Lepchenko to win £100.
Underneath Lepchenko’s name, you’ll see a minus figure in red –this shows the liability. Remember that we are laying Lepchenko, therefore we want her to lose. If she wins, we will have to pay out a £50 liability, which is the liability generated by laying a 1.5 shot to win £100. By looking to win a specific amount when laying, we have no control over the liability. It must be said though, that if you lay odds on shots on Betfair (i.e. any outcome priced lower than 2.00 in the odds, )your liability will always be smaller than your potential winnings. When we have layed an outcome, we want that outcome to perform badly, not necessarily for the whole match, but for long enough to ensure the odds rise. Odds will rise when teams perform poorly. Let’s assume that Lepchenko has started to lose points, and games here. Her odds have drifted to 1.8.
Your first job as traders is always to negate any stakes you have. In this case we have a £50 liability for Lepchenko. By backing Lepchenko at odds of 1.8 for the same stake at which I layed her (£100), I have negated the liability of £50, and produced a guaranteed profit of £28.53 if she wins, and a break even if Royg wins. Greening Up. Lay to Back trading greening up is slightly different to backing if you are doing it manually via Betfair’s website.
In the above screenshot, I want to spread profit onto both players. With back to lay trading we add an amount to our £100. When lay to back trading, we subtract the amount we want to spread to the
other player. Above, I have layed Lepchenko at 1.8 for £83 to guarantee £15.60 if she wins , and £16.17 if Royg wins. FIXED LIABILITY LAYING: Laying is unique in that it has the “liability” issue as shown above. We can actually control our liability at www.betfair.com by using the option arrowed below:
Here, I will lose a specified £100 if Lepchenko wins this match. Remember I have layed her, and so want her to lose. By specifying the liability (the amount we could possibly lose), we can control our laying. The upside in this case is that we have increased the possible returns if Royg wins to £190. GREENING UP: The same principle applies as it did to fixed stake laying. We use the backer’s stake amount (in this case £200) to back Lepchenko at higher odds (1.8) to ensure our liability is negated.
This has produced a £57 guaranteed profit if Lepchenko wins, and a break even if she doesn’t win. Of course the ideal is to spread the profit onto both outcomes (green up) and we do this by subtracting the amount we want the other player to win from our stake (£200).
By backing Lepchenko at 1.8 ( higher odds) for £168, I guarantee £30 if Royg wins, and £32 if Lepchenko wins.
The Real Key To Trading Success As has been hinted at throughout this report, the real key to trading success is in the quick execution of trades. This is only possible through the use of software. Sometimes time is of the essence when trading, and fiddling about on Betfair’s website, trying to calculate the correct amount to lay the team/player to produce a profit can waste valuable seconds, especially in betting markets which move quickly. Remember how volatile the tennis markets were? Software therefore is a must. Here’s a précis of what’s on the market. www.binteko.com Fairbot from Binteko is the software I use. It is specific to trading, and calculates potential profits/losses as a match progresses. You know instantly when you are in profit and one click enables greening up. For the more advanced trader, there’s trailing stop losses, swap trading and much more. It offers extremely good value for money at time of writing. www.betangel.com A little more pricey and too many bells and whistles for me personally. Value for money must be Fairbot. www.betangel.com do provide Betangel Basic which is a free piece of software which should be your first port of call. www.geekstoy.com This software used to be free, but is now paid for. Again it is professional trading software and has all you need to green up automatically. Check with the website for fees. http://racingtraders.co.uk/download/ Racing Traders offer their software for free with limited functionality. Again this option is perfect for “dip your toe in” traders who do not want to commit upfront costs whilst investigating trading.
Bottom Line I hope this free report introduces you to the concept of sports trading as it applies to the betting exchanges, and in particular Betfair. Trading is simply “the anticipation of a future price movement” and in essence: If a team/player performs well, their odds will reduce. We profit by being back to lay traders. If a team/player performs badly, their odds will increase. We become lay to back traders. The easy to use strategies I have shown you for football and tennis serve as an ideal launching pad for you to investigate trading. These strategies have at their heart the taking advantage of inevitable fluctuations in odds in in-‐play football/tennis matches. These strategies are also reactive strategies. They react to the top tennis players and top footballers in matches in which they are underperforming -‐ I referred to it as “making a Horlicks of it”. There are many hundreds of opportunities to make this simple strategy work and to practice by paper trading. Enjoy!
Clive Keeling What Really Wins Money www.whatreallymoney.co.uk
