Ever considered the possibilities of trading reality TV? Check out Caan Berry's article for more information...
"Small comments or actions by contestants can turn the market on it’s head in a matter of seconds"
Christmas is within reach now and that means one thing. Reality TV will dominate the television schedules. It seems to be our favourite time of year to watch it in the UK at least, with big shows such as Strictly Come Dancing and I'm A Celebrity starting around the same time. Of course, X Factor has been on air for a while already this year and is due to come to conclusion at the beginning of December. This is a little earlier than previous years.
Love it or hate it, reality TV is huge
With millions of viewers glued to their screens, tonnes of money floating about and an element of risk, there's always going to be a market for it. For those who aren't fans of reality TV, the main drawback is that it's usually better to watch the show if you're trading it.
As we'll discuss, small comments or actions by contestants can turn the market on it's head in a matter of seconds. On that note, I'll start off with a bit of a safety warning.
There's huge room for profit in these kind of markets but if we're honest, they can be deadly at times.
It's always worth ensuring you are protecting your bank in any kind of market, be it horse racing or football. The difference with reality TV is that you have to be in this mindset 24/7. This market does not go to sleep.
Contestants can be removed without notice, outside of any set elimination times. As we've just seen on I'm A Celebrity, Jack Maynard was removed for something that happened outside of the camp (offensive tweets). You simply cannot assume that the end of the hour-long TV slot every evening means the market will be static at any other time in the day.
With this in mind, you need to always take your exposure into consideration. Lumping a large stake on an outsider and assuming it will be okay is likely to end in tears.
You're going to need to take some level of risk to make a profit. I'll mention a couple of strategies below but however you play it, always use stakes that you can afford to lose. Reality TV is unlike any other market and can be incredibly volatile.
Forever The Optimist - Backing To Lay
In the beginning, most reality shows have a large number of contestants - Strictly Come Dancing 2017 started with 15 contestants. The producers love to make entertaining TV and that usually means putting skilled celeb dancers (Alexandra Burke) in with those who are less competent. In contrast, this is nothing like a handicap horse racing market.
You'll have a clear favourite with big outsiders more often than not.
As is often the case, high-odds outsiders will eventually shorten if they haven't already been eliminated. This is especially so for shows like I'm A Celebrity.
The ideal candidate to back are lesser known celebrities, typically those who are less outspoken than others and generally stay out of arguments. Taking a look at previous winners, it's clear that the louder contestants tend to win more, but the quieter lot have a good chance of sticking around long enough for their odds to drop.
There may be more than one of these ideal candidates and if so, that's even better. Spreading your risk is essential in these markets. Going all in on one contestant will blow you out of the water. Remember, anyone can be removed at any time.
The idea is not to back and hope they win, but to catch a few downswings in price as other contestants are removed. We can then look to trade out before the group gets too small and the outsiders we are backing are up against clear favourites.
Each to their own, but I'd suggest not setting profit or odds targets. The market will do what it wants regardless. Trade out when the opportunity for further profit is no longer there, or is too risky to worth bothering with.
One of the best ways to take advantage of these markets is to lay favourites in the early stages. It may seem simple, but it can produce some fantastic trades. Let me explain...
The easiest way to explain why laying favourites works, is to explain why backing them in the early stages is such a bad idea. I'll use I'm A Celebrity as an example.
Assuming all the contestants have now arrived at camp, the market will have already taken shape. It's often the case that more well known, upbeat and friendly celebrities begin to take the spot of the favourite.
Backing the favourite at this point is suicidal for a number of reasons:
- Being favourites, their odds are lower and thus the potential profit is lower, should they win.
- Other contestants may quickly win over the public and knock your celeb out of favouritism.
- It's day one of a three week contest. There are three whole weeks of airtime for the favourite to make an offensive comment (accidentally or intentionally), become miserable, less outgoing or worse... be removed for medical or personal reasons.
This is exactly why laying an early favourite can often be a great way of securing low risk profit.
As always, have a good idea of when you will trade out before you enter the market. Good opportunities to trade out often come at times when your chosen celeb is getting less air time.
As the producers choose which relationships and celebrities to focus on, it's a good idea to get out in the quiet after the storm. Otherwise, you run the risk of positive attention being brought back to the celebrity that you are laying.