Experiment was winner thanks to losing favourites
Laying by liability limits losses
Cashing out when Djokovic trailed won £3K
Is it wise to bet randomly on every match at the US Open tennis tournament? Well, that's what I did in the early rounds.
The experiment, spanning multiple matches at the US Open, should give you some fascinating insight into clever things you can do when betting or trading on tennis.
I've often done this to go beyond conventional wisdom and historical data to unlock clues and value in a betting market. Let me give you some insight into the results.
Laying by liability to limit losses
For this strategy, we will be laying (betting against something happening) and using a unique feature of the Betfair Exchange - laying by liability.
Laying by liability means limiting our loss when betting against something but not our potential profit, as we will learn later.
To lay by liability, click on something you want to lay, but rather than entering a stake, click on the 'liability' option on the bet slip. You can enter the maximum amount you are prepared to lose if your lay bet loses.
For example, laying something at odds of 1.152/13 to a £10 liability will mean you only risk £10 but could win £66.66 if that bet is successful. You can experiment with this on your bet slip without placing a bet if you wish.
Betting v trading
From a traditional betting angle, you would expect the market to be efficient. Placing a bet on every match randomly aims to find market biases.
It will help you gain insights into market inefficiencies, helping identify value in the betting market. For instance, by laying the favourite in each match at the US Open, we made a profit despite not making any specific selections.
By contrast, from a trading viewpoint, the strategy looks for an opportunity where a position will be profitable during the match.
Betting on every match
While the strategy might seem time-consuming, automation tools like Bet Angel streamline the process.
Bet Angel allows the user to lay by liability with a single click and automatically carry out the bet placement process. This feature improves efficiency, allowing one to focus on data analysis rather than the manual execution of bets.
According to this experimental strategy at the US Open, laying the favourite proved lucrative. In the first three days alone, the method yielded £280.80 before commission, laying to a £10 liability.
The reason this worked is that favourites won less frequently than the market predicted, or in other words, outsiders turned out to be stronger competitors than expected.
The main reason that this yielded a positive return was that eight players lost from odds of 1.251/4 or lower in the first three days. You only need a few of those to offset any losses elsewhere.
This strategy comes into its own, however, when trading on the Betfair Exchange.
Case Study: The Djokovic Match
Many matches with heavy odds on favourites will, of course, end up with said favourite winning. But we are more interested in how the odds move during the match and how that affects our chance to cash out for a profit.
The third-round match between Laslo Djere and Novak Djokovic was a great example.
Laying Novak Djokovic at the start of a match with a £100 liability meant that with our lay bet matched at odds of 1.031/33, we had a £100 liability. But if Djokovic lost, we would win £3,333.
In tennis matches, odds fluctuate enough to offer plenty of opportunities to cash out for a profit. Sometimes in spectacular style.
With Djokovic two sets to love down in this match, it was possible to cash out with almost £3,000 in potential profit.
We would win this even though we were betting against Djokovic and he went on to win. You don't need many of these to cover other matches that don't work out as favourable, and that's the essence of trading on tennis rather than outright betting.
Laying favourites produced profit
Laying to a fixed liability means you risk a set amount, but your payoff is variable based on the outsider's odds. While you expect to roughly break even when betting, the US Open this year has favoured outsiders, and laying the favourite in each match has produced a profit.
This staking method presents the best opportunity when the match is underway, as we get many chances to profit.
The vast majority of Tennis matches will move into a position where you can cash out for a profit at some point. So your focus shifts to those key turning points in the match.
A good example is the Djokovic match, as discussed, where cashing out when he was two sets down produced a very good profit. But you could have cashed out at many points for a smaller gain.
At its core it's that variable potential profit, generated by laying to a fixed liability, that is the key to this strategy.
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