An easy guide to closing out trades

Andrew Colin breaks down the mathematics of hedging your pre-game position, in-play.

Closing out a trade to lock in your profit is one of those basic techniques that everyone should understand, but is surprisingly hard to find explained. So here is a simple account. Closing out a back trade Suppose that you’ve backed a soccer team to win at odds of 10. They do well during the match and the odds drop to 5. The value of your bet has increased in value, but you’re worried that the match could go against you. How do you close, or hedge, the bet before the game ends to lock in your profit? You can do this by ...

Arbitrage of Synthetic Asian Handicap Bets

Andrew Colin discusses how Asian Handicap markets are open to arbitrage opportunities, resulting in guaranteed profits.

Summary This article shows how to implement synthetic Asian handicap bets, and how to construct a Dutch book so that any arbitrage opportunities arising between these synthetic bets and actual bets can be locked in to generate profits, irrespective of the outcome of the match. Expected return is of the order of 0.2% per match, so some degree of automation is vitally important to cover large numbers of matches, as is availability of sufficient liquidity to match bets. Asian handicap bets: the basics An Asian handicap bet is one in which a handicap is assigned to one of the competing teams. The handicap is ...

The Road to Rio

Brazil is the world’s fifth largest country by area. How will the distance factor affect team performance and how can this data be analysed for modelling purposes? Rob Esteva discusses.

Logistical factors are notoriously difficult to quantify when it comes to modelling in football. Distance alone is tough to find conclusions from as the various methods of transport alone can make away matches harder than others. The likelihood is that in most cases other than the extreme ones, a calculated home advantage takes most scenarios into consideration. That is not quite the case for final tournament however. There is one home team, a handful of neighbours, and then a posse of teams from further afield. I wrote a blog almost two years ago about the travel and distance factor in Euro ...

A Trading Evolution; From Football Into Horse Racing

The arms race between global football trading syndicates creates genius teams and technology which can be applied to many other sports, but horse racing can be one of the most lucrative, and most challenging.

I have worked as a recruiter, agent, broker and publisher within sports trading for approximately six years. During this time, I have worked with large and small syndicates across Europe, Asia and North America and met a diverse variety of individuals and groups. Approximately 70% of my work has been within football trading, 10% a mix of other sports such as golf and tennis, but the most interesting part, around 20% of my work, is within global horse racing. In football, the trading volumes in Europe and Asia are now so enormous and so established; it is difficult for any market ...

Erlang and Exchange Betting; Can The Market Learn From Whatsapp?

How can the disruptive entrance of Whatsapp and their $19bn sale to Facebook, be used as a lesson for the exchange wagering industry and does Erlang hold the key? Justin Worrall explains.

One of the biggest tech stories so far this year was definitely Facebook paying $19bn for the messaging app Whatsapp. Quite why Facebook would pay such an eye- watering sum for a chat app is an interesting question of itself - a bit outside the scope of this article and network - but well worth your reading Benedict Evans. The most interesting point from my perspective is that Whatsapp now send more messages than the entire global SMS system combined - and all with just 32 engineers. WhatsApp message volume growth is still accelerating. May have overtaken global SMS. pic.twitter.com/KsR85Mplrt — Benedict Evans (@BenedictEvans) February 19, 2014 Chat is hard, let's go shopping Now ...

Conditional Logistic Regression for Traders

Dr. Silverman introduces logistic regression modelling using the example of horse racing and discusses the benefits and applications of conditional logistic regression.

Logistic Regression (Or the “Logit Model”) is a fundamental tool for modelling and predicting the outcome of 0/1 events. (Win or lose).  In this article, I’m going to take things a bit further and explain how the conditional logistic regression model is very applicable to a lot of contests where there can be more than two outcomes.  (i.e. a horse race.) First, I’ll quickly review linear regression, move to a logistic regression, and then finally cover conditional logistic regression.  We’ll use a fictitious horse race for all our examples here. Overview All models start with some assumptions and beliefs about how the world ...