spreads as stocks

[JayTrotter]

I was wondering if any one had ever evaluated prices of sports teams in the way that you would evaluate the price of a stock..

my thoughts being that understanding how the marketplace operates is a lot more profitable, than knowing who is playing first base...

[illfuuptn]

I agree. I think that the people who say "there's value in this line" as opposed to saying "C.C. has been hot" are the ones who make the big bucks. I would love to understand how the sportsbetting market works. Unfortunately I have no idea if a line moved because of public betting or sharp betting etc. Can someone who bets in terms of E.V. and market trends enlighten us. Please.

[Wrecktangle]

I agree. I think that the people who say "there's value in this line" as opposed to saying "C.C. has been hot" are the ones who make the big bucks. I would love to understand how the sportsbetting market works. Unfortunately I have no idea if a line moved because of public betting or sharp betting etc. Can someone who bets in terms of E.V. and market trends enlighten us. Please.

Yeah, why don't one of you sharps out there tell us who/what moved that line?

My guess is: move size (force) = amount bet (mass) x perceived sharpness (velocity)

add up the forces on each side of a line and you get the line movement.

[Dark Horse]

I was wondering if any one had ever evaluated prices of sports teams in the way that you would evaluate the price of a stock..

my thoughts being that understanding how the marketplace operates is a lot more profitable, than knowing who is playing first base...

It's a hypothesis.

So what are you going to do about it?

I realize that western education has trained people to raise their hand whenever they have a valid question, and that this comes with an inbred expectation that the answer will then be presented on a silver platter. (the educational equivalent of a welfare system that undermines individual initiative).

But...

In sports betting you have to do your own research. Are you willing to 'pay the price'?

[u21c3f6]

I was wondering if any one had ever evaluated prices of sports teams in the way that you would evaluate the price of a stock..

my thoughts being that understanding how the marketplace operates is a lot more profitable, than knowing who is playing first base...

Where to begin?

Yes, my wagers are almost entirely based on pricing (EV), however my wagers are almost always hedged and I very rarely make let-it ride wagers. I have previously described live sports wagering as having almost the same characteristics of options trading and I use basically the same methodology to find “wagers” in both markets (again, almost always hedges).

Now to piss some people off (though that is not really my intent). I think Dark Horse made some valid points. I see very little “think” in this tank but I do see a lot of “Group Think” which may actually help to squash any “new” thinking. Unfortunately, I find that some of the “Group Think” items are not entirely accurate and/or misleading at best. In fact, one of the threads that had a relatively lively discussion about EV and IMO has more right to be in the Think Tank than many other threads was moved to Players Talk. It is my opinion that many go awry because they really don’t understand the concept of EV. Of course those that disagree with me certainly think that it is I that doesn’t understand.

Now, if what you are doing is profitable, then by all means continue to do it until you prove to yourself otherwise. But if what you are doing is not profitable, then doing the same thing and expecting different results is not very smart IMO regardless of who tells you that what you are doing is the “right” thing to do.

When I look for wagers, I not only don’t know who is on first base, but I don’t usually know the team members, where they are in the standings or any other performance data as it is not relevant to my wager selection. This is not to say that all that performance data is not relevant, it is just not relevant to my wager selection. All that data is relevant because in some way, shape or form, it is reflected in the odds offered.

I don’t intend to present anything on a silver platter but I will give some ideas on where to hunt in a later post.

Joe.

[Bsims]

I was wondering if any one had ever evaluated prices of sports teams in the way that you would evaluate the price of a stock..

my thoughts being that understanding how the marketplace operates is a lot more profitable, than knowing who is playing first base...

Interestingly, my current effort is the reverse of this. I'm applying some of the techniques I've used in analyzing sports to the market. Market movements and line movements are quite similar.

I suspect that the analysis will not lead to anything worthwhile. More support for the daily movements of the market are more a "random walk" than something meaningful. Line movements in sports are different in that they are somewhat meaningful. (Not to imply that they are necessarily useful though.)

[u21c3f6]

I agree. I think that the people who say "there's value in this line" as opposed to saying "C.C. has been hot" are the ones who make the big bucks. I would love to understand how the sportsbetting market works. Unfortunately I have no idea if a line moved because of public betting or sharp betting etc. Can someone who bets in terms of E.V. and market trends enlighten us. Please.

When I try to figure out a way to profit on something I first try to figure out if I would lose if I used a random approach. If I would lose using a random approach, I then try to figure out what are the forces that would cause the loss. As far as the options market and sportsbetting are concerned, the forces are the same, spreads and commissions. If you randomly bought and sold options or selected sports wagers at random you would have a -EV equal to the amount of commissions you pay and the amount of spread you give up.

In the options market, I minimize this drag on EV by using an online broker with extremely low rates to trade and by trading options that have .01 spreads (as opposed to .05 and .10 spreads) which usually means very liquid and very active options which allows you to get the best pricing. In the sportsbetting arena it means getting the lowest juice possible when combining the spread you give up and commissions if any.

Gotta run. I will continue later.

Joe.

[Tomato]

Unfortunately I have no idea if a line moved because of public betting or sharp betting etc.

The "public" never moves a line.

[LT Profits]

The "public" rarely moves a line.

Fixed.

It can for major events like Super Bowl.

[u21c3f6]

To continue, a person making a random sportswager or a random stock option trade will be destined to lose the amount of the spread and commissions. Now how do we attempt to find a way to become profitable? First some definitions. To be profitable, your criteria must make selections that will allow you to collect more on your winning wagers than you lose on your losing wagers (on a flat bet basis, even though I don't flat bet, I mostly use a modified half-Kelly). If your criteria can accomplish this feat, then when you find a wager that meets your criteria, you are making a +EV wager. I don't necessarily want to get into the EV discussion again but +EV to me just simply means that I expect to profit from wagers that meet a certain (verified) criteria. I may not win that one particular wager, but over a series of wagers I have a + Expected Value.

Now how do we go about this? One way is to keep databases full of different performance (and other) data and try to find something "predictive". If you can do this, congratulations. I would assume that the data you use is something out of the ordinary and/or an eclectic mix of data to get superior results as most of the logical "regular" data is usually pretty much accounted for in the odds offered. I don't do this. First, I am too lazy and second, I am experienced enough in many other "markets" to know that profitability can be approached differently.

Another way is to try to find arbs. If you find them, then you have a guaranteed profit. I don't do this either but I suspect that for sports wagers that arbs (not what I refer to as hedges which I will get into later) are few and far between and apparently limits can interfere with your plans (as well as the possibilty of getting tossed). As far as the stock market is concerned, the retail trader can just forget about trying to do arbs because computers are too fast and any gaps are usually closed instantaneously.

Line movements. If you make money from line movements, again, congratulations. And again, I don't do this. I do have a bone to pick with this one however. Here's where I have a problem with posts in this area. Someone will write that the closing no-vig line at Pinny is 100 and they got 105, what is their edge? Well the easy answer is 2.5% but is that correct? The real answer IMO is that you don't have enough information. The closing lines are amazingly accurate at near 50-50 in the long run. If you told me that your sportsbook was going to allow you to throw a dart a today's side selections and that they would give you 5% more than the closing line on that wager if it wins, then I would agree that you had a 2.5% edge. The closing line accuracy is over a very large sample of games. For sides to maintain that 50-50 accuracy based on the closing line, the sides must be selected at random. Once you use criteria to make the side selections, that now becomes a subset of that very large sample and may or may not maintain that 50-50 accuracy. The only way someone knows if they have an edge is to calculate how their subset performs. I'll stop here as this is really a much larger discussion but I hope that I have made my point clear (even if you disagree with it).

I am sure there are many other ways that people can profit but the way I do it is by what I call hedging. Hedging is not an entirely accurate word to use for what I do but it is close and I don't know what else to call it. I will describe where I hunt for my "hedges" in a later post.

Joe.

[ScreaminPain]

To be profitable, your criteria must make selections that will allow you to collect more on your winning wagers than you lose on your losing wagers (on a flat bet basis, even though I don't flat bet, I mostly use a modified half-Kelly). If your criteria can accomplish this feat, then when you find a wager that meets your criteria, you are making a +EV wager.

Anyone interested in long term success in Sports betting needs to understand this concept. It's imperative to avail yourself of the different types of money management methods that will afford an +EV bettor maximum profits.

....One way is to keep databases full of different performance (and other) data and try to find something "predictive". If you can do this, congratulations. I would assume that the data you use is something out of the ordinary and/or an eclectic mix of data to get superior results as most of the logical "regular" data is usually pretty much accounted for in the odds offered.

My perferred method! After a few unsuccessful years of dabbling in "commonly available data" I realized I was dillusional, thinking I could profit. I spent another 2 years building a working model. Dealing with numbers and data, separated me from the emotional aspect of team chemistry and individual player data.

Joe, you mentioned in a later post, that you were sometimes unaware of "who was on first". I had to laugh, because on many occassions, my friends asked me "who I liked tonight." Immersed in my "data box", I had forgotten who my bets were on. They usually accuse me of hiding the information but quite honestly, when working with my data, I'm working with rotation numbers and NOT with team names and never with players.

This is an interesting thread. Joe, I'm looking for further posts

Good Luck on your action...

[Wrecktangle]

How do you find value in a line?

1) exploit stale lines
2) hedge
3) build a model/simulation that discovers the value of the teams

IMO of these, 3 works best for BR growth, but is not the safest in terms of risk.

[losturmarbles]

Yeah, why don't one of you sharps out there tell us who/what moved that line?

My guess is: move size (force) = amount bet (mass) x perceived sharpness (velocity)

add up the forces on each side of a line and you get the line movement.

perceived sharpness should be acceleration

then it's F=ma

[ScreaminPain]

How do you find value in a line?

1) exploit stale lines
2) hedge
3) build a model/simulation that discovers the value of the teams

IMO of these, 3 works best for BR growth, but is not the safest in terms of risk.

This is an incredibly difficult question to define, and I don't want to step on the OP's toes, but one example is this.
1. build a reliable model using either runs scored vs. runs allowed or BsR (Base Runs...sabermetrics version)
2. evalutate each team with the data and determine a winning % as see here: W%(A v. B) = W%(A)*(1 - W%(B))/(W%(A)*(1 - W%(B)) + (1 - W%(A))*W%(B))
3. using Log5 formula, one can determine the probabilty of the winning team.
4. apply this formula to the probabilty...IF(a<.5,((1/A*100)-100,((1/1-B))*-100)+100)
5. the result is the proper line based upon the input...
6. check the line against the posted line and determine if it results in +EV

I use a factor of 20 cents difference, some use only 12. Of course you need to factor in HFA which is uallly around ..035. Some sabermetricians use .042, but that is a debateable topic.

I know this is vague, but I don't have all the links at hand to make proper reference to the formulas.

Good Luck with your action...

[u21c3f6]

To continue. First, since I have don't have any data or criteria that can tell me which sides might have value, my wagers would be as good as a coin flip and I should lose over time the amount of the spread and commissions. As I stated above, IMO one should always try to get the best price to make the amount of vig you are trying to overcome as small as possible. Now this may seem obvious, but I know many players that get so sure about a wager that they don't care what the price is because they figure they are going to get paid. I am sure most of you have seen many of those "lock" threads. I think they speak for themselves. In fact, I am so conservative, that if I was making a wager on the sun coming up tomorrow, I would still shop for the best price!

Because I know I don't have the information to make profitable let-it-ride before the event wagers, I must do something different. I use the term "hedge" for what I do (it is also similar to "pairs trading" if anyone is familiar with that term). Essentially, I make wagers on one side of a contest with the intent to cover the other side at a later time or in a different correlated market.

Example: Make a wager on one side before a game starts and then wager on the other side during live wagering. I also combine this with multiple markets such as ML, spread or RL, various spreads, totals etc. My "data" consists of "knowing" how the live market fluctuates and how the correlated wagers are comparatively priced. Anyone interested in this just needs to watch the wagering during many live events. Try not to think what should happen, "see" what actually happens. You should almost certainly begin to see a pattern of how one could play a single side, then you can focus on "seeing" how the different markets are correlated and then you should begin to "see" how multiple wagers can be combined that can and will give you windfall profits. The windfall profits come from hitting "middles" that can be set-up with little or no risk. They don't hit very often but when they do, by starting with 10% of bankroll wagers (which is never all at risk) they will increase your bankroll an extra 5-20% per hit.

I will continue to the next example which is actually easier to apply. It involves wagering on "tournaments". Essentially any contest that has different "rounds" to get to the finals. I actually started a thread about this titled: Birth of a Hedge. Since there appeared to be no interest (or maybe people are just afraid to participate?) I let it go. At this point, so I dont have to redo what I already posted in that thread, I will continue this discussion in the thred titled: Birth of a Hedge.

Joe.

[statnerds]

I was wondering if any one had ever evaluated prices of sports teams in the way that you would evaluate the price of a stock..

my thoughts being that understanding how the marketplace operates is a lot more profitable, than knowing who is playing first base...

they are stocks. excellent starting block for anyone that wants to bet. teams are stocks and Books, both Local and Not, exist merely to provide a marketplace for investors. they also act as the Brokers taking their commission on every trade made, whether your investment was for a profit or a loss.

i only say that cause it seems some folks waste time on hating their book or thinking their book is out to get them. oh some may truly seek your demise, and if so, you should leave and find a solid, high rated book.

and your original question is actually 2, no?

the first part is called handicapping.

the second part is understanding market forces? since you said sports team, i assume you mean any sport. each one of these markets will differ in size and efficiency. the NFL market will bear little resemblance to the WNBA market. sounds like a lot of work to dig and follow line movements and try to apply a reason for each move, respected Capper releasing a play, 'sharp' money (which doesn't necessarily equate to winning money), or whatever other force you can imagine in you mind.

don't over think Danny. it will end up in the lumber yard.