Line Movements Part I – by Ganchrow
With any form of investing, control of one’s emotions and the conscious avoidance of action motivated by fear, panic, and irrational instinct is of paramount importance to long-term success.
In the world of sports gambling, some of the greatest instigators of irrational behavior are line movements. In this series of articles we will discuss the elements of line movements, the factors behind their causes, and the proper ways to interpret and react to them.
There are three general types of line movements in today’s sports betting markets that bear attention; early unidirectional movement -- either during a short period of time or sustained and continuing throughout a good stretch of trading, known as “market trending”; quick pronounced price jumps during the heart of trading, known as “white noise”; and strong movements close to game time, often referred to as “late money”.
In this article we’ll discuss early movements and their impact on the handicapping process. Early line movements are indicative of an opening line that is significantly different from perceived fair market value. A fundamental property of trading markets in general is that the market as a whole tends to be “smarter” than any single prognosticator, and the sports gambling markets are of course no different. If you find yourself in the position of having been surprised by a line movement of this kind, (often resulting in an early bet on the “wrong” side of the market), you should certainly go digging for an explanation as to why the line moved the way it did.
You shouldn’t have to dig too far. A hidden or obscure edge favoring one particular side does not typically cause a major line shift, (and when it does, such shifts tend to come late, representative of so-called “late smart money”). The reasons for early line movements are usually anomalous and related to game-specific conditions. This serves to create “fair” lines that are often out of sync with the set of otherwise “reasonable” lines a professional odds maker would have considered hanging.
This tends to happen quite frequently. In general, the most common early line movements are game specific and of relatively modest magnitude. We can look at two “corrective” line movements in late July that were typical of the shifts that occur on a daily basis on the baseball slate. The first is was the money line for the Minnesota/Cleveland game of July 23, featuring Francisco Liriano pitching for Minnesota.
On July 23, Minnesota opened as a big road favorite of about -160 at Cleveland, with Jake Westbrook pitching for Cleveland. The market “corrected” in favor of Cleveland, making them a significantly smaller underdog.
Looking into that game, the salient factor was that Liriano had just had his worst start of the season the previous week against the very same Cleveland lineup. It is certain that that was the primary reason for the correction, and one can assume that if Liriano had been dominant the week before, there would have been no early correction.
Once the reason for a particular early trend has been determined, it’s necessary to decide whether to follow, ignore, or bet against it. Looking at start where Liriano had gotten hit more closely, we see he had certainly been dealing with extenuating circumstances. He had been traveling extensively due to All-Star Game scheduling shenanigans, and later admitted to having been worn down for the game (mentioned in nearly all game recaps). In light of that, the market correction could be viewed as dubious, and probably not one to be followed, especially considering secondary factors such as Liriano’s usual consistency and the strong bullpen backing him up.
Looking at another example, in the Milwaukee/Cincinnati game of July 22, the total opened at 10 and 10½ (depending on the book). The line consistently moved in favor of the over throughout the early and middle parts of trading. This correction in large part due to Milwaukee’s unexpected and disastrous bullpen maladies at the time, as well as the fact that Milwaukee starter Dave Bush had pitched in relief only 3 days prior to having started the game.
Further supporting these atypical factors was the fact that Cincinnati had a poor starter slated for the game and that the game was taking place in a hitter-friendly stadium, which is likely to exacerbate the impact of any other factors that would tend to cause a game to go over.
Now from the odds makers’ perspective, Milwaukee’s bullpen problems were relatively new, and Bush’s pitching situation was rather unique. The odds makers proceed with prudence and steadiness, and tend not to throw up totals with extra runs tacked on trying to anticipate the sharp turns that are nevertheless the reality of a long season. After identifying and analyzing the causes of this line movement, it was probably reasonable to conclude that there was still value in the existing line, even after the corrections.
While causes are usually specific to one particular game, it may on notable occasion also be indicative of a systemically incorrect estimation of a team’s (or in baseball, a specific starting pitcher’s) tendencies. In those cases, the same line movement can be observed multiple times until the market catches up, obviously making them very valuable situations to identify.
A recent example of this was the trend of home unders at Coors Field early in the 2006 baseball season. As everyone is now well aware, something changed radically in the conditions at Coors in 2006, leading to a stark reduction in the number of runs scored in Colorado. Early in the season, games at Coors typically opened in the vicinity of 11. It was rare to observe a home Rockies total of 10, and lower than that was virtually unheard of.
Now, of course, games at Coors will typically open with a total around 9.5, and will often open significantly lower if good starting pitching is involved.
But it did take some time for the market to catch up with new realities. Early in the season, when an opening total below 10 for a game at Coors was essentially out of the realm of possibility, the market was able to react more quickly than the odds makers. As a result, the extreme trend to the under in Colorado home games from late April through early June was predicated by downward market pressure on totals. To someone who wasn’t paying close attention to the goings on at Coors, this certainly would have seemed quite odd. Those line movements certainly proved telling, for even as the Coors totals were edging towards the 10 figure, games were still routinely going under.
Ultimately, of course, the market can and often does correct early in the day to a point where there is little or no value remaining. But as a sports gambling investor it is nevertheless vital to look at early line movements and determine for yourself the reasons why they occurred and, if relevant, why you didn’t anticipate them when performing your initial handicapping. On a personal level, some of the greatest value in examining early market corrections resides in utilizing them as a learning tool for future handicapping.
On a final note, as we will discuss later, following early line movements there are often late line movements in the opposite direction, or “corrections to the correction”. This frequently happened in the cases of the previously mentioned Colorado home totals, and the Milwaukee/Cincinnati total of July 22nd. But this is an entirely different flavor of line movement with different causes, different value, and a different set of appropriate responses.
With any form of investing, control of one’s emotions and the conscious avoidance of action motivated by fear, panic, and irrational instinct is of paramount importance to long-term success.
In the world of sports gambling, some of the greatest instigators of irrational behavior are line movements. In this series of articles we will discuss the elements of line movements, the factors behind their causes, and the proper ways to interpret and react to them.
There are three general types of line movements in today’s sports betting markets that bear attention; early unidirectional movement -- either during a short period of time or sustained and continuing throughout a good stretch of trading, known as “market trending”; quick pronounced price jumps during the heart of trading, known as “white noise”; and strong movements close to game time, often referred to as “late money”.
In this article we’ll discuss early movements and their impact on the handicapping process. Early line movements are indicative of an opening line that is significantly different from perceived fair market value. A fundamental property of trading markets in general is that the market as a whole tends to be “smarter” than any single prognosticator, and the sports gambling markets are of course no different. If you find yourself in the position of having been surprised by a line movement of this kind, (often resulting in an early bet on the “wrong” side of the market), you should certainly go digging for an explanation as to why the line moved the way it did.
You shouldn’t have to dig too far. A hidden or obscure edge favoring one particular side does not typically cause a major line shift, (and when it does, such shifts tend to come late, representative of so-called “late smart money”). The reasons for early line movements are usually anomalous and related to game-specific conditions. This serves to create “fair” lines that are often out of sync with the set of otherwise “reasonable” lines a professional odds maker would have considered hanging.
This tends to happen quite frequently. In general, the most common early line movements are game specific and of relatively modest magnitude. We can look at two “corrective” line movements in late July that were typical of the shifts that occur on a daily basis on the baseball slate. The first is was the money line for the Minnesota/Cleveland game of July 23, featuring Francisco Liriano pitching for Minnesota.
On July 23, Minnesota opened as a big road favorite of about -160 at Cleveland, with Jake Westbrook pitching for Cleveland. The market “corrected” in favor of Cleveland, making them a significantly smaller underdog.
Looking into that game, the salient factor was that Liriano had just had his worst start of the season the previous week against the very same Cleveland lineup. It is certain that that was the primary reason for the correction, and one can assume that if Liriano had been dominant the week before, there would have been no early correction.
Once the reason for a particular early trend has been determined, it’s necessary to decide whether to follow, ignore, or bet against it. Looking at start where Liriano had gotten hit more closely, we see he had certainly been dealing with extenuating circumstances. He had been traveling extensively due to All-Star Game scheduling shenanigans, and later admitted to having been worn down for the game (mentioned in nearly all game recaps). In light of that, the market correction could be viewed as dubious, and probably not one to be followed, especially considering secondary factors such as Liriano’s usual consistency and the strong bullpen backing him up.
Looking at another example, in the Milwaukee/Cincinnati game of July 22, the total opened at 10 and 10½ (depending on the book). The line consistently moved in favor of the over throughout the early and middle parts of trading. This correction in large part due to Milwaukee’s unexpected and disastrous bullpen maladies at the time, as well as the fact that Milwaukee starter Dave Bush had pitched in relief only 3 days prior to having started the game.
Further supporting these atypical factors was the fact that Cincinnati had a poor starter slated for the game and that the game was taking place in a hitter-friendly stadium, which is likely to exacerbate the impact of any other factors that would tend to cause a game to go over.
Now from the odds makers’ perspective, Milwaukee’s bullpen problems were relatively new, and Bush’s pitching situation was rather unique. The odds makers proceed with prudence and steadiness, and tend not to throw up totals with extra runs tacked on trying to anticipate the sharp turns that are nevertheless the reality of a long season. After identifying and analyzing the causes of this line movement, it was probably reasonable to conclude that there was still value in the existing line, even after the corrections.
While causes are usually specific to one particular game, it may on notable occasion also be indicative of a systemically incorrect estimation of a team’s (or in baseball, a specific starting pitcher’s) tendencies. In those cases, the same line movement can be observed multiple times until the market catches up, obviously making them very valuable situations to identify.
A recent example of this was the trend of home unders at Coors Field early in the 2006 baseball season. As everyone is now well aware, something changed radically in the conditions at Coors in 2006, leading to a stark reduction in the number of runs scored in Colorado. Early in the season, games at Coors typically opened in the vicinity of 11. It was rare to observe a home Rockies total of 10, and lower than that was virtually unheard of.
Now, of course, games at Coors will typically open with a total around 9.5, and will often open significantly lower if good starting pitching is involved.
But it did take some time for the market to catch up with new realities. Early in the season, when an opening total below 10 for a game at Coors was essentially out of the realm of possibility, the market was able to react more quickly than the odds makers. As a result, the extreme trend to the under in Colorado home games from late April through early June was predicated by downward market pressure on totals. To someone who wasn’t paying close attention to the goings on at Coors, this certainly would have seemed quite odd. Those line movements certainly proved telling, for even as the Coors totals were edging towards the 10 figure, games were still routinely going under.
Ultimately, of course, the market can and often does correct early in the day to a point where there is little or no value remaining. But as a sports gambling investor it is nevertheless vital to look at early line movements and determine for yourself the reasons why they occurred and, if relevant, why you didn’t anticipate them when performing your initial handicapping. On a personal level, some of the greatest value in examining early market corrections resides in utilizing them as a learning tool for future handicapping.
On a final note, as we will discuss later, following early line movements there are often late line movements in the opposite direction, or “corrections to the correction”. This frequently happened in the cases of the previously mentioned Colorado home totals, and the Milwaukee/Cincinnati total of July 22nd. But this is an entirely different flavor of line movement with different causes, different value, and a different set of appropriate responses.
