How can it be possible to trade time in football markets? It seems quite a far-fetched statement to make but it will make sense to you in a minute.
Let me explain…
Sports trading markets are unique compared to other financial markets as they all operate within a finite amount of time. For instance, a football market is opened a few days before the event. Once the event is in play, there are roughly 90 minutes before the market is closed forever. This is radically different to a foreign exchange market for example that is open 24 hours a day, 5 days a week for as long as a currency exists.
There’s a lot that has to happen in the short space of time that a sports market is open. As the market end gets closer (e.g, the end of a football match), people scramble to find the best position as soon, as the market will be closed.
Time Decay Drives Odds Movement on Betfair
As the remaining time in a football match decays, the odds will naturally gravitate towards the outcome that the current scoreline determines. For example, if the score is currently 1-0 at 80 minutes, the odds of 1-0 in the correct score market will be lowered as there is less time for another goal to be scored. As time decays, so does the price because the chance of the current score-line remaining increases.
Of course, it’s not always this straightforward. The team that is 1-0 up may face constant attacks from their opponents in the last 10 minutes, as is often the case. The odds will fluctuate in this time, but unless another goal is scored, the 1-0 odds will come in all the way to 1.01 in the final moments.
Should You Trade Time Decay In Low Scoring Games?
Football inherently has a small number of goals throughout a typical game. You will tend to find the most common scoreline is 1-1. This is ideal for trading time decay but will of course depend on the league and the teams on the pitch. Different styles of play throughout various leagues will affect how many goals are likely to be scored in each league.
We’ve got a separate article about predicting a football draw here.
If we assume that the average amount of goals in any given match is around two, we can make a point of looking for games that have an even lower goal prediction. With a small amount of research, it’s possible to find games where both teams have a higher incentive to defend than to attack. This generally results in fewer goals, so long as other factors are also in line. For example, this might not be a good idea if both teams are playing their best strikers!
In a match where the score-line is predictably low, we can assume that as time decays, the odds of a draw and 0-0 will shorten throughout the game. It may be an idea to back the draw at the beginning of these games as that will generally be the highest point unless there are any goals scored. You can then look to place a lay bet further on in the game once the odds have dropped. Alternatively, you can use the Betfair Exchange cash-out function if you are just using the website to place your bets. If there have been no goals scored between placing your back and lay bet, the bets will profit.
You can take this idea one step further by finding out when certain teams are most likely to score. For instance in the 2016/17 season, Manchester United scored 54 goals and on average, they scored on the 50th minute. This information and other stats are easily found online, free of charge. Knowing when teams are likely to score will help you to decide where to enter and exit your trades, although there are hundreds of other factors you may want to consider. At the end of the day, it generally comes down to personal preference. Some people prefer to watch the game as they can read the play better than others who prefer a more stats-reliant approach.
Is Time Decay Useful When Laying The Draw?
Laying the draw is one of the most common strategies in football so it would be silly not to mention it in this context. The strategy relies on time decay in order to work. For example, if you lay the draw pre-match and don’t cash out, you’re either going to have a very bumpy P/L or a very red one.
Most traders who are laying the draw will use time decay to their advantage. Some traders prefer to lay the draw at certain times in a game. For example, laying the draw at halftime is quite common as in theory, both teams will have spent the first half sussing each other out and spend half-time talking about possible scoring opportunities. Time decay becomes a strong factor as because half of the game has passed, the odds of a draw will now be much lower. This is because there haven’t been any goals scored yet and because there is now less time to score any future goals.
By laying at these lower odds, the risk-reward ratio is more favourable than it would be at the start of the match. If a goal is scored within the last 5 minutes, the trader will be in profit as the draw odds will be very high because there is less time for their opponents to equalise.
Top Time Decay Risks:
Although football is a low-scoring game, you can be caught out by unexpected goals. It’s vital that you form a strategy with risk management in mind and have a plan of action if things turn south. If you’re going to be scalping the match odds as they move gradually over time, what are you going to do if there’s an unexpected goal from midfield? These things will happen from time to time and they will hurt if you haven’t planned for them. Here’s a checklist of things to consider when trading time decay in football:
- Under what conditions will you enter a trade?
- What’s your exit strategy?
- How are you going to protect yourself from unexpected goals?
- At what point in the game will you be most active?
- At what point in the game will you avoid trading?
So be sure to keep time decay in mind when trading the football…