What Causes Betting Odds to Change?

Money is the only thing that causes betting odds to move.

However, currency is just the messenger, public perception is the driving force.

If you want to win, anticipating movement is a natural place to start, so in this post, we’ll take a look at the main variables that shape the betting public’s view.

What Moves Pre-Race Prices?

Opinion and speculation are great, but mostly hot air. When people ‘put their money where their mouth is’ the market responds. It can happen in two different ways, broken down further in a sec..

• Heavy backing
• Inverse proportionality

The first is quite obvious, and often discussed in the racing media. Heavy backing is focused upon by the various racing channels because its an exciting talking point. Speculation and intrigue around gambling yards and the like make for far better viewing.

It’s simple if market support outweighs the price it has to contract.

On the other hand, inverse proportionality is just as important. Although you’ll find the pundits talking about it far less…

As the name suggests; the price of odds is merely a reflection of the sum of other prices within that market (a bit of a mouthful there, sorry).

Maybe it’s clearer to express it like this:

Price A + Price B = Opposite of Price C

So, if Price A should change, then something else has to also. Meaning, odds movement isn’t always to do with betting activity on the given selection. This is exactly why algorithms like cross-matching work (with a small margin involved).

Finding Early Odds Changes in Horse Racing:

You can find short-cuts online to morning odds changes like the image below…

But do they paint an honest picture?

Source: At The Races Movers

A quick tool to highlight specific selection for sure, but be careful, it can be quite misleading…

For example, the image above shows Petrucci has moved from 20/1 to 6/1, a massive 70% shift in price. But remember; in the morning, bookmakers prices are elusive (and sometimes just for show).

The odds may have changed without any real basis.

Finding the real reason odds move is better-indicated by matched volume on the Betfair exchange.

Statistical Data % Form:

The next questions to pop into aspiring traders and punters mind are…

How much do statistics affect price changes? and Does form change betting odds?

It may not be the answer you’re expecting – stats and form have very little impact on pre-race changes. Clearly, they are an influencing factor when it comes to creating a tissue although the information isn’t ‘live’. As an example, they are not like streaming charts, where new information is consistently updated (even if it’s on a micro-level).

On the other hand, two things that definitely do possess the ability to change odds are news and weather.

Similar to betting volumes and streaming information, the news is a source of change. As the very famous saying goes:

“In a world of change, the learners shall inherit the earth, while the learned shall find themselves perfectly suited for a world that no longer exists.”
– Eric Hoffer

Weather is extremely similar for obvious reasons – it changes all the time.

Market Trends…

For swing trading, all of the aforementioned angles are fascinating. However, none are more interesting than the relationship between implied probability and live betting activity.

Betting odds are much like anything in life, there is only one thing that really changes price – supply and demand.

Bearing this in mind can be helpful when anticipating a potential move. Anticipating a movement successfully is vital, as it will allow you to be first (or one of the first) in exploiting the margin between the current price and the ‘real’ probability.

So what indicators start a ‘trend?’.

• Bookmakers Liability (When they hedge)
• Herd Mentality (Press Releases)
• Large Influential Tipsters (Pricewise for example)
• Insider Betting (Large & Unexpected)

The trick, if ever there were one – is to catch on fast…

Specialist Help: Pre-Race Trading Guide PDF