Hennessy Gold Cup / Ladbrokes Trophy
The Hennessy Gold Cup, or Ladbrokes Trophy, depending on your heritage is one of my favourite horse races of the year.
This particular horse race is just up the road from me in Newbury and it often trades well. I have fond memories of this time of year for two reasons. The first reason is the Ladbrokes Trophy / Hennessy Gold Cup meeting has always been an interesting meeting for me. I’ve always enjoyed it and I’ve been long term profitable on this market. It’s often just about the right type of race.
But the second reason is because of what I did with Betfair many years ago. Back in 2006 and 2007, Betfair actually went around financial market exhibitions and pitched the Betfair concept to people, it worked beautifully well.
My first public talk about Betfair trading
To understand how it happened, this was a period when I was still in the early part of my career as a full-time professional Betfair trader.
Back then I still did a weekly column for Shares magazine. Part of the reason for doing that was when I first started trading on Betfair, I had no idea if it would work or now or for how long. So, excuse the pun, I was hedging my bets bit by writing a weekly column and getting paid for it.
That led to me go out and do some of the talks that Shares magazine would do. Now and again, they would go out and do an event where they’d invite loads of people in and people like me would stand up and talk to everybody about our specialist subject. There were exhibits and so on, you get the picture.
Eventually, I went up to them and said to them, why don’t I talk about trading on betting exchanges? Because it’s new, it’s interesting and it will fall right into the mix of this. Because I’d come from the writing or all about financial markets and I was now trading on sports, I could join the two together.
I was slightly nervous because the concept was so alien. I’ve always faced scepticism throughout my entire career, even now when I’ve so much work and have a really long well-documented track record. But back then nobody even knew about the Betfair betting exchange, let alone traded sports markets. So I had to have a one-liner that would grab peoples attention. I would generally say to people, you know, this is this stock market for sports. The first time I talked about the trading opportunity on betting exchanges was in 2004. The very first one I did was, curiously, in Clitheroe, Lancashire.
People in financial markets, tended to get it straight away, especially when you’re talking to existing day traders. They tended to understand exactly what’s going on and they’ll ask all sorts questions about volatility, risk and time to expiry and all of those things. I could actually dovetail it really nicely into that.
When I first started doing this the interesting thing was that I would actually demonstrate using other people’s software because Bet Angel did not exist at that time. Bet Angel only came out of my frustration at not being able to do the things that I wanted to do and eventually I started to integrate that into my presentations. The person I choose to work with to create Bet Angel actually came out of one of those early talks. It’s funny how things like that happen, isn’t it?
How Betfair funded financial trader events
What actually happened from there was when I was talking to Betfair one year, they had a bit of marketing budget and after my suggestion, they decided that we would actually go to a fully-fledged investor / financial market trade show.
If I remember correctly. We did Active Investor, IX Investor the World Money Show, Active Investor and the Invest shows. I was even invited to Barcelona to do a talk where I met up struck up an ongoing dialogue with the then-unknown, Paulo Rebelo.
It was funny to go to these shows because of course, everybody was expecting a stock or equity derivative trading services and stuff like that. And they’re in the middle of these stands was Betfair. It just didn’t look right. Generally speaking, that’s the response that we would get.
You are not welcome here, it’s just Gambling.
I remember on the first show that we did. People would come along and ask, what are you doing here? You know, you’re just gambling. We don’t want you here. Or words to that effect.
I would say, “Well actually, it’s not gambling but yes, it is. If you back a horse…….” Why don’t you stop and listen for a few seconds and just let me explain what I’m talking about?
But it was clear that people didn’t really get the concept at that particular point in time. But even so we did a couple of exhibitions with varying success. And then one came up around this time the year and it would have been involved on a Saturday. And of course, the Hennessy Gold Cup was on. I was thinking, I don’t really want to do that. I want to be trading the Hennessy Gold Cup.
Why I started trading live
After a few exhibitions, we figured out that if we talked about the concept during one of the speaker slots, then basically the stand would fill up. Before the speaker slot, it was tumbleweed. No speaker slot, meant all day tumbleweed.
So when we had this opportunity to do a speaker pitch on a Saturday and at a decent exhibition, my thoughts were mixed. I’d love to do that, but there is no economic payoff. Saturdays have always been where I make most of my money each week and giving one up was sacrilege. I’d never get enough from new business to cover a Saturday off. I was in turmoil because I really wanted to trade the Hennessy Gold Cup. But obviously, it would be a great opportunity to talk to those people and support Betfair. So we came up with a plan I would do the speaker slot, but then return to the stand and trade while somebody else could field the questions.
Doing a speaker slot and then trading live turned out to be a very potent mix. This was because if you sat there actually doing it, people can say. “I recognise that it looks very familiar to me” But then the penny started to drop. Hold on, that’s not the dollar or oil or an equity. It can’t be because it’s a Saturday? So what market you’re trading? I just said, it’s the quarter past three at Newbury. Suddenly people are sort of going, oh, wow, you know, what’s this? How does this work? So it actually worked really well. I’ll never forget that Saturday when we had those big races on, because, I actually managed to get the best of both worlds.
The problem with trading live
I managed to talk about the concept and go through various things with people in terms of how it was similar to financial markets. But it was tough to shoehorn that into a trade every ten minutes, so I actually ended up dropping the minor races to do a show and tell on the concept. You also had this problem that when people see you ‘printing money’ in front of their eyes, the questions started coming in thick and fast. Therefore it was difficult to do a full-blooded session because, as you will know if you have traded these markets, it can be really intense sometimes. Trying to talk over a trade, slows you down and sometimes you’d break away and then suddenly get swamped. But people need breaks and stuff like that.
But the satisfaction of pulling off a really good trade in front of all these people in that environment was just one of the best feelings that I ever had. We felt like we were doing a really good job of trying to educate and tell people exactly how all of this worked and how the whole thing could be moved forward. In these early years, I’d envisaged that Betfair would be just like any other financial market and that, in fact, we would be heading in that direction and not, you know, back towards bookmaker and sportsbook and stuff like that. It was just like such a leap forward and one that could be embraced by a whole number of people.
I was keen to do more of these types of events, but the following year no budget was allocated to any events. Eventually, the education team and Betfair was dismantled and all events just ground to a halt. I can look back now and reflect on those times as invigorating and exciting, but they only really lasted for a couple of years. Since then nothing similar has happened and in reality, my activity is so much bigger now that Saturdays would be even more of a strain than before.
The financial market sector was ripe for education and was stuffed full of people who would pump liquidity into the markets and knew how to trade. You didn’t need to tell these people how they should be trading, they knew already. They just wanted the market mechanics. They adopted it quickly and knew what to do, but the introduction of the premium charge pretty much completely killed off that entire customer base. No such charge exists in financial markets and this along with with the push to the punter end of the scale killed any realistic chance of reaching these people.
I think that’s a shame because, as you know, the markets really are e a great way of participating in sports markets. I think our message came across so loud and clear when we actually did a talk about it, then invited people back to the stands and actually traded live.
But when it comes around to this time of year, I always remember it because it was great fun. It’s very difficult to trade the feature race today without remembering doing it live in front of a whole range of people.
So that’s why this race is special to me as I remember all those fun times when I traded live for Betfair at financial market exhibitions.