Trading the Ryder Cup

30/09/2016 | By | Reply More

Once every two years, the sporting world turns its attention to what is turning into a classic sporting Rivalry, the Ryder Cup.

Many years ago it didn’t have anything like the profile it does now. Post war it was a chance of US golfers to show how much better they were than UK players. Then the rules changed to make their opponents UK and Ireland, but that was still dominated by the US. Then in 1985 when it became the US and Europe and the real rivalry began. Both sides are desperate to win  and this is what really stokes up the tension and rhetoric each time. It often makes for a great sporting contest and trading market.

The market

From a trading perspective, there are many markets but the main market is, obviously, the winner market. You can pick either side to win or the whole tournament could end up even. Volume on this market has traditionally reached around £20m by the finish.

The odds

The miracle at Medina was the most spectacular trading market yet at this tournament and the US traded as low as 1.06, Europe at minimum odds and the Tie 1.12; it was amazing. If you had laid each at their lowest point just once you would have returned nearly 300% on your stake.

Obviously, closer tournaments produce better trading conditions but past prices before the off in past haven’t been great guides for how the tournament will play out. The favourites since 2004 have started at 1.67, 1.96, 2.07, 1.62, 1.90, 1.74 and this year 1.63. There has been little correlation so far, in Betfair’s history, between SP and the winning margin of either side. Since 1985 there have been two 9 point wins but everything else has been much tighter, 67% of competitions have finished within 3 points or less. So it would seem sensible to point to another close contest. That said the US will throw everything at this one, so I’m less confident that Europe can stay with the pace.

In the post-war period there have only been two ties, once in 1969 and again twenty years later. Maybe the next will be in 2019, LOL? But that only correlates to somewhere around a 5-6% chance or odds of 20. The tie is currently at 13 (7.6%) and has remained a similar vaue on pretty much each tournament I’ve watched.

Curiously for something that doesn’t happen very often the tie has shortened quite a bit in play over the years and backing the tie has worked really well in the Ryder cup. In 2004 and 2006 when Europe ran away with the tournament, it hardly shortened at all. But subsequent years is has touched 6 & 4’s respectively before the drama at Medina when it looked like a tie was quite likely. So if we expect a tight result then the draw will certainly shorten. For this to happen we need Europe to get a strong start.

In the exchanges history, backing Europe has been a slam dunk, but that’s no surprise given how often they have won since decent records began in 2004. But it’s interesting to note that all prices have generally shortened. But thanks to the how tight things get prices have also drifted a lot as well!

Sometimes it’s better to look to exceptions for guidance. In 2004 Europe drifted from 3.10 to 3.65 on the way to thumping the US and a year later when repeating that feat they drifted from 1.96 to 2.14. Basically, it seems whatever trading position you take at the off it will pay to some extent. But again, it’s how competitive the competition is that will determine the size of the swing. If you want to take a lower risk position you may want to lay the draw (tie) to back it later. Previous years this fly around all over the place as we near the end and it’s likely to produce several chances of a payoff.

But probably the most sensible strategy overall is to lay the shortest team at odds on near the start. If the opponents come into the competition at some point their odds will also shorten to odds on and you can trade out by laying them for a profit overall. The underlying premise is that if you lay two things under two, you are guaranteed a profit. You can then use that profit to do whatever you want through the rest of the tournament.

Smarting from a number of defeats I’m sure the US will put up a fair old fight this year. I’m looking forward to the action!

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Category: Trading strategies

About the Author ()

I left a good job in the consumer technology industry to go a trade on Betfair for a living way back in June 2000. I've been here ever since pushing very boundaries of what's possible on betting exchanges and loved every minute of it.

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