We are on the verge of the Cheltenham Festival which is the pinnacle of the jumps racing season. There will be great quality horses and excellent racing markets over the next four days, where we will see over £100 million being matched on the festival alone.
So whether you’re betting or Betfair trading, there is going to be opportunities in there for you and to prepare you for this week I am going to highlight some of the key points of this amazing festival of racing.
Cheltenham tip: Take advantage of the large volume
So the first thing to note about Cheltenham is the volume. It is absolutely huge!
You will see races turnover at the low end is 2 to 3 million. If the conditions are just right, then you could see up to £11 million on a race. However, on average, the races will turn over about £4 million per race. When you compare that to day to day racing, it’s immense because will probably match on average about 10 times less, matching at around four hundred thousand pound.
What’s different to my usual trading strategy when it comes to Cheltenham?
I tend to trade Cheltenham races a little bit differently from the way that I would trade a traditional day to day race. That is because there’s so much money in Cheltenham and that money tends to come in over a longer period of time.
So when I’m trading a day to day race, I tend to focus my energy and effort on the high liquidity period of the race. This is quite a small period in occurring around the last 5 to 10 minutes when there’s lots of money coming through in a structured manner making it possible for me to trade it.
You can catch trades earlier then usual
When we’re looking at all of the money that’s coming through Cheltenham, millions of pounds per race, you tend to find that it comes in over a much longer period of time. So it’s perfectly possible that you may actually end up trading a race for a good half an hour.
Now, typically, it tends to exhibit similar characteristics, as you get closer to the start of the race more and more money arrives. However, one of the unique characteristics about Cheltenham is that money tends to come into the market over a long period of time which makes it perfectly tradable, whereas you may not see that on a day to day basis.
Cheltenham tip: volatility & unique trends
We’ve already discussed that there’s going to be a lot of money in these markets at Cheltenham and that has an interesting effect on the way that they trade.
If you have a large amount of money waiting to get matched, it takes longer for the positions to get much through. As a consequence, the average amount of volatility that you tend to see at Cheltenham is lower than you’ll see on your average race.
Prices tend to get stuck in a smaller range than you would typically see on a day to day race. Now, the interesting thing is over a number of years, the volatility has actually been increasing at Cheltenham. So it will feel a lot more calmer than a traditional market that you’ve been trading in Bet Angel.
However, over the years, it gradually has been getting a little bit more volatile. In other words, the odds are moving around a little bit more and I would expect to see that again this year.
Catch multiple positions
So you’ll often see me posting large P&L’s during Cheltenham on individual races and obviously over the course of the week, they can add up to much bigger numbers. Now the interesting thing is that this is a by-product of the way that Cheltenham trades.
Contrary to popular opinion, I don’t actually use large amounts of money in these markets for a number of reasons that we’ve already discussed. First off, the amount of money that’s available within the markets is much higher. We’re doing it turnover about 10 times what you’d typically expect on a normal rate.
Realistically, I would expect to get 10 times as much from a race at Cheltenham than I would a typical race. Additionally, we’ve got much longer for that money to go through the market. I can actively trade it for that period of time and because the markets behave themselves a little bit more than a low quality, all weather race in the middle of winter on a Tuesday, you tend to find that you can take more than one position.
If you using Betfair trading software like Bet Angel, this is much
So it’s perfectly possible to trade on more than one runner and I tend to trade on more than one runner for a longer period of time:
I’ll open a trade, I’ll close the trade and if I’m happy with the way that the market’s behaving, then I’ll do another and another and another.
That’s typically where you see those big results coming in from any of the races that you see at Cheltenham.
Cheltenham tip: two characteristics to look out for
So bigger moves can develop in Cheltenham markets where you get a nice big trends and they tend to be downs to two key characteristics. The first one is the weather. If they’re going changes, then you can expect some price activity in the underlying market. So it’s worth checking and appraising yourself on horses where that could occur.
A spike interest in a horse
You also have this regular theme that develops at major race meetings, where you get jockey trainer gambles. So if we go back to 2017, Willie Mullins had no winners in the first two days, despite putting out the best part of, I think, 25 or 26 horses, not a single winner came in.
So when Ruby Walsh teamed up with him on the Thursday to win the first race with Yorkhill, that created a bit of interest in the remaining races where that partnership was taking place. Now, what actually happened on that day was that Ruby Walsh actually ran a four timer. So you can imagine at the end of each one of those races activity and the interest in the partnership on the next race really spiked up.
Unsurprisingly, a lot of activity in those markets and you could write some very big trends. Curiously, as we came towards the end of that day on Thursday, people started backing heavily on the Gold Cup the following day with Ruby Walsh and the Mullin’s horse.
The interesting thing was they lost the first race of the next day on the Friday and as a consequence, the whole pattern of activity changed and all of a sudden the favourite in the Gold Cup started to drift and you could have actually traded it in either direction.
So bigger moves do take place at Cheltenham, you just need to be looking very carefully for them.
Cheltenham tip: Understanding Book percentage
What does book percentage mean and how does it benefit you?
Now, one thing you may not be aware of at Cheltenham is that the book percentage is incredibly small.
Of course, this is only relevant if you are using a betting exchange, “BSP” is the Betfair exchange starting price. With a traditional bookmaker or sportsbook the overround is always going to be massive. Especially on the big handicap races.
The advantage that you have is that when you’re betting into a Cheltenham market, you’re going to lose very little to the other side of the book. That includes these really big competitive, massive field handicap races where you get some really big prices.
Now, the problem is that you are going to struggle to pick one winner out of say 20 horses at trading at very big odds. Now you should take an advantage of a feature like Dutching to cover a range of runners. That way you can basically say, I want to win £100 if any of these six horses go on to win the race.
That allows you to capture that value with a decent return at Cheltenham because the markets are so competitive between backers and layers. Now this means you’re going to lose very little in theory to the other side of the book. It’s an excellent way of betting into a market at Cheltenham. It gives you a good chance of winning at a reasonable level of risk.
Cheltenham tip: How in-play here differs to normal racing
There’s something very curious with the in-play markets at Cheltenham. Typically, when we look at day to day racing markets, about 80% of the volume is done pre-off and about 20% in-play.
What we find at Cheltenham is, that there’s more money traded pre-off than there is in-play. That balance shifts even further in favour of the pre-off markets. Typically on average, over the last 10 years, we’ve seen about 85% of volume pre-off at Cheltenham and about 15% in-play.
So as a percentage of the total amount matched in-play actually drops off a little bit at Cheltenham. When you look at the statistics around in-play, you often find that the amount of money that’s going through there tends to be firmer. What do I mean by that? Basically, when something looks like it’s going to win, then the money tends to go down and it tends to be more certain. The same is the case when it looks like a horse is about to lose.
Again, in-play we see that the volatility that you typically see on a day to day basis doesn’t exist there. Additionally, at Cheltenham you tend to find as a percentage of total turnover in-play is slightly smaller.
Cheltenham tip: Plan ahead
Cheltenham runs from Tuesday to Friday and typically every year I use the opening day on Tuesday as a sort of calibration as to how the rest of the week is going to go. You never quite know what’s going to change from one year to the next.
This year, already presents it’s differences as we actually have no crowds at Cheltenham this year, so I’m not completely sure what impact that will have on the markets.
Now typically how I plan ahead is I use that first Tuesday to experiment a bit, to effectively get my feet under the table. You find that the liquidity and interest in the markets grows as the week carries on until we peak on Friday with the Cheltenham Gold Cup, which of course is the feature race at the entire meeting.
So I recommend that you do the same as well, use Tuesday to sort of calibrate your expectations and then hopefully build your confidence as we get towards the business end of the week.
I hope those hints, tips and bits of advice have been useful for you. If you want more detail about what I am talking about and want to fully prepare yourself, then you can get it at the academy where I’ve created long videos on Cheltenham explaining in detail how to trade Cheltenham.
You can also access my trading diaries there from prior years, so you can see how I progressed through each individual day at Cheltenham in prior years. On the academy you can also view videos of actual Cheltenham markets, so if you’ve never seen them before or you’ve forgotten what they’re like, head over to the academy and you can actually watch what the markets look like and how they traded in prior years.
Last but not least, good luck for Cheltenham 2021!
Check out the academy to learn more!