The Betfairians

	Panic… Look for it in others’ trading. Work out what they want to do and how much they’re prepared to pay

It had to happen. So accessible, so exciting and potentially so richly rewarding, the phenomenal growth of betting exchanges since 2001 means that as you read this article thousands of men and women like you and me are, at this very moment, contemplating backs and lays, price momentum and shifting trends. Here at InsideEdge we thought it was high time we invited some of the best punters – all sharing a special interest in cricket markets – to spill the beans.

Americans would no doubt organise a series of seminars, call it a ‘Betfair Boot Camp’ and charge thousands of dollars a head to dispense their wisdom. Instead, we’re in a bar in London, and our gallant Betfairians are letting us earwig their round table for the price of a few libations to loosen their tongues and guarantees of a degree of anonymity. Very decent of them, too.

Below is a transcript of the edited highlights, revealing much about their mindsets, what they bet on and why, and how they consistently turn a profit All of which could help you make a few bob – or at least give you pointers on avoiding some of the pitfalls of punting on the exchanges.

InsideEdge: How did you guys start trading?

Ken: My job from school was in the foreign exchange markets for a bank in Melbourne in Australia.

Riccardo: Similar to me but I work in options. It’s the same though, dealing with maths and numbers.

Hank Sumatra: And for me, but I was in the futures market on Liffe. I left when it went all computerised. I could use my skills from years of trading alongside my love of sport to make money. The overheads help too. Instead of up to nearly two grand a month in London I spend £40 for Sky and £30 for broadband.

Innocent Bystander: Mine’s a lot different to you guys. About ten years ago I was unemployed but knew some stuff about fruit machines. I played them for a living, making about £100 a day. Then I got a job and never played another machine. It was all about the money but, I must admit, I’m very mathematics based so Betfair and sport makes it easy for me.

IE: Maths seem important to you all but you could play chess or poker and most of you don’t. So why sport?

IB: Easy – money. I love sports like cricket and NFL and that makes working on them a pleasure because I enjoy it. Also, normally when I’m betting on a cricket match or something I’m also watching it as well.

HS: It’s my job now. I have to do it and it’s just another way to use the skills of 15 years on a trading floor.

K: So you shout at people at home aving your hands about?

HS: No, I shout at dropped catches or bad shots.

R: I think the money has to be important, but I have a good job so it’s nott my living. I do have a set amount I’m prepared to lose on a given event. I’m generally a draw layer in Test match cricket and I will lose a maximum of 5k on each Test – that’s my limit.

K: It’s just having an opinion, and we have opinions in everything in life. Because of my work, which I’m retired from now, I have a trading mentality so I see a price and work out if it’s right or wrong. Sport is like anything else – as long as the liquidity is there it’s fine and, unlike Forex where the market moves a few ticks, a game can have big swings with both teams oddson within minutes of each other. That’s great for traders.

R: Like the final overs of a cricket match. One wicket or a couple of boundaries and favouritism can change.

HS: That’s why I tend to be a big layer of short odds-on prices. They are throwaway trades that, if the favourite does win, cost you, but if it gets close or they get turned over, then the profit is massive. You can lose a lot of these trades but get one right and you’re in profit overall.

IB: One-day cricket is good for that. When teams have a big score they’re priced up so short, 1.1 maybe and yet that is a minimum risk trade for a layer. Even if the chasing team start okay but lose a wicket, the price won’t shorten much, a few ticks maybe.

HS: Like Hampshire this summer. (Surrey vs Hampshire, Cheltenham and Gloucester Trophy quarter-final at the Oval. Surrey batted first and scored 356, Hampshire lost an opening batsman first ball.) They were 1.04 which was stupid because even if they got rolled over the loss was hardly anything and it took no account of the game. The pitch was flat, the outfield quick and scoring easy. Also, I always try and look for match winners when betting. Hampshire had Sean Irvine, John Crawley and Shane Watson. Even behind these they had good players that can bat. I was a layer at the low prices and fed a lot back as it lengthened out to 1.4 and upwards.

IB: How much did you win?

HS: Can’t remember exactly but it had noughts on the end.

K: My biggest win was a Test match in 2003. South Africa against England. I think it was Trent Bridge and it was never going to be a draw. I made £11,500.

IE: Any losses, Ken?

K: A 3k loss on one Test. I traded it badly, a couple of things went against me and that was it.

IE: Interesting that you blamed yourself, ‘I traded it badly’…

K: No one else to blame. It’s me making the decisions and hitting the button. Bad luck does happen but it’s still me calling the shots.

R: Exactly. You win and you lose, nothing else matters. I did 5k at Old Trafford this year, the drawn Test, but overall I’m well up on laying draws in Test cricket.

HS: That’s what I was taught from the very beginning when I started work at Liffe. Don’t find excuses. Get on and work hard.

IB: Talking of things going against you, I cocked up the bloody cricket in South Africa last winter. I’d been there and knew the dark came in in Durban and yet in Cape Town it’s lighter much longer. Durban ended a draw because of bad light. You could see the rain clouds coming in on the radar images, but in Cape Town I kept trading from the radar as it showed clouds but it never went to bad light. I’ve been there so I should know that.

IE: What radar were you looking at?

IB: Each government has a meteorological service with radar and satellite images. They’re great for checking the weather fronts coming in.

R: Don’t start on the weather. That’s a whole argument on its own. They’re great sites but some show cloud which is echo and it can catch you out.

IE: So are they good to use or not?

IB: Definitely but like anything, you have to learn about them. I also find web cams around the city. For Durban I had cams on the roads north and south and it was raining.

K: But all these things, cams, radar are just information – it’s up to the person how well they use it. Last year against the West Indies at Old Trafford a camera showed dark clouds approaching the ground and some spots of rain. The draw went from about 2.3 to about 1.7 in seconds.

IB: I remember that. First mention of rain by the commentators and the draw goes into freefall.

HS: Do Botham and the rest know they move markets?

IB: Last winter I was at the first Test in Pretoria. It was raining and I was on the phone to Betfair trading.

R: I love rain on the first day. Most Test matches are over in four days so all a short first day does is give me really short prices to lay.

IE: You all bet a lot on cricket but do you trade other sports?

R: It’s difficult for me. I like Test-match cricket because I’m at work. As a broker I can have one hour working, the next watching the TV and Betfair, so what is the worst that can happen to me in that hour? A couple of wickets.

IB: I do NFL. I love the game and it’s so statistically based that you can do all the research, compare the prices and find some trades. Also, I trade the tennis. Big swings on single points.

K: Baseball. Did you know that most matches – a high percentage – finish with two-runs-or-more win margins, but it depends on the pitching rotas? I also trade golf and, naturally, Aussie rules. In all of my trading, stats are important. For the cricket I use an Aussie site, www.howstat.com.au. American sports are well served by loads of sites. The thing about stats is they don’t lie.

HS: No they don’t. Cricket develops over time, so you can adjust trades as the game changes. I do NFL and footie as well. Half-time/full-time for value.

R: If you get your first trades right on cricket, you can wait for the end if it gets frenetic and then try and profit from the big swings while only risking your profit. It moves in stages.

HS: Are you a position-taker or a scalper?

R: Position.

IB: Position.

K: Bit of both, but I can never remember one session from the rest.

HS: Well, you are an Aussie. I can talk you through some from this summer if you’d like.
K: The Ashes being mentioned? That really was a short odds-on, wasn’t it.

HS: Is there room for a kind of sports hedge fund? Twenty-odd traders across the markets and sports working as a unit.

R: Is there the liquidity?

IE: Do any of you find trading causing problems with wives or girlfriends?

R: No, it doesn’t affect my home life. There was one day this summer, though, when we were all at a christening in the Midlands – a relative of my wife. I heard a score from the cricket and thought, ‘I’ve a lot of money on this’, and then after the service my wife said she’d go back to the hotel to look after our eldest son. ‘Have a drink with the others,’ she said. ‘No,’ I replied, virtuously. ‘It’s your family, go and enjoy the afternoon and I’ll take Michael to the hotel.’

HS: TV on, trading the cricket?

R: Yep. Just as well really. I shuffled a few thousand around and my wife never knew.

K: Trading and brownie points. Now that is a green-green screen.

IB: My job pays the mortgage and stuff; Betfair is for the fun money, the trips and holidays.

HS: Only problem I have is Andy Bichel. That Aussie has cost me more than any other player in any sport.

IE: One final word of advice?

IB: Oppose strength. People are sheep so you want to be the wolf.

HS: I love knowing my maximum loss.

K: Panic… Look for it in others’ trading. Work out what they want to do and how much they’re prepared to pay to do it.

R: Some people will want to get a trade on when something happens. A wicket has fallen and a bloke wanted to back 5k. The price was 3.8 so I put up 3k at 3.2 and he chased the market all the way down. It was a huge over-reaction and two minutes later I’d got out at a higher price for a profit.

So it’s fitting that the conversation ends with talk of profit. The last word? With an Aussie in the group it could only be about the Ashes.

K: At least I made money on the series.

And that, as we have learned, is all that really counts.