Today we have a great interview with Matt from Punt.com who is a professional tennis trader.
I have been following Matt on Twitter for a long while now and he is one of the more entertaining tennis traders on the site and definitely knows his stuff so this is promising to be a great read.
Hello Matt, thanks for finding the time to talk to the Sports Trading Life readers. It is best we start with the standard intro question… How long have you been trading full time and how did you end up getting into it?
I’ve been trading full time for about 10 years now. It’s gone quickly!
My boss in my old job got me into betting in 2000/2001. At the time I knew nothing about it. He had this crackpot horse racing system which we all know by the name Martingale.. you can see where this is going. I quickly lost my money, and so did he. I decided to spend a while working out the maths of betting in the hope that there might be a way to make my money back, but at this point I was not going to place another bet unless I found something concrete.
At the time Betfair and Flutter were very new and I stumbled upon Flutter one day, was totally confused about what it was. When Flutter was bought by Betfair that’s around the time I knuckled down to figuring it out. Christmas 2001 I got stuck into arbing live markets against bookmakers with the goal of making back my lost money. I didn’t really have a goal beyond that at the time. I started with £75 in my Betfair account and made it back 50p at a time!
How long do you think it took you to realise you could make consistent profits? Was there a eureka moment?
After I made back my lost money, the nature of exchange betting began to settle in my mind and I ‘discovered’ trading, rather than simply arbing… The Masters snooker was perhaps the first tournament I traded, in 2002… Liquidity was very thin, no one click software, so it was all done through the website as fast as possible. That’s as close to a Eureka moment as I have had, though I realised it was risky stuff. My job paid very little, so anything I made was a bonus, but also I didn’t have much to play with, so I was ultra cautious and set very tight tolerances. The result was a P/L with very few losses, and profits that began to slowly outweigh my wages, until I was making far more than I was at work.
Apart from tennis do you bet or trade on any other sports? Do you actually do any straight win betting these days or is all your work done in-play now?
I trade only tennis properly in play. That’s about all I have time for trading wise these days. I do bet on a lot of other things too, I’m involved with a lot of automated betting on other sports and markets. I used to trade everything under the sun, but back then I was either single, living at my parents still or didn’t have kids… time is at a premium these days.
So, how often do you trade? Are you by the screen for much of the day?
I tend to trade most weeks of the tennis season, but more seriously when the larger tournaments are on. I will be at the screen from the start of play until the end usually.. this can be 9-12 hours, that’s quite hard work.
When it comes to Tennis trading, how much research do you do beforehand or do you just look for opportunities in-play?
In comparison to some, I have to admit I’m pretty lazy these days. I don’t do a massive amount of pre match research, I tend to turn up, load up my spreadsheet and trade away… I should do more.
What do you have on your spreadsheet in particular that helps with the trading?
I have a load of stuff that helps me calculate what I think the right price is at any given scoreline / situation and what the right stake size is. I also can use the sheet to place bets automatically via Bet Angel, which is a nice feature and saves time occasionally, though I still prefer the one click hands on method. I tend to spend most days glued to excel, whether I’m trading or not.
Do you ever take positions before the match starts at all?
Yes I do. Not all the time, only if there’s stand out value / market wants a particular player.
Most newbie traders go wrong when they don’t know how much profit to try and aim for per trade. On average how many ticks do you look to try and gain when you open a position in a tennis match?
I don’t look for a particular number of ticks, or target profit. I think those sorts of things aren’t the correct way to technically trade, though I do recognize they can have a place. It depends on how you trade, whether you are a supply/demand type or a value type… or both. If targets help you mentally then fair enough, who am I to judge, but there can be some significant psychological holes that targets can open up.
Personally I trade and alter my position purely on a value basis, that is, the location of the current price in relation to my idea of the right price as things stand moment to moment. If that determines that I should be risking less than I currently am, then I cut/take some profit, if its greater value, then I add to my position.
This really depends heavily on me calculating the right price well, if I do, then market moves on average should dictate that I come out on top. This is a more pure way of trading, it means taking sizable positions when the value is greatest and taking the knocks when fortune goes against me. This sort of trading is nothing like how I used to operate, back in the beginning I was very much a set position size trader. If I look back at the super smooth P/Ls I had then, perhaps I should go back to that!
Given the situation with premium charge though, taking risk is more favourable these days, and it’s also a bit more scalable, and scales up when it’s right to scale up. It’s possibly not for the novice trader, or the risk averse… I’ve learnt over a long time to be happy with risk, it doesn’t come easy if you are used to scalping 3 ticks here and there.
What would you say your average risk reward ratio is? How many ticks are you willing to risk vs the amount you hope to win?
Because of the way I trade it’s not really possible for me to answer this one accurately. I’m trading back and forth near the front of the market after most points and I risk what I hope is appropriate for the value on offer.
Do you ever find the in-play delay to be a hindrance?
Yes. I would make a massive amount more if it wasn’t there, or should I say, wasn’t there for me and was for everyone else! I know a lot of people who send people to the courts to negate this. Perhaps I should have got into that, but the arms race in technology terms has moved well beyond making it worthwhile to any ordinary new entrants, unless you make a serious investment and know what you are doing. Also the tennis authorities take a dim view of it at some tournaments, they know who looks suspicious… 3 or 4 people with heavy coats on, in hot weather, out on court 36 on the Monday morning of a tiny tournament fidgeting after each point is played, does give the game away slightly.
I do fine with the delay though, I’m about decent pricing rather than relying on speed for scalping or sniping those unfortunate enough to not have cancelled their bets at the start of the point.
What trading set up do you work with?
Couple of PCs, 3 or 4 screens, TV, broadband.. standard stuff, nothing unusual and no motorised radio telescope like sat dishes in the garden. I use Bet Angel with it’s excel connectivity.
Is your strategy quite rigid or do you keep it flexible depending on how things develop?
I don’t change strategy normally, though my strategy is flexible, if that makes sense. If I go off piste, then I get very mixed results and it’s sometimes tough to know if you were right or wrong.
When you open a position in a tennis match, what are you normally looking for? A favourite that is priced too low that you want to take on? An underdog that starts off well but you expect to run out of steam? Etc?
Just the price being out of line with my price. Simple. That can take many forms… I might filter it sometimes if it means that I’ll be up against a massive amount of momentum or something physical in the match that I can see.
How did the Premium charge introduction affect you? You left quite an angry post on your blog a few years back when it was introduced…
Hehe yes I did. Maybe I should remove it, but maybe not. It’s a frustrating situation for exchange users. I overreacted from a personal perspective, it’s not affected me anything like as much as I thought it might. I guess I’m over it to a large extent, I’d rather spend my time thinking about something else, though I’d rather bet somewhere where it doesn’t exist, that isn’t quite possible yet. I could write a book on the situation, but I won’t bore you with it, to be honest, it bores me and I just get frustrated.
What is the biggest win and also biggest loss you have had on the markets?
Biggest win about £37k, biggest loss, around £30k.
What is the most memorable tennis match you have traded and why?
Probably the one with my biggest win, Serena Williams v Hantuchova at Wimbledon a few years ago. I believe Serena went a set down and possibly a break down, she had been suffering with cramp, and there was some confusion on the seriousness of it. It was clear to me that really she was ready to boss the match if she was half fit. The odds were short on Hantuchova, being well ahead in the score. When the first drop of rain hit my window (I live a couple of miles from Wimbledon) I layed and continued laying when the first drop hit the court. They went off, she had a massage, ate some crisps (probably), came out and won the match. I should probably have run my position more, but that was about as much as I’d ever layed at the time, I let the position boss my actions a bit and gave it away a bit cheaply. I had a £100k green on Serena at one point, but I couldn’t complain with £37,000!
Are you able to say what sort of stake size do you trade with?
My stakes vary from situation to situation… but I will expose up to about £40k in a grandslam match. The value on offer to do that has to be extreme.
One of the biggest challenges to trading full time is spending time on your own, do you find this easy to cope with? Surely things such as Twitter can help…
Twitter I’ve found to be quite good fun, but distracting. I’m trying to cut down on it a little during the matches. I don’t really suffer with loneliness during trading, because it’s so focused, and I have other people that I work with that I chat to on MSN etc. Perhaps when I’m not trading and doing other stuff online that’s not work, and I stop to think about it, it can be a bit tougher. It’s easier now my wife is at home all the time though. After 10 years, I have real appreciation for what working in a team would be like…
Many people read this site as they are hoping to take their trading to another level. What advice could you offer them?
Start small, stay small for longer than you think. It is possible to grow big things from small banks, but it takes a long time, it’s a marathon and not a sprint. Don’t ever try to earn money for a specific item or goal, the goal is always bank preservation and slow but steady growth. Don’t stand still, otherwise your competition overtake you, analyse your wins as much as your losses and keep every piece of data on anything you can keep data on.
Maths is a massively important aspect of what we do, if yours is not up to scratch then start learning, probability and statistics are vital to understand. I’ve learnt so much in the time I’ve been doing this and still am.
Don’t forget when you place a bet, there is someone taking the opposite side, who are they and why? The intelligence level of market participants can range from Joe Punter to some of the people I work with and against who are incredible smart… would you rather place your bet against an emotional Mr Punter who’s scared he’s going to lose out? or a nuclear physicist who’s just run 50,000 monte carlo simulations to determine that he’s right and you are wrong. Try to find situations where your opposition is beatable.
Going full time is a dream for many, when people ask what you do for a living. What do you tell them and how do you explain it?
I usually say I’m a day trader. Which I am, I just do it on sports instead of stocks or commodities. I’ve given up being too precious about the gambler tag though, maybe that is down to my personal track record.. It’s a good question, I’m sticking with trader I think. I just tell them straight what I’m trading and how. Likening it to the stock market usually helps.
Thanks for your time Matt.
You can follow Matt on Twitter @PuntDotCom
Also, read through Matt’s blog @ Punt.com (Maybe we can all persuade him to get blogging once again 😉 )