Trading The X Factor 2011: Worth The Risk?

It’s that time of the year again and The X Factor is something that is hard to ignore and as a trader it might also be something that you shouldn’t ignore either.

I took a look at the markets on Saturday to assess the liquidity on The X-Factors Winners market and it seems we could be in business again this year.

In Play Movements

The liquidity on the markets last year was very solid and it was now possible to actually scalp these markets in-play or as a song was being sung. I was glad to see that this is still the case this year too.

Something I have noticed is that about a minute into anyone’s performance it seems like the market has made up its mind about that act and you will then see their price either drift or steam. It’s then pretty easy to just jump on and follow that in order to scalp some profits.

This was something that happened on Saturday night with a few acts in particular. Misha B started the night priced @ 11 and then as she performed Adele’s Rolling in the deep her price began to steam and by the end of the song she was priced @ 8. Her price then continued to steam for the rest of the show down to the current price of 5.5 and she is now in the position of second favourite to win the whole competition.

If you took a risk on The Risk then you could be sitting on a nice bit of profit right now. They were priced @ 18 going into Saturday’s show. After a good performance of Plan B’s She Said they steamed into 10 and after that carried on steaming down to their current trading price of 7!

You can clearly see from these charts just how the movement was made initially and then it just carried on. Looks like a pretty low risk way to trade.

The biggest loser of the weekend has to be poor Amelia Lilly. She was the favourite to win the show @ 4.5 on Saturday night. She then performed an awful version of Billie Jean and her price drifted to 6 and just carried on drifting throughout the show. She was then sensationally eliminated at the first hurdle by her Mentor Kelly Rowland on the Sunday night show. So she had gone from being the favourite to win the show to being OUT within 24 hours. Pretty sensational stuff and I wish I had a tenner on that happening!

Strangely the markets on Betfair still rate Amelia Lilly as being 100 to win even though she has apparently been eliminated. Either they know something we don’t or someone still can’t believe she has exited so quickly!

Long Term Trading

I normally like to take a long term approach to trading this market. Spot a favourite you can imagine being eliminated early on, back them now and lay them later. It’s that simple really.

The favourites are now Janet Devlin (4) and Misha B (5.5) and unless something crazy happens they should both be in the semi-finals at least and so should trade lower.

A group has never won this show before so you might think that its not worth backing The Risk @ 7 however its worth noting that there is normally at least one group in at least the semi-finals every year and so they should trade much lower then 7. One Direction traded as low as 3 when they made it to the final last year so it could be worth a shout. Out of all the groups they seem most likely to go the furthest.

So its probably not that risky to back The Risk after all!


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