Tennis Trading: When Should You Lay Strong Favourites?
My experience with Tennis Trading has shown me that the most lucrative opportunities often crop up when you have a strong favourite (1.40 and below) who does not quite live up to expectations.
Trying to spot a strong favourite that might “flop” before the match is often impossible. They are priced at such low odds by the markets for a reason and that reason is usually statistical. If you try and look in the statistics for a reason to take on a strong favourite then it is like searching for a needle in a haystack.
The best way to spot heavy favourites that might struggle or lose is by actually watching the match in-play and seeing how they get on.
The tennis markets are quite rigid and stubborn which can actually be a good thing. For example, you could have a player like Rafael Nadal start the match priced @ 1.02 but if he is showing signs of having an off day you will still find you can lay him at low odds before the markets realise he might be in for a harder match then expected. I regularly love to take on the low priced favourites since it is usually so low risk but with high potential rewards and here are some of the things I look for.
Favourite Being Broken
This might sound like an obvious thing to look for but let me explain. If the favourite has their serve broken you might often find that they win the serve back very quickly. When this happens they will then usually return to their starting price despite the underdog showing that they have it in them to break the favourites serve. In my view, if it has already happened once then it can easily happen again and this is a good time to lay the favourite for the next few games to see what develops. If it seems like the favourite now has the match under control then you can just exit for a small loss. As mentioned, its a small risk but if the underdog was to break through once again then you could see an even bigger swing then the one you missed out on.
Tight First Set
The biggest opportunities often arrive when the first set is much tighter then it should be when the favourite is meant to be so strong. If you see the underdog is holding serve well and the score goes to 3-3, 4-4 etc then this is a great time to lay the strong favourite. If the underdog is holding serve well then there is every chance that he might score a break point or take the set into a tie break where anything can happen.
A recent example of this was found in Nadal’s amazing exit from Wimbledon. Nadal was having a very hard first set against Rosol with the first set going to a tie break at 6-6. The highest Nadal traded during that first set was 1.06 and, as we all know, he ended up losing!
If I have not had a chance to lay a strong favourite during the 1st set which then goes to a tie break then you can be sure I will be laying them in the tie break. This is the tennis equivalent of a penalty shoot out and if the favourite is strong enough they will usually still be hovering around their starting price when the tie break begins which is excellent value.
In a tie break you don’t even need the underdog to win it to get a big swing in odds since just going 2 points behind is enough for a big market swing. A good example of this was Serena Williams exit from the French Open. The 2nd set went to a tie break with Williams not trading higher then 1.10 at that point and actually trading as low as 1.01 during the tie break. However, once she lost the tie-break the match was level at 1 set each with one more set to decide it where anything could happen from that point.
As we all know, she went and lost the match. It would not have cost you many ticks to have taken on Williams before the tie break since there was a huge amount of ticks to be gained if she ended up losing it!
This does not happen often but happened to great effect in the French Open with Andy Murray. If a strong favourite shows any indication that they might be struggling with injury and the markets have not yet reacted then I will instantly just lay the player for a bit to see what happens.
If the injury begins to affect their play then you can often gain a huge market swing as the markets will go into sheer panic when a player looks like he is struggling with injury. In the Andy Murray example, he began the match @ 1.10, drifted to 1.25 when looked like he was struggling a bit and then drifted out to 3.25 once it was clear he really did have an injury and everyone panicked!
If the favourite does go on to win the set or break point you wont lose that many ticks by exiting the trade at this point since this is what everyone expects so you should not be afraid of taking them on. You have a small amount to lose but a huge amount to gain if you pull it off.
Just remember, when trading Tennis you aren’t even necessarily looking for the favourite to lose the match, you just want them to have a bit of a struggle on the way to create the market volatility we can profit from. If you look out for the signs above you will definitely find them!
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