Money is not always worth following

A topic we’d like to discuss here on the BetPreviews.com Betting School is in the area of Market Moves. Earlier this week this columnist got a text from a former colleague, though not one from the betting industry, about whether or not it would be a profitable enterprise to start “following the money”, or in layman’s terms, to jump on selections that have been subjected to price cuts since there are clearly clever people out there that fancy the selection in question.

To illustrate one potential downside of this issue, we will recall a story of a punter from an East London shop who used to bet on race meetings back in the day when the SP was the only price that mattered and when hedging back liabilities on course was the done thing. This particular punter was a very big fish, and while he wasn’t particularly shrewd, the bookie in question couldn’t afford to take too many chances, since a bad run could wipe him out. One of the punter’s favourite bets was a morning yankee on horses priced between 5/1 and 25/1, and on a £500 yankee, such a bet could return massive numbers if the punter had a good day.

However since the betting was at SP, if the shop owner saw that his big fish got his first selection in, already he had to go into hedging mode. A 10/1 winner would have £30,000 running on, which would of course have to be laid off – back at a time when that was four or five times the average industrial wage. Of course since this was the old days, the horse couldn’t be hedged until opening show.  So if the selection to be hedged opened at 20/1 and the bookie wanted to bet £25,000 or so, you can imagine what would happen to that price.

Where the story gets amusing is that by the afternoon, our big stakes punter is now in the shop, watching his selections – and when he sees his 20/1 horse tumbling in price, he starts to think that he’s hit on a good one, and goes up to back it again, because “it’s fancied”. He ends up following his own money.

The moral of the story? If you’re going to follow price cuts, make sure you know WHY the price has been cut. Sometimes it’s good informed punters, but other times it’s just mug money running on, or simply a means to generate interest in a dead market for a bookie. Most of all, know this – the odds compiler knows why he/she is cutting the price, and with that information, they clearly feel that there is still margin in it for them at the new price. So unless you’re pretty sure that they’re wrong, for whatever reason, then market moves, while the must be respected, cannot just be blindly followed.

About Kevin Egan 130 Articles
Kevin Egan is one of Ireland's leading GAA tipsters. He has previously served as GAA odds compiler for a number of major bookmakers.

2 Comments on Money is not always worth following

  1. Hi Kevin,

    Good article. What do you think of following the early money on horse racing markets? Is there mileage in following those horses who are backed when the odds compilers put up their early prices in the morning?

    My logical is that the bookies have over-priced them and that pro punters/connections are backing them. Often you will see the continue the money to come for it even on the opening show.

    Anyway it would be good to get your thoughts on it?

    Rgds,

    Colin

    • Hi Colin,

      The thing about following money in the morning is that you need to know where it’s coming from. Sometimes it can be worth doing, but you have to remember that if I’m sitting in the trading room of a leading firm, I’m able to see whether or not the money has come from informed sources, or if it’s just large running on money from an each way yankee with two 10/1 winners on the cartoon racing.

      People do follow money, that much is certain, and to a degree, the logic is sound. Bookies aren’t cutting prices for no reason and at least you can be sure that you’re not backing a non-trier. However every time I place a bet, I like to know why I’m doing it – and the idea that somebody, somewhere thinks this horse is a good price, doesn’t quite cut it for me.

      Where I might make an exception is if you can find a bookie who hasn’t reacted quick enough. If the morning price of 10/1 has been backed into 6/1, 11/2 and 5/1 in most firms but one chain or independent is still laying the 10/1, then you probably are getting value. It’s rare you’ll manage that though.

      Thanks for coming back to me,

      Kevin

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