exchanges

Thursday, August 25, 2011

Effects the draw has on markets.

Just thought i would add a little note on the effects the champions league draw have had on some of the markets today.

I mentioned in a previous post some ideas that, if implemented in a proper and sensible manner could prove profitable even though a ball will not be kicked  for another 2-3 weeks.

Example:

I talked of the attractive price associated with Manchester City, which at the time of writing  was 23.00 to back on Betfair. I also stated that in my opinion a collapse of this price was inevitable. I accept that the group could have been a little easier but then it could also have been alot worse. The positive way in which they have started their domestic season has clearly helped matters but as far as i am concerned this was expected with the money they have at their dispossal and the quality they have bought in.

Manchester City's price is now available to lay at 16.0 which is a mildly lucrative collapse of 7.0. To expand on the opportunity this has created... A £100 back on City at 23.00 would enable either a £100 lay at 16.00 giving us a risk free position of +£700 on Man City winning the tournament (which you could lay off again further into the competition if you like) or we could lay £143.75 at the current 16.00 which would lock in £43.75 on every eventuality. Not bad considering we have not had to watch a single ball kicked to allow this trade.

Another couple of potential trades of note which i mentioned in the previous post are:

  • Inter milan - Backed @ 40.00, can now lay @ 34.00 which would create either +£600 on Inter winning or +£16.65 across the board. (based on £100 stakes)

  • Lyon - Backed @ 300.00, can now lay @ 200.00 which would create either a massive +£10,000 on Lyon winning or +£50.00 across the board. (based £100 stakes)

In the case of Lyon, liquidity would not allow you to execute this trade in a single order so you would need to drip feed the order into the market untill is has been completely matched. This would give you 2-3 weeks to complete the trade which in my opinion would be ample time as liquidity would increase the closer to the off we get.

In the time i have been writing this Manchester City's price has moved even further in our favour from a lay price of 16.00 to 15.5 which in the above examples would increase profit to £750.00 and £48.39 respectively.

These perfect trading opportunities present themselves more often than you may think, the key is spotting the potential in future markets and becoming comfortable with the variables that make these markets move a long time before the event goes live.

Good luck in your trading.

Regards
Fluffnut