The RWC 2011 is almost here after 4 years of waiting, 4 years that hasn't really seen any dramatic changes in the world of rugby union. Nonetheless the RWC represents some great sport, which, after the precession that the pool stages usually are guarantees some tremendous excitement, drama and lots of nail biting tension which is certainly not for the faint hearted.
Yes rugby is sometimes regarded as a sport for the hardcore fans but the showpiece which is the world cup inevitably brings with it fans that would otherwise not even think of watching club rugby, this can only be a good thing for the sport and I am sure there may well be sports traders getting involved for the sole fact that is going to be on our screens for next few weeks. (This isn't something I would recommend as rugby is more difficult to trade than you may think) All this aside, I am a massive fan of rugby and would like to share my thoughts - trading wise, on what promises to be a "proper" spectacle.
The problem with trading international rugby, mainly the world cup is that there are many lesser nations taking part that are there to "unofficially" make up the numbers. This may sound a little harsh but you have to remember this is only the 7th RWC since it's inception in 1987. Only four countries have ever lifted the Webb Ellis trophy. Arguably, a more startling fact is that only 5 countries have ever competed in the final - The four winners, New Zealand, Australia, South Africa, England plus twice beaten finalists - France. These 5 countries between them have created somewhat of a 24 year monopoly on the international rugby scene.
To put this into perspective, the FIFA World Cup final has been contested by 6 completely different countries in the last 3 finals.
So, why is this a problem?? Well.... take the first game of this year’s tournament. World Cup hosts and odds on favourites for the title New Zealand kick off the action tomorrow morning against Tonga.
Now, Tonga are ranked 12th in the world on the official IRB world rankings and so are obviously nowhere near the worst team in a competition containing 20 nations. Tonga’s best ever performance was twice finishing 3rd in their 5 team pool and so have never gone beyond the pool stages.
I realise we are yet to get to the real hardcore trading discussion but in my opinion this is all very relevant if you are going to trade the RWC.
Back to trading....so what price New Zealand for this particular match?? 1.50....1.30....1.10 or even 1.05????
“Unbackable”....that’s the price of a New Zealand win, you cannot even get a price, 1.01 to lay. This goes a long way in illustrating my point that trading international rugby can sometimes present a problem, this isn't always the case as the 6 nations and tri-nations are very competitive but it certainly affects the early stages of the world cup.
This sadly will not be an isolated event as there will probably be around 5 or 6 “unbackable” favourites and countless 1.01 and 1.02 shots during the pool matches such is the gulf in class. What we as traders need to do, is try and spot other markets with trading potential and capitalise on this potential.
I am going to talk about some strategies that I think could prove most profitable during this tournament in my next post to avoid making this too long. I have covered the main areas of what to expect and really aimed this post at rugby trading newbies to give a general feel of the markets and why some of the prices we will encounter seem so lopsided.
Look out for my next post going up shortly.
Regards
Fluffnut
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