Getting the Edge in Sports Futures Contracts
Contracts on sports teams making it to various stages of postseason play are a prime hunting ground for overlays at all points during the regular season. As the season progresses things will start to subtly change. The top teams will hit losing streaks and cellar teams will get better and start sneaking up in the standings. By paying attention to changing conditions you may be able to pick off offers that were left standing by other players and even the Market Makers who haven’t noticed the new threats that are emerging.
During the 2005 baseball season, the Los Angeles Angels had a commanding lead in the AL West throughout most of the early and middle season. The Oakland A’s (who spent the entire early season in the cellar) started putting together an incredible summer rally to steadily rise in the standings. This happened simultaneously as the Texas Rangers, the only team considered to be a threat to the Angels that season, dropped out of contention.
Nobody who lived outside of Oakland seemed to notice what was happening, as you could have gotten better than 3-1 odds at Tradesports on Oakland winning the AL West in late July - when they were only a few games back out of first place!
This was one of those jump off the page overlays. A team that is 4 games back with two months to go who is winning steadily and has 10 remaining games scheduled against the first place team when there is no other contender is much closer to even money in reality. Being able to buy them in the low 20’s is absurd, but that’s what happened.
Sure enough, by late August they were tied for first place.
If you care about the fact that this bet ended up losing you are missing the point entirely. That doesn’t matter at all. Only getting the best of it matters. This is why you take small position sizes. Keep getting the best of it and your account will make money. Don’t worry about individual results.
