Monday, 8 February 2010

The Superbowl - The case for not trading out.

For various reasons, I had not really got involved in trading NFL as much this season as I had hoped to although I more than made up for this on Sunday night. I have given myself a lot of criticism recently over my trading performance in Rugby League, but it would be very difficult for me to offer any criticism of my Superbowl trading.

Before the game, I held a very strong opinion that New Orleans would win the Superbowl. Their starting price in the 2.7s not only seemed generous to me but also seemed to be extraordinarily high for trading purposes although I was keen not to overcommit given that the market could collapse if Indy started quickly. So, I regularly fed £10 lays of Indy into the system until the point where I would reach my maximum liability.

In addition to this, I had placed a £50 lay on Peyton Manning as MVP. Now, of all sportspeople worldwide, I would assert that I believe Manning to be the best of the very best and believe that his work ethic and cerebral approach sets a superb example for all he acts as a role model for. However, I expected Manning and the Colts to under-perform. Manning is so great at processing information quickly that I considered the two week delay would be a disadvantage as the extra time to gameplan would not help the Colts as much as it would the Saints, whilst I also could not get away from Manning’s previous struggles in big games.

As it was, the Colts did get a flying start and at 10-0 up, could readily be laid at around 1.25 although my drip feed strategy ensured that my average laying odds were significantly higher than that! However, on account of my maximum loss, I opted not to invest in the Saints any further.

The turning point of the game though when Pierre Garcon dropped a regulation third down pass when Garcon had a lot of space ahead of him and could have turned the play into a big game. What happened next was the result of several unprecedented but courageous decisions which history will prove to be the correct calls but were decisions that I supported and even predicted!

The first was the decision to go for it on 4th and Goal from the 1 with two minutes to go in the first half. Not only was this the correct call, but in an ironic twist of fate, I believe the Saints’ failure turned out to be the best result. By backing the Colts up so much, they neutralised the Colts’ two minute offence which scored 14 points against Baltimore and 7 against New York. So, rather than losing the two minute game 7 – 3 or tying it 7 – 7 by getting the ball back and kicking a field goal, the Saints won this encounter 3 – 0 which really was an exceptional result.

The only issue in all this was the Colts’ decision to run on 3rd and 1 which was a huge error but even if the Colts had converted here, New Orleans’ decision to go for it would have still been the correct one and the failure would have rested upon the run D of the Saints.

And then there was the onside kick. The play that more than any other will define the coaching career of Sean Payton. However, this was not a gambling play but a carefully considered decision and one that had little downside. Given how Peyton Manning can tear a defence apart in the first drive of the second half, it was almost irrelevant whether he first fielded the ball on the Saints’ 40 or his own 20 whilst the chance of denying Manning an all important possession was one that could not be turned down.

After all that, there was never any doubt in my mind that the Saints would win and from a trading prospective, this was the ideal game to show how I wish to trade.

At this point, I could have locked into a nice profit and left the market happy and profitable. However, I didn’t. Until the Saints went two scores up, I considered the market to be out of line with the odds as I perceived them to be. Therefore, I didn’t trade out but rather sat on my position. Then, after the interception of Manning, I considered 1.02 and 1.03 to be a generous laying price and was able to equalise my book for a very nice profit of between £200 and £300.

That is how I perceive my “sports” trading should be. If I identify value, the key is not to achieve green but to rather profit from the investment. By all means, give away 2 or 3 ticks of value; especially when eliminating red but I should not look to green up simply for the sake of green. This is not like how I trade the Correct Score market on football where I take no view and therefore should always look primarily to achieve green but rather I should take advantage of any knowledge I have about the sport and remain true to my convictions. Once I do that, the profit should follow.

The irony in this is that I achieved this in a sport where my knowledge is substantially less than it is in Rugby League but what if that is not irony but the crux of the issue. Regular readers will be well aware of my tendency to be overly harsh on myself and people who know me on a more personal level will be well aware of my poor reaction to any type of “pressure”. Maybe, by advocating certain selections and by holding these views, I am in fact placing perceived pressure on myself to be correct, and therefore, as opposed to being able to sit back, I look for any possible method to justify my initial opinion.

Of course, that’s complete rubbish but that doesn’t mean it is not true but the real irony in all this is that when I advocate these selections, I am not advocating them with any planned trade out but rather doing so in a general sense so regardless of my Profit and Loss, the desire to be correct will emerge only from the end result of the game, further negating the need to trade out early.

And if a blog is designed to be used to allow you to develop trading strategies and to think through your approach, I consider that the above could be the epitome of what I want to achieve through the posts that make up my blog. Now, only if I can stick to it!

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