Has industry evolution led to an over reliance on AHC markets?

Has industry evolution led to an over reliance on AHC markets?

Wednesday, May 23, 2018 Posted by Joseph Streeter
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Abelson Info assesses the consequences of neglecting physical traders

The expeditious rise of automated trading solutions is in no small part down to the exponential speed of change that the industry has undertaken. However, is there a cost to the neglecting of physical traders?

Whereas operators formerly employed various traders to specialise on each league and sport, it’s now the case that many firms are able to minimise the human cost of these traders by utilising automated data feeds, as well as looking towards indications from the markets offered by the Asian facing operators.

Nonetheless, due to the delicacy of the market, it’s a regular occurrence that Asian handicap markets are formed at a slow pace and subsequently operators are offering odds solely based on automated data systems, leaving them vulnerable to potentially lesser analysed pricing.

Main match markets have a significant impact on derivative markets, which could lead to inaccuracy trickling down throughout various markets; this something that’s enhanced as many firms that do still utilise traders only do so for high paced in-play markets, as opposed to the standard pre match markets.  

When asked how easy it is to pick out where operators are simply using an automated data supplier, with a greater potential for inaccurate prices, Abelson Info Head of Compilation Jeevan Jeyaratnam told TotallyGaming.com: “Most firms will be using automated data suppliers in some way or another, but as you’d expect, the quality of such provision varies.

“Indeed, in this incestuous arrangement even the third-parties are using supplier feeds, for example from Asian facing sportsbooks. Astute punters will have their own tissue prices, if they are of value they will quickly identify discrepancies between their prices and some of the early prices available in the market.”

He added: “Even those without ratings systems can easily produce a tissue that has more credibility than some of the early lines from third-party suppliers. As we’ll discuss, the final resting point, and all the movement between, is dominated by Asian market trading. Much of the huge volumes of money in that market is derived from professional syndicates, treating the markets as if they were trading stocks and shares.

“As a result, it is possible to determine trends from analysing past prices. If we think of the final Asian Handicap (AHC) price as a football SP, then we can use these SPs to give a fairly robust idea of prices for the next set of games in a competition.”

Further detailing how data points work and pointing to examples from lesser viewed football of where it can be wrong, Jeyaratnam continued: “These syndicates use a huge number of data points to determine their ratings, many of which aren’t always evident from a simple glance at a league table or form guide.

“For example, Rochdale have spent much of the season in the basement of League One, yet their football SP has consistently represented that of a team in much better form.

“Eventually the improved form, evident in the deeper statistical analysis, has begun to shine through and they have strung together a decent set of results together to lift themselves out of the relegation zone.

Naturally, the bigger discrepancies occur the further down the football pyramid we drop. The early prices in the lower Scottish leagues are often some way from where they should be.

“International friendlies are another area of weakness; there often seems to be little care or thought in some of the compiling, with no appreciation of squad strength or motivation. Denmark were short vs Panama in March. They ended up going off 1.28 and that would have been bigger had their plane not been delayed, affecting their preparation time.

“Other strange quotes that week included Scotland who, having named a very youthful and inexperienced squad, were quoted at 1.83 for their game with Costa Rica; they ended up at 2.22. Mexico were an unbelievable 2.30 early doors against Iceland. By kick-off this was 1.62; it seemed that the early lines failed to take into account that Mexico play the majority of their games in the USA, and that it would be a very partisan crowd in California.”

Jeyaratnam concluded: “Firms relying on these prices can end up with unsightly books come kick-off, and all of it is avoidable. Unfortunately, the prices are lent credence because of the way the industry copies and validates itself. The original inaccurate pricing may come from a single source, but that source could be providing prices to a large number of sportsbooks.

“If several books have the same prices, then other firms, perhaps using scraping techniques, pick up and acquire the prices. This continues until the AHC prices are posted, whereby everyone immediately falls in line.”

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