How to trade Golf on the Smarkets Exchange

Trading golf on the Smarkets exchange is a good alternative to fixed odds betting. 

We can back our fancies in a golf tournament, or we can play bookmaker and place lay bets on players in various markets if we don't fancy them or think they’re underpriced. We can also look to use what's known as a back-to-lay golf trading strategy where we want to back a player or players before the event starts and then look to alter our position in running if our selection(s) are going well. We can take back our stake for a free bet or we can essentially turn the trade into a fixed odds bet if we plan ahead. Hedging is a two-part process. Many bettors or traders fall into the trap of thinking they’re giving up expected value (EV) by laying off their bet but let’s look at an example from a few years ago:

Note: To turn our outright bet into a fixed odds bet where we are looking for a small position, we are trading the market, but we will exit the bet at a predetermined price. 

Example: Jason Day has been underrated by the market at Torrey Pines for the Farmers Insurance Open. At opening odds of 50, given some indifferent form, we know that the market will correct itself if he fires a good round on day one given his course history here. His odds will steam towards his true odds. We can assess from experience that if Jason shoots a low round on Thursday and is sniffing the lead, he will move into odds of around 10 on the Smarkets exchange, which is around the fair or neutral EV price. 

If you were to equalise or "green up" (cashing out completely for an equally profitable book on all runners) by laying Jason Day for 5x your original stake you'd be getting a payout on your initial stake at odds of 5. Before making this bet, you’d estimated that this was likely to happen 33% of the time. This scenario equates mathematically to 65% expected value (or return on Investment) on average over the long term.

In this case you've already realised your equity with the big price move that’s paid out at odds of 5 and an EV of 65%. It doesn’t matter if he’s still a little bigger than his fair price. In any case the market often corrects itself meaning he is now at his fair or neutral EV price. The shorter a price gets the more the market tends to correct itself. Golf trading on the Smarkets exchange like this and closing out your position also lessens variance and volatility which is key for successful betting and trading over the long term. Strong Bankroll Management is vital. 

If trying a back-to-lay strategy like the example above, it’s essential to have an idea of how much the odds will move on a player dependent on their scoring and relative to their opening price. This comes with experience. Five years ago, a player that went low in round one like Jason might have come in from 50 to 10 as per the example but markets are ever evolving and nowadays the price move will be less dramatic given the inevitable strength in depth on the golf leaderboards. We might see just a 3x move in today’s game. 

If we prefer a more volatile, higher variance strategy for golf trading we can also look for swing trade type positions where we back a player pre-off and wait for the odds to get much lower later in the event before we trade out or sell our bet.