Tennis Hedging Strategy

A couple of times over the past month, I've had a look at trading tennis matches in-play.

These matches generally have high liquidity, but can be very jumpy. I made small gains, but it's clear to me that in order to trade such markets successfully it's essential to have live pictures, or at a minimum, live scores. Even the official 'live scores' direct from the tournament website can be some minutes behind the play, making it very difficult.

This led me to think about an article I'd read some time ago by Peter Webb of Bet Angel fame. I don't have it to hand but, from memory, he was suggesting that, irrespective of your opening position at the start of the match, you can place a closing trade which will have a high probability of being matched - as long as you are not greedy.

Again, relying on memory here, I think the figure he quoted was around 90%.

With that in mind, I did the following in the recent Pacific Life tournament....

At the start of the men's quarter finals, I placed an opening trade of £2.50 just before the start of each match. I then hedged each game looking for a profit after commission of 20%. I then carried all winnings and stakes forward to the respective semis and did the same again.

Actually, I missed one of the qtrs as it was on at 2am and I couldn't be bothered staying up. I missed another when Haas had a runny nose and pulled out giving Federer a bye into the semis. In those cases, I just carried the £2.50 on to the next match.

To cut a long story short, after the semis were complete, I'd made a 35% profit for little work on my part.

I now intend to do the same when the men reach the quarter final stage in the Sony Ericsson Open currently under way in Miami. I'll carry the profit and original stake over with a view to increasing my tennis bank in this manner from the original £10.