Southampton agree fee for tea lady
Quite a few jokes doing the rounds at the unprecedented sale of Southampton players which is attracting a lot of press. But inside the humour and horror (for Southampton fans) some serious lessons for traders. You can profit from the mayhem. But first, anecdotal reflection and another trading lesson.
In 2003 I sat in the Millenium stadium and crowed at how Southampton had finally made it. Seventh in the premier league, FA Cup final and a crop of talented youngsters. Little did I realise what I’d let myself in for! It was downhill all way from there. A few years later they were in administration as they slumped into the third tier of English football. But from there it was a rapid rise back to the top again.
Wind forward to the end of last season and a friend of mine said, ‘We’ve finally made it’. I recounted my horror story of 2003 and told them to await the inevitable bad news. Never did I quite expect what I have witnessed. There has been a lot of press surrounding this most unusual of situations and some interesting stats: –
From a practical trading perspective one of the many things I do in football markets is watch the promotion and relegation markets. I cover this in the course I run.
Promotion or title winning markets can be a little dull, but relegation markets can be great fun. Before the start of the new season I’m always watching the transfer markets.But essentially what I’m watching for is for big signings in or out of a club. The general rule of thumb you can use is the that big signings improve the clubs chance of winning a title or escaping relegation, while an exodus will increase the chances of a club visiting the bottom of the league.
It’s all relative though and just because your club has signed the next superstar, it wont count for much if your nearest competitors have also been getting the cheque book out. The top leagues in europe have really become a battle of the bank account rather than the one played out on the field.
Some seasons the transfer shenanigans are easier to spot than others. Liverpool losing Suarez inevitable would dent their ambitions for next year, so that put them up as a lay for the title this season. But the £75m received in return would have given them plenty of room to improve their side. Curiously they choose to do so by raiding the Southampton team, so that inevitably made Southampton a back for relegation at that point. I don’t think many could have predicted just how severe the exodus from Southampton would have been and, a bit like a dance floor at a nightclub, there comes a point at which it becomes harder to attract new comers if everybody is leaving the scene. Curiously Liverpool start the season at home to Southampton.
Southampton have come in from a 12.5 chance of relegation from the premier league at the end of last season to as low as 5.20. But they now have a bulging war chest of almost £100m to rebuild. Of course the question is will they use it? If they do they the odds should go back out again so laying on good transfer news is an option. If not, maybe they can pile that cash up in front of the goal!
Liverpool’s quest to build on last years fantastic season is being priced out of the equation at this stage. They have drifted from 3.50 to 13.50 in the premier league winner market, in the post Suarez era. Are they a one man team? If they pull in some decent results early in the season then expect their price to come in a fair bit and you can back to lay for a profit.
Trading these markets can be good fun and over the course of a season you can build up some decent positions. But just bear in mind you will only get paid out on the actual result occurring, so you could have to wait to till May for a payout. But that’s the beauty of trading, you can trade in and out many times over the season allowing you to free up your stake while leaving the profit in the market ready to payout at a later date. This way May could turn into your best month of the year!
Category: Football trading strategies
