Why Monday’s evenings are great markets
Something snatched my curiosity many years ago about trading the evening racing during the summer.
Anomaly
It always seemed pretty anomalous to me, but I would always feel that I would do well on a Monday evening, But Tuesdays would often be terrible. The rest of the week would vary depending upon the type of races and courses where the evening racing was being held.
Closer examination showed that Windsor was producing consistently above average results. So I came up with the theory that it must be the type of customer at Windsor on Monday evening that was producing favourable characteristics. The meeting and its crowd must be producing a stronger market.
Pilgrimage to Windsor
A few years ago I swore blind that I would make the ‘pilgrimage’ to Windsor on Monday evening to find out if that was true. After numerous attempts I finally I managed to get to Windsor last Monday! I could finally see if the theory would match reality.
The first thing you notice about Windsor is it was very busy. It’s a busy area anyway, but the traffic into the racecourse was a bit of a nightmare. I tried to arrive in plenty of time for a walk around. But my miss-judged journey meant that I didn’t see the first race! If you are planning a visit, give yourself plenty of time. Upon arriving at Windsor there is plenty of parking and It was a short walk to the actual course itself. I did the same walk in London 2012 when I went to the rowing.
Once inside, you can see was pretty busy. Windsor would appear to attract a large crowd from a wide area. But being relatively close to the edge of London you’re probably pulling in traffic from there as well. Its regularity on Monday appears to have given it a favourable place in the social calendar.
The range of clients varies quite a bit, but there was a good mix. There was one guy, who was desperately trying to get to his mates while carrying two pints of beer very badly, I guess he may have had more than a couple already. Elsewhere we had champagne bars draped with well-dressed men courting well-dressed women. Owners, trainers, Children all join the mix and it had a very nice atmosphere. I can imagine it gets even busier when high-profile entertainers join the mix in the evening. The human league are due to appear there on 24th August, that should bring in some middle-aged punters to the mix, like myself 🙂
The bookmakers and exchanges
I paid to go in the club enclosure, which is near the finishing line, as that was the most expensive ticket I could buy, £25. This gave me access to all parts of the course and I utilised every aspect of course to get a good look at everybody that was there, the facilities and of course the bookmakers.
I resisted the temptation to get a selfie with either the jockey’s or some of the more famous bookmakers on-course and focused on getting a good understanding of what’s going on, having a good look at the course and enjoying myself.
The number of bookmakers that were there is pretty big. Much larger than the sort you see at Kempton on a Wednesday evening at the rest of the time of the year. They were doing some brisk business as well.
And therein lies some evidence of why this is a good trading meeting. Bookies were everywhere to be seen and the general public were more than happy to stick a few quid on. I couldn’t help but challenge a few punters on what they were doing taking such duff odds. But of course, they are not taking poor odds for the sake of it, they are not trying to win and they don’t really care. They are just having a decent night out. Slipping a tenner on the favourite is entertainment, not a profession. Multiply that by thousands and there is your betting market.
Margins
The significance of this is that the margins are huge for the bookies for this sort of entertainment. That’s fine, their expenses are pretty high and they are providing a service to the beer ladened punters. This is where betting started and deals with racecourses are how betting moved off course and into shops, then online.
I sort of imagined that it may die completely when the internet came. But convenience appears to be the dominating theme in the modern world. Having somebody on hand to deposit your money with, in the hope of a payoff, is tempting.
I took a picture of the 18:50, it was just a six runner market. But it returned a book of 115%. I had Bet Angel trading and collecting data for me automatically and it told me that at post time the market on Betfair was over-broke. It was trading at less than 100%. You could have backed every horse and won money. Try doing that at the racecourse and you would have lost 15% of your stake.
Hedging your risk
Now if you are taking money at 115% and can hedge it at 0% that’s a decent 15% margin for standing there taking money from the half sozzled punters. You can take on big odds and simply hedge part of all of your position immediately on an exchange.
And that’s exactly what a lot of bookies do! Behind the LCD board full of odds, is a bloke and a computer. Modern on course bookies don’t use their knowledge and that of the on course market. They simply take all the money and hedge any liability, if required. I say, if required, as if you are operating at 115% for a six runner, you may not have to hedge a thing!
The de-facto system for doing this comes from Racecourse technologies. You should note though that the majority of money that gets hedged, for commercial reasons, goes to Betdaq. Despite the fact it’s you and I taking the risk and setting prices on the exchange. Betfair ‘owns’ that information and sells and licenses access to it. However, careful observation at several points during the evening showed that bookmakers were using a variety of methods to hedge. Some were just using bog standard API software to hedge on Betfair.
So it’s obvious to see that some of that punter money is making it onto the exchange.
Summary
So there we have it. That anomaly on my P&L had been there since I started trading and I’d hazard a guess that my observational evidence backs up why. Windsor on a Monday evening will probably remain one of my highlights of the summer racing because of it.
I’d have to say, Windsor is a very pleasant meeting as well. If you fancy an evening out. Windsor is well worth it.
Category: Horse Racing, Trading strategies
