Trading the FA Cup
It’s the FA Cup third round this weekend and marks just over halfway point in the season.
Has the FA Cup lost it’s ‘magic’?
If you are talking about a smaller club meeting up with a goliath, then perhaps not. But it may be that the smaller club faces a diminished version of said goliath. As they say, Money talks and it doesn’t say much in the FA Cup, apart for smaller teams.
Win a game in the second round and you get prize money of £27k, third round £67k and it rises from there. If you are in the top two tiers of the football league in England and win in the semi-final or five rounds in the FA Cup and you finally reach the same amount of money that you get for playing a one premiership match.
Excluding all the other bonuses you would get at least £875k for a live TV match in the premier league. If you include prize money and a share of TV revenue the figure more than doubles the total for an average match.
But that spells opportunity if you know where to look for it.
Team news
Given that so much can be on the line for the big clubs, they will often put out weaker teams for cup matches. Rather than risk key players getting injured fielding a much-weakened team that should win against weaker opposition is a sensible move. If there is any doubt about whether a win is possible, then key players will start on the bench and only be called into action if needed. If it’s a much weaker team or if there is some fixture congestion or potential injury issues then you may see a significantly weaker starting line-up.
In 2016 I was watching Liverpool play in a match before their third-round fixture against Exeter. As the match was underway, something interesting happened. There were two forced substitutions in the match. I tweeted: –
My thought process was that with additional injuries Liverpool would have to change their team even more than expected. Liverpool were already suffering a number of injuries and intended to rest quite a few for this match, now they had to really serious think about whether playing in the third round of the FA Cup away at Exeter was really worth it. A Lay of Liverpool seemed like a low-risk proposition so I jumped into the market in the middle of the match before the FA Cup tie.
Quickly the market started discounting a lower chance of Liverpool winning the away match with Exeter and their price started drifting. At market open, Liverpool were at decimal odds of 1.30 to win, but the price drifted persistently to just short of 1.70 on the day of the match.
When the team-sheet was announced an hour before the start it featured only one player who had played more than four times for the first team. At that point, the market jumped again to trade at a high of 1.81 before settling at a slightly lower price at kick off. Liverpool went on to scrape a 2-2 draw.
‘Shock’ defeats
Looking for a ‘shock’ defeat is more a betting than a trading strategy, but something that can easy be worked into a trading strategy. You will already be looking for teams that are fielding weakened teams so that will help but you also need to look for teams that are low on confidence.
If a premier league team is playing away a lower division then if they are low on confidence, can’t score or can’t defend they there is potential for the home team to perform well. Ideally, the home team will be full of confidence, enough to give the match a real go and throw caution to the wind.
Another factor at the start of January is the transfer window. Teams unsettled by transfer news may be lower on confidence and are worth a second look for a ‘shock’.
Incentive to score
In a knock-out competition, there is a big incentive to score. If you are playing a weaker team, you want a quick goal to deflate your opponents and control the game. If a weaker team has taken the lead, then the stronger team will be expected to score to save face. If the match is a draw, then some teams may want to avoid a replay. If a team is losing late on they have little to lose by throwing everybody upfield in a last-ditch attempt to salvage something.
Obviously, this varies from match to match dependent on the specific circumstances but it is something to look out for. Last year the average time of the last goal was 71 minutes, that includes matches that ended 0-0. 60% of the time goals arrived in the final 15 minutes of the match. If you want another way of saying that, 60% of the time a goal arrived in the final 16% of available time left in the match.
If a team has an incentive to score, it’s worth trying a trade that will exploit that.
Hopefully, the FA Cup will provide a few opportunities this year.
Category: Football trading strategies, Trading strategies
