MARKET MOVEMENT ON THE SAND

 

In the past four seasons I have written two articles on price movement in the horse racing betting market. In this piece I am going to revisit this theme.

 

Being able to predict price movement is a strategy that potentially would make you rich very quickly. For example let me create a hypothetical scenario whereby you are able to predict 5 horses each day that would ALWAYS contract (shorten) in price. Let us also assume for simplicity of this example that they were all originally priced 7/1 (8.0) and shortened into 4/1 (5.0) at the off. There are various ways you may profit from this amazing ability to see into the future.

 

1. One option is to simply back all horses at 7/1 and you would make a profit in the long term. On average 4/1 shots win between 17 and 18% of the time so if you were getting 7/1 about a 4/1 shot you would make a return on investment (ROI) to SP of around 40%over the longer term. Of course backing BSP would almost certainly improve these figures. One thing to be aware here is that you could have some long losing runs despite the long term outlook being extremely favourable.

 

2. Create effectively a free bet by betting on the exchanges - back at 8.0 and lay at 5.0 for effectively a free bet at 3/1. With this bet there is no risk - no losing runs as you either break even if the horse loses or effectively have a 3/1 winner if the horse wins (minus commission).

 

3. Traders potentially could use a third option by looking to lock in a profit each race. To explain the method it is easier to use decimal odds for this. They could potentially stake 1 point at the decimal odds of 8.0 To work out the lay stake required you would divide your backing price by your laying price – in this case 8/5 which equates to 1.6. Your lay stake then becomes 1.6. The locked in profit is the difference between both stakes (1.6 – 1) or 0.6. Using this method the result of the race is irrelevant you simply make a small profit on each race.

 

Therefore having that ‘gift’ to accurately predict the movement of 5 horses per day would essentially be a license to print money. If only betting was that simple …… For the rest of this article I am going to see whether it is possible to improve our chances of predicting price movement from the opening show price (normally about 10 minutes before the start) and the final starting price.

 

I have looked at data going back to 2016 for UK racing and not surprisingly given my previous sentence, my first port of call was to compare the opening show price with the SP (Industry SP) price. Now prices can do three things – shorten, stay the same or drift out (lengthen). Let us compare the percentage of runners that shorten, stay the same price and lengthen in the three main types of racing namely flat (turf), the all weather and National Hunt.

 

Race type	Price Shortens (% of runners)	Same Price (% of runners)	Price Lengthens (% of runners)
Flat turf	36.29	31.01	32.70
Flat All Weather	34.38	31.53	34.09
National Hunt	35.85	30.96	33.18

 

As you might have expected there are more horses that shorten in price than drift and lengthen in price. Indeed if you focus on the front end of the market the percentage for horses that shorten in price gets higher. This makes sense as the bookmakers are trying to improve their profit margins. The data for the all weather is the most ‘level’ in terms of percentages and hence I would like to explore all weather racing in more detail in relation to market movement. My angle is to look at trainers to see if there are any patterns, stats or clues that have the potential to help us with our price movement predictions. For example are there trainers whose horses shorten rather than drift or vice versa. Can we find a trainer where their horses always shorten by three points!!!! Just kidding.

 

OK so let us look at the top 30 trainers in terms of all weather runners since 2016 and compare their percentages:

 

Trainer	All runs	Price Shortens (% of runners)	Same Price (% of runners)	Price Lengthens (% of runners)
Appleby, M	1648	36.41	28.82	34.77
Johnston, M	1499	35.16	27.69	37.16
Fahey, R A	1291	35.94	24.32	39.74
Hannon R Jnr	1264	39.40	28.48	32.12
Evans, P D	1205	31.54	30.71	37.76
Carroll, A W	1066	29.64	34.80	35.55
O’ Meara, D	1021	31.64	27.42	40.94
Osborne, J A	911	33.15	31.06	35.78
Botti, M	880	40.00	29.77	30.23
Loughnane, D	838	35.68	31.50	32.82
Balding, A M	804	33.46	27.99	38.56
Simcock, D M	783	31.67	28.22	40.10
Gosden, J H M	764	37.43	21.34	41.23
Ivory, D K	752	36.30	33.24	30.45
Shaw, D	741	30.36	32.66	36.98
Hughes, Richard	721	34.40	30.65	34.95
Williams, S C	713	40.95	31.56	27.49
Watson, Archie	703	40.68	21.62	37.70
Butler, John	677	28.66	27.77	43.57
Dixon, Scott	674	31.90	34.42	33.68
McEntee, P S	663	31.07	35.29	33.63
Burke, K R	660	39.70	26.36	33.94
Dalgleish, Keith	648	35.49	27.93	36.57
Palmer, Hugo	607	41.68	22.73	35.58
Varian, Roger	586	42.32	22.70	34.98
Dunlop, E A L	581	34.25	32.87	32.87
Prescott, Sir M	568	27.29	29.93	42.78
Attwater, M J	567	30.16	43.21	26.63
Easterby, M W	562	39.68	27.40	32.92
Moore, G L	560	35.18	33.57	31.25

 

The first thing that stands out for me is Sir Mark Prescott’s figures as considerably more of his horses drift out in price than come in (42.78% v 27.29%). Interestingly you would have made a small profit backing Prescott drifters (around 10% using Betfair SP if simply backing every qualifier). These results would have been improved further by not backing outsiders (horses priced 22/1 or bigger) as they provided 57 losers from 57 runners. Of course trying to use any strategy that involves using Opening odds and comparing them to SP odds is potentially difficult to do as we never know the final SP odds. However, we can have a pretty good idea if we can bet live and late. Let us assume that you have pinpointed a Prescott horse (or indeed any horse) that you think is going to lengthen in price. It makes sense to have at least three ‘windows’ open on your computer – the live odds from a major bookmakers, the Betfair screen, and live race pictures. Doing that will make this type of idea possible to implement. The opening odds are easy to check; you may want to have another window open with another bookmaker’s odds just to double check prices. So you have your opening odds ……… depending on your approach you may simply wait and back the horse should it drifts. If it drifts then you can bet the horse as late as possible on Betfair by keeping an eye on the live feed, or back it at Betfair SP just before the off. The better method however is almost certainly the third method/option I mentioned at the start of this article – creating a back and lay scenario that locks in a profit regardless of result. This time though you are laying first and backing second. If you were doing this I would suggest you use trading software where you can simply press a button to ‘green up’. Greening up simply means have a positive return on either outcome as in method 3. Alternatively have an arbing calculator on screen to do that for you.

 

Of course any strategy involving predicting price movement has its risks – the price could move in the opposite direction to the one you had expected giving you a potential negative scenario.

 

Going back to Prescott - even his shorter priced runners do buck the overall trend. All horses for all trainers that opened 4.0 or shorter during the period of study shortened 42% of the time while 36.5% of them drifted; for Prescott 36% shortened and 43.5% drifted. Interestingly of the 50 Prescott horses that drifted and still started clear favourite, they went onto win 50% of the time (25 wins) – simply spotting these opportunities and backing them as late as possible would have potentially created a profitable scenario. In this instance, using method one (simply backing them at Betfair SP) would have secured a profit of 32p for every £1 staked.

 

However, from a personal perspective, and I am guessing most traders would agree, I would prefer a back to lay strategy rather than a lay to back strategy. Therefore it is worth looking for trainers whose horses shorten more often than they drift. Below is a table of trainers whose horses shorten more than the average. I have created a ‘shorten to drift’ ratio (SDR) by dividing their percentage of horses that shorten by their percentage of horses that drift or lengthen in price. For trainers to qualify they must have had at least 130 runners in total over the four years:

 

Trainer	Runners	SDR	Trainer	Runners	SDR
Bowring, S R	169	2.23	Tate, James	518	1.51
Fanshawe, J R	460	1.89	Brisland, Robyn	259	1.49
Hughes, Jo	225	1.86	Williams, S C	713	1.49
Main, Mrs H S	172	1.80	Eustace, J M P	135	1.47
Jarvis, W	145	1.74	Hollinshead, Steph	169	1.43
Brisbourne, W M	196	1.73	Pears, Ollie	200	1.42
Waggott, Miss T	161	1.69	Bethell, J D	217	1.41
Whillans, A C	188	1.68	Smith, C	125	1.41
Wall, C F	191	1.67	Teal, R A	189	1.40
Dascombe, Tom	522	1.67	Smart, B	240	1.40
Hedger, P R	153	1.57	Phelan, P M	224	1.38
Burrows, Owen	146	1.56	Barron, T D	409	1.38
Ryan, J	382	1.53	Madgwick, M	147	1.38
Suroor, Saeed Bin	405	1.52	Lanigan, D R	168	1.38
Noseda, J	156	1.51	Perrett, Mrs A J	334	1.37

 

Bowring tops the list in terms of SDR with horses shortening in price more than twice as often as those that drift. Of the 78 runners that have shortened though only 9 went onto win so if you had pinpointed one of his runners you thought would shorten in price, then the trading option is by far the best approach. Interestingly one of his seasoned campaigners – a horse called Ace Master has shortened in price 10 times in 12 runs (1 time it drifted, the other it remained the same price). Indeed looking back to all his runs (flat and aw) going back to 2012 Ace Master’s price has shortened 40 times, stayed the same 16 times and drifted just 11.

 

Newmarket trainer James Fanshawe also has a high SDR at 1.89 and has sent out a decent number of runners on the all weather (460) in the last four seasons. What I found most interesting was that there seems to be a correlation with the percentage of horses that shorten in price (opening odds to SP) with the time taken to travel to the relevant course. The following table hopefully will make this clearer:

 

Course	Time taken to travel to course	Total Runners	Runners that shorten in price	Price Shortens (% of runners)
Newcastle	4 h 40 min	58	35	60.34
Wolverhampton	2 h 45 min	54	32	59.26
Kempton	2h	210	95	45.24
Lingfield	1 h 50 min	77	33	42.86
Chelmsford	1h	59	26	44.07

 

It seems that the further Fanshawe’s horses travel the more likely they are to shorten in price. For the record the travelling times are an estimate based on the route, distance travelled and the fact they will be travelling in a horsebox / lorry. However, I think they are pretty accurate. The trip to Newcastle is essentially a 500 mile round trip and I am wondering if punters have picked up on this and hence are more likely to back the horse as not only have they noted the long trip, but it comes from a decent Newmarket stable as well. The Wolverhampton trip is not as long but it still around 120 – 135 miles depending on the route taken. With 59 and 60% of his runners shortening in price at the two venues this may be an angle to try and take advantage of.

 

Tom Dascombe is another trainer with a decent SDR at 1.67 and he too has run a decent number of horses on the all weather in the last four years (522).  44.4% of his horses have shortened in price and this figure increases to 53.5% (54 horses from 101 runners) when focusing on horses whose price is 3/1 or shorter at opening show. If we focus on solely the regular jockey Richard Kingscott on these horses priced 3/1 or shorter at opening show, the percentage figure increases further to 57.9% (44 horses from 76 runners).

 

Of course many punters want a relatively simple method to follow in the hope of making money. The final set of data I will share with you is of the profitable trainers on the all weather when their horses have been backed in from their opening show price. With the price falling, one would expect the value to be draining away and profits difficult to achieve, but some trainers have still managed to achieve a profit at Betfair SP with such runners. Here is a table with the relevant facts and figures: 

 

Trainer	runners	Wins	SR %	BSP Profit	ROI %	A/E
Appleby, C	102	41	40.2	+ £24.03	+ 23.56	1.00
Gosden, J H M	286	103	36.01	+ £39.54	+ 13.82	1.04
Suroor, Saeed Bin	188	67	35.64	+ £7.54	+4.01	1.01
Haggas, W J	229	77	33.62	+ 15.71	+ 6.86	1.04
Palmer, Hugo	253	73	28.85	+ £57.37	+ 22.67	1.12
Santos, Jose	32	9	28.13	+ £11.73	+ 36.66	1.61
Watson, Archie	286	68	23.78	+ £21.51	+ 7.52	0.96
Crisford, Simon	165	38	23.03	+ £9.57	+ 5.80	0.89
Margarson, G G	74	17	22.97	+ £35.86	+ 48.46	1.29
Tate, James	219	49	22.37	+ £13.49	+ 6.16	1.02
Mohammed, Ismail	56	12	21.43	+ £37.50	+ 66.97	1.20

 

All the trainers have decent strike rates (all above 20%), and on the whole good A/E values too. It will be interesting to see if these trainers continue to be as successful / profitable with horses that shorten in price over the coming months and years.

 

This is an area of research that really interests me and although I have only scratched the surface I hope that it has given you food for thought. I will continue to crunch the numbers and will feedback anything I find out in the near future.

 

David Renham  

 

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This article was written by Dave but first appeared on the interesting OnCourseProfits.com website / magazine.