As tonight's Duke/St. John's game shows, the books do occasionally set bad lines. I've been thinking about this topic framed in terms of line movement. What causes the line move and, more importantly, how does it affect the expected value of both sides?
As I wrote yesterday, I've yet to be convinced that value does not exist on sides with reverse line movement. That seems like an odd null hypothesis at first glance. As I've mentioned previously, my H0 is mainly anecdotal with some small sample empirical evidence thrown in. Most other gamblers I think take the opposite null hypothesis, which makes sense without taking the book's logic into account. If you are betting on a dog, would you rather have +7 or +6.5, knowing that your EV falls by a certain amount by taking the 6.5?
Let's take yesterday's WVU-Notre Dame line as an example. The line opened Tuesday night at 8.5 and closed at 9.5. Without thinking too much about it, you obviously would have rather had WVU -8.5. The more important question, particularly if you are stuck at work all day while the line moves, is whether there is still value at 9.5, not whether you lost some EV in the move (which you obviously did). Using the half point calculator, a true line of -8.5 +100 works out to -9.5 +118.2. From that, you can infer that you are losing 4.18% in probability by taking the line at 9.5. That calculation also implies that you needed to have a >55% chance of that line hitting at 8.5.
So, is there a >55% chance of WVU covering at 8.5? I acknowldege that contrarians are working within a tight margin, but I think, because of the line movement, the margin is a bit looser in this case. The "public" was backing Notre Dame yesterday at a 63.13% clip (from close at Wagerline). Why would the books move the line, exposing themselves to 4.18% chance of a middle? I think the answer has to be they realized an error in the line and WVU was overvalued at 8.5. That is, there was a significantly greater than 50% chance that WVU covers 8.5, and sharps knew it and hammered the line, facilitating the move to 9.5. Even if big money was coming in, if the books were attracting equal action from sharps (thereby validating their line), they never would have moved it, no matter what the "public" was on.
Here is some math to back me up (all at -110 juice for the book). I'm going to go through the first example spelling things out, from there you should pick it up. As you look through the numbers, ask yourself if you were the bookmaker, would you move the line to change your EV or variance?
Example 1
Probabilities held constant at 60% chance WVU covers at -8.5 and a 40% chance that Notre Dame covers at +8.5
80% of the money is coming in on WVU
EV = .6 (-800+220) + .4 (880-200)
= .6 (-580) + .4 (680)
= -76
70% of the money is coming in on WVU
EV = .6 (-370) + .4 (470) = -34
60% of the money is coming in on WVU
EV = .6 (-160) + .4 (260) = +8
I could solve an equation for percentage of money that needs to be wagered on WVU for the books to break even, but I'm lazy and it's fairly obvious that the number is slightly above 60%.
Example 2
WVU is attracting a constant 70% of the money and the probabilities of a WVU cover vary
WVU covers 70% of the time
EV = .7 (-370) + .3 (470) = -118
WVU covers 65% of the time
EV = .65 (-370) + .35 (470) = -76
WVU covers 60% of the time
EV = .6 (-370) + .4 (470) = -34
WVU covers 55% of the time
EV = .55 (-370) + .45 (470) = +8
Clearly, if the books are taking a ton of money on WVU, they are at risk of taking loss. WVU needs to cover a little under 60% of the time for the books to take wash here.
Example 3
WVU is attracting a constant 60% of the money and the probabilities of a WVU cover vary
WVU covers 70% of the time
EV = .7 (-160) + .3 (260) = -34
WVU covers 65% of the time
EV = .65 (-160) + .35 (260) = -13
WVU covers 60% of the time
EV = .6 (-160) + .4 (260) = +8
WVU covers 55% of the time
EV = .55 (-160) + .45 (260) = +29
I have no idea how much risk the books tolerate. But I think it is pretty clear looking through these examples that action doesn't have to be all that one sided if the probabilities aren't even. So, why would a book move a line by a point if they weren't uncomfortable with the risk? And inherently, will there still be value in the new line? I'll leave the math to you, but it obviously depends on how one-sided the action was. Remember, for there to be value (without considering juice), the probability for WVU to cover at 8.5 has to be greater than 54.18%. Overall, I think when the line moves more than a point, it is a signal that value remains on the contrarian side.
Finally, how bad did the books screw up with their Duke/SJU line given this analysis? The books opened themselves up to a huge middle opportunity. There must have been a ton of action on Duke and they realized the Duke was probably going to cover.
Showing posts with label reverse line movement. Show all posts
Showing posts with label reverse line movement. Show all posts
Sportsbook Infallibility and Line Movement
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Labels:
contrarianism,
fiscal responsibility,
reverse line movement
How Does Frank Choose Sides?
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Labels:
errata,
getting started,
i'm a square,
leans,
reverse line movement
Every contrarian has their own style of finding the sides to play. I'm going to show you mine, using tonight as an example.
The first place I look is Wagerline. I go there and write down every game where the underdog is getting less than 40% of the action, usually. For nights with big cards, like tonight, I'll usually stop after 37%. I'll also add favorites receiving less than 50%. Next to each of these games, I'll add a 'W' next to the game. I'll also check the line movement throughout the day. For games with reverse line movement, I'll put an 'L' next to the game and for forward, an 'X' is placed.
Next, I visit Carib, Sportsbook, SportsInvestments Insights, and SIA to look at their consensus numbers. I follow a similar pattern to Wagerline and place a 'C', a 'B', a check, and an 'A' next to the games that qualify.
Finally, I'll head over to KenPom and see how the line compares to the Pomeroy prediction. Games where the prediction shows the lean beating the spread get a 'K', while an 'H' marks games where the prediction is not in my favor.
Of course, there needs to be a way to differentiate between a side that is receiving 35% of the action and sides that are getting 15%. I do this by circling or squaring the letters or leaving them alone according to the key below. There are different levels for different sites because some have more squares than others. For example, SIA is the squarest book around, so their thresholds are lower than the rest.
Lastly, I integrate all of this information in my head and come up with the unit size that I want to play a particular side. Below, tonight's 2x plays are in yellow and the 3x plays are in orange.
I do all of this in a notebook every night. It may not be the most efficient use of my time, but I feel it allows me to see the most information and make better decisions.
The first place I look is Wagerline. I go there and write down every game where the underdog is getting less than 40% of the action, usually. For nights with big cards, like tonight, I'll usually stop after 37%. I'll also add favorites receiving less than 50%. Next to each of these games, I'll add a 'W' next to the game. I'll also check the line movement throughout the day. For games with reverse line movement, I'll put an 'L' next to the game and for forward, an 'X' is placed.
Next, I visit Carib, Sportsbook, Sports
Finally, I'll head over to KenPom and see how the line compares to the Pomeroy prediction. Games where the prediction shows the lean beating the spread get a 'K', while an 'H' marks games where the prediction is not in my favor.
Of course, there needs to be a way to differentiate between a side that is receiving 35% of the action and sides that are getting 15%. I do this by circling or squaring the letters or leaving them alone according to the key below. There are different levels for different sites because some have more squares than others. For example, SIA is the squarest book around, so their thresholds are lower than the rest.
Lastly, I integrate all of this information in my head and come up with the unit size that I want to play a particular side. Below, tonight's 2x plays are in yellow and the 3x plays are in orange.
I do all of this in a notebook every night. It may not be the most efficient use of my time, but I feel it allows me to see the most information and make better decisions.
2008 NFL Line Movement
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Labels:
contrarianism,
fiscal responsibility,
reverse line movement
As you can see to the right, I was absolute chicken garbage wagering on the NFL this year. Which is par for the course. I am always straight up awful the first third of the season. It didn't help this year that the second third of the season was as square as it comes. Just for grins, here are the results for all of my leans this year.
Like I said, chicken garbage. If you recall, I looked at college football line movement a few weeks ago. When looking at the graph below, remember that it is tabulated using only my Tuesday leans from the year. Again, though, I think this is the relevant sample that, at least, I should be looking at. At first glance, the hypothesis that reverse (negative) line movement is good for the contrarian gambler looks decent. When interpreting the results, you should compare what my overall record was (terrible) compared to the winning percentage of lines with reverse movement (marginal).
Unlike college football, in the NFL, the magnitude of the reverse movement doesn't appear to be all that significant.
Also, in the NFL, there are far less lines that move throughout the week than there are in college football, which shouldn't be much of a surprise since teams are much more evenly matched and more about each team is known.
As always, feel free to tell me what a retard I am in the comments.
Like I said, chicken garbage. If you recall, I looked at college football line movement a few weeks ago. When looking at the graph below, remember that it is tabulated using only my Tuesday leans from the year. Again, though, I think this is the relevant sample that, at least, I should be looking at. At first glance, the hypothesis that reverse (negative) line movement is good for the contrarian gambler looks decent. When interpreting the results, you should compare what my overall record was (terrible) compared to the winning percentage of lines with reverse movement (marginal).
Unlike college football, in the NFL, the magnitude of the reverse movement doesn't appear to be all that significant.
Also, in the NFL, there are far less lines that move throughout the week than there are in college football, which shouldn't be much of a surprise since teams are much more evenly matched and more about each team is known.
As always, feel free to tell me what a retard I am in the comments.
A Quick Note
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Labels:
reverse line movement
The Motor City is annoying to listen to, so I crunched the numbers for the first sixteen weeks of the NFL season. First point is that I was functionally retarded betting on the NFL this season (and last season, too). Secondly, the same pattern as below occurs, but it is a bit more masked. I'll explain more after the Rose Bowl, but figured I would throw this up in case anyone was curious.
NCAAF Line Movement Revisited
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Labels:
contrarianism,
fiscal responsibility,
reverse line movement
After Moneyline and I had our discussion about line movement this week, I thought I would update the NCAA statistics. I plan on putting the NFL line movement and contrarian stats together after I get back from the Rose Bowl. Here is the first table:
Recall, that these stats have been compiled from my list of Tuesday leans (Early) and what line the games closed at (Close). The blue indicates the record for the games I actually played.
Moneyline and Vegas have been hinting for a while that line movement scares them away from plays. An initial glance at the table seems to indicate that they are correct in their assessment. However, I remain convinced that reverse (or negative above) line movement remains a solid indicator that a wager should be made.
If the negative line movement was 0.5 or 1 points, then yes, playing those games during the 2008 college football season was a losing proposition (See how I subtly reminded the readers of the sample? That's how you get a Lemmy!). Those games were 29-39 at close. However, if you used games that moved 1.5 points or more, suddenly reverse line movement was a great way of pointing you in the right direction.
Obviously, more extensive research needs to be conducted. I'm particularly interested to see if the NFL, where lines move less often and at a smaller magnitude, shows a similar pattern. Regardless, this is one sport for one season. However, my empirical evidence over the last three years of gambling makes me think that these statistics will be replicated.
Feel free to tell me where I screwed up in the comments.
EDIT: I figured I would throw these together just for completeness. This also seems to follow what I had already thought about positive (or forward) line movement:
It doesn't look there is much +EV for games where the line moves in a contrarian's favor.
Recall, that these stats have been compiled from my list of Tuesday leans (Early) and what line the games closed at (Close). The blue indicates the record for the games I actually played.
Moneyline and Vegas have been hinting for a while that line movement scares them away from plays. An initial glance at the table seems to indicate that they are correct in their assessment. However, I remain convinced that reverse (or negative above) line movement remains a solid indicator that a wager should be made.
If the negative line movement was 0.5 or 1 points, then yes, playing those games during the 2008 college football season was a losing proposition (See how I subtly reminded the readers of the sample? That's how you get a Lemmy!). Those games were 29-39 at close. However, if you used games that moved 1.5 points or more, suddenly reverse line movement was a great way of pointing you in the right direction.
Obviously, more extensive research needs to be conducted. I'm particularly interested to see if the NFL, where lines move less often and at a smaller magnitude, shows a similar pattern. Regardless, this is one sport for one season. However, my empirical evidence over the last three years of gambling makes me think that these statistics will be replicated.
Feel free to tell me where I screwed up in the comments.
EDIT: I figured I would throw these together just for completeness. This also seems to follow what I had already thought about positive (or forward) line movement:
It doesn't look there is much +EV for games where the line moves in a contrarian's favor.
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