When A Good Price May Not Be A Good Bet

What does a late drift in price mean? How should we account for it in pre-race analysis? Today on the blog Declan Meagher tells us.

HorseRacing

There was a time before the arrival of Betfair, when if you priced up a race, and 6/1 was available on a horse you thought should be 4/1, you had a bet. Providing you had put in the effort, and analysed the race thoroughly, you should make money taking the 6/1 without too much further thought. While you can still make money this way I believe you need to ask further questions before you strike that bet.

In the pre Betfair days you were mostly just pitting your opinion against a sole odds compiler, who may, or may not have consulted his colleagues on the price. He likely priced up many races that day, and is unlikely to have given the same time to the race in question as you have. That will still be the case these days, but now the bookies also have the Betfair market to guide them, and thus quickly correct any ricks.

The Betfair market at the off is the collective opinion of some very shrewd people, and some not so shrewd, but overall it’s a very good guide to a horses chances. It’s my opinion that, if in the minutes before a race, you think a horse is a good price and that the market has it wrong, you need to know why it’s wrong before you strike a wager.

Too Big A Price?

You hear the line ‘it’s too big a price now’ many times from pundits on TV, and I’ve said it myself, about a horse that took a drift in the market. I think if you weren’t going to back it before the drift, you shouldn’t back it after the drift, unless you're confident you know the reason why it drifted, and have accounted for it in your prices.

The market near the off has some significant sums of money floating around and won’t suddenly move without good reason, if you don’t know the reason then just accept someone knows something you don’t know, and keep your money in your pocket. This won’t always be the case and there are some drifts and gambles for no reason, other than the sheep effect, but if you can’t tell which is which then you’re only guessing.

An Example

Say I made a horse a 2/1 shot and it was 3/1 thirty minutes before the race. I would back it at 3/1, but let’s say I hadn’t had my bet yet, and it drifts to 9/2. I would still back it under most circumstances, as I can account for the new information by also moving my 2/1 estimate out to 3/1.

The 9/2 is still an attractive price. If however I made the same horse a 3/1 shot and he drifted to 6/1, I won’t be backing it. Thirty minutes before the race I agreed with the market on the horses chances, and now it’s doubled in price, unless I know why this happened I can’t justify a bet.

Who's Right? Who's Wrong?

It’s not just drifters that you need to ask ‘why I’m right and the market is wrong’, you should do it with every bet. If you price up a race and find a few horses that the market has at bigger, don’t blindly back them, without at least checking to see if you missed a piece of information that could account for the difference. Could you have misinterpreted the horses form? Do you tend to overrate that type of horse? Always look for flaws in your prices before committing to a bet.

The best bets will be those that you have a very good reason for your opinion - why you’re right and the market is wrong. Maybe you’ve an angle based on your own form ratings or sectionals times that has proven to be profitable in the past. Perhaps you know the horse switching to soft ground for the first time, is very likely to go on it because of sire stats and you also noted it had a high knee action. If this is not reported by spotlight in the Racing Post or on the TV then the market will very unlikely have fully accounted for it.

These are just examples, there are many angles you could exploit and when you have a good one you’ll be able to answer the question ‘why I’m right and the market is wrong’ with enough conviction to get your wallet out and have that bet.

Follow Declan on Twitter: @declanmeagher76

And read more of his work at LearnBetWin.com

You must be logged in to post a comment! Sign up + or log in in the top right corner.

I don't disagree with anything you've said, but you've not really said enough to give the punter enough to go on in deciding whether to go ahead with their wager.
Horses can drift beyond lots of odds compilers' estimate of their true chances before the off for two reasons (or two sets of reasons): 1) there is something wrong with the horse that 'insiders' are aware of. Perhaps it is warming up for another race, perhaps it's carrying a knock, maybe the tactics will be different today. None of these amount to the horse being 'not off' (not trying) or connections illegally having bet against the horse. There have been cases of that sort of corruption, and many recreational punters think that horse racing in particular is a difficult punting medium because they are betting against people 'in the know', but (just to be clear) I am not saying that the first reason for the drift is because some are actually cheating.
Now for the second reason 2). This is that the price is moving out to beyond genuinely true value because of an information cascade. Traders on the exchange are following each other creating momentum and making for a really good opportunity for the price-taker.
The question for the punter is to distinguish the first reason (which is a no bet) from the second (which is a bigger bet).
There are no hard-and-fast ways of doing so that mean you will always avoid getting it wrong. But it helps to have created records of the pre-race price movement of different horses and of horses from different yards and where possible ownerships. There are yards where drifts are a surprisingly accurate prediction of a horse's chances and yards where they are even a mild negative indicator (these are usually bigger and widely followed e.g. Stoute, Gosden in certain types of handicap). There are also yards where the signals are mixed, where one can believe that connections are waiting for a better price on some occasions before putting the money down.
Having a well-worked-out strategy for betting on or laying price movements (not necessarily trading) is one of the best and easiest ways of profiting from racing. It's especially easy with e.g. 2yos, debutants, horses returning from a break, horses dropping to a previous winning mark, horses dropping in grade and horses changing ownership. You need a statistically well-grounded and tested edge, which can be difficult to assess because of a lack of data.