Valuation of soccer spread bets
Valuation of soccer spread bets
Simple statistical and probabilistic arguments are used to value the most commonly traded online soccer spread bets. Such markets typically operate dynamically during the course of a match and accurate valuations must, therefore, reflect the changing state of the match. Both goals and corners are assumed to evolve as Poisson processes with constant means. Although many of the bets that are typically traded are relatively easy to value, some (including the 'four flags' market) require more detailed analysis. Examples are given of the evolution of the spread during typical matches and theoretical predictions are shown to compare closely to spreads quoted by online bookmakers during some of the important matches of the EURO2004 tournament.
sports, gaming, recreation, finance, statistics
975-985
Fitt, A.D.
51b348d7-b553-43ac-83f2-3adbea3d69ab
Howls, C.J.
66d3f0f0-376c-4f7a-a206-093935e6c560
Kabelka, M.
e3443c4f-df22-490e-acb6-ab4a8fe5216a
2006
Fitt, A.D.
51b348d7-b553-43ac-83f2-3adbea3d69ab
Howls, C.J.
66d3f0f0-376c-4f7a-a206-093935e6c560
Kabelka, M.
e3443c4f-df22-490e-acb6-ab4a8fe5216a
Fitt, A.D., Howls, C.J. and Kabelka, M.
(2006)
Valuation of soccer spread bets.
Journal of the Operational Research Society, 57 (8), .
(doi:10.1057/palgrave.jors.2602062).
Abstract
Simple statistical and probabilistic arguments are used to value the most commonly traded online soccer spread bets. Such markets typically operate dynamically during the course of a match and accurate valuations must, therefore, reflect the changing state of the match. Both goals and corners are assumed to evolve as Poisson processes with constant means. Although many of the bets that are typically traded are relatively easy to value, some (including the 'four flags' market) require more detailed analysis. Examples are given of the evolution of the spread during typical matches and theoretical predictions are shown to compare closely to spreads quoted by online bookmakers during some of the important matches of the EURO2004 tournament.
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Published date: 2006
Keywords:
sports, gaming, recreation, finance, statistics
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Local EPrints ID: 41153
URI: http://eprints.soton.ac.uk/id/eprint/41153
ISSN: 0160-5682
PURE UUID: 3cf02257-e6ff-44cf-bbf4-b074284aa714
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Date deposited: 24 Jul 2006
Last modified: 16 Mar 2024 03:13
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Author:
A.D. Fitt
Author:
M. Kabelka
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