Calm down

I can't even be bothered, but just to ease the amount of e-mails I'm currently getting, just read this and then go take a bubble bath:

Reckon this is a betting story more than a football story. Here's the likely chain of events.

1) Someone with a bit of cash hears a rumour suggesting Harry could be on the way out. Doesn't have to be anything too reliable, just enough to make him the guy think that it's worth taking a punt at 50/1. So let's say a couple of grand are put on with a bookie at 50/1. That's a £100,000 liability that's just appeared on their book.

2) Bookmaker readjusts the market so that it balances their liabilities, odds on Harry leaving come down. As he's at such high odds, say to 40/1 or 25/1.

3) Someone else hears the rumour, looks at the odds and sees they've been cut. Thinks "the bookie must know something I don't know..." and piles in on Harry as well.

Repeat 2 and 3.

Odds keep going down, money keeps going on. It's a symptom of the way that people still think of bookmakers as being driven purely by knowledge of what's happening with events, rather than as financial traders (of a sort). Each bookmaker will be looking to balance their risk on a particular market, and so the odds move as money comes in (which is why you hear about horses being backed in to 3/1 or whatever).

There's a good explanation of how this all works here.

With thanks to MattWPBS over at GG (hope he doesn't mind the copy and paste. I'm sure he doesn't).

There's a supermarket within walking distance if I need to pick up some eggs later on this evening.

Spooky
blogger, podcaster, lucid dreamer
www.dearmrlevy.com
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