September 24, 2020

Sports Betting As An Investment

SPORTS TRADING – How to Lay The Draw

In this article, we discuss one of the most famous sports trading strategies, the Lay The Draw method. We discuss the idea behind it, how to Lay The Draw on Betfair, and if it is still a relevant and profitable method today, perhaps with some adjustments.

 

 

What is the Lay The Draw strategy?

 

The Lay The Draw strategy is a trading strategy that utilizes the fact that only about 11% of all football (soccer) matches ends 0-0, i.e. a goal is scored in at least 89% of all matches. With Lay The Draw (LTD) you bet against the match ending in a draw but this being a trade and not a straight bet, you do not just place a Lay bet (i.e. a bet against an outcome on a betting exchange such as Betfair) and then wait for the match to be over to see if you won your bet – no, what you do is you wait for a goal to be scored, and then you trade out for a profit. You are not actually concerned about how the game ends, you are only interested in a goal being scored at some time within the match, after which you will have traded out and left the game.

The idea behind the strategy is that the odds for the draw changes as the time goes.

Let’s say that we have a match where the draw odds are 4.0 when the match begins (also called SP for “Starting Price”. You will often see the terms BSP used. This is simply the Betfair Starting Price).

 

 

As the match progresses and no goals are scored, the Draw odds will drop (since for every minute gone, there is one minute less for either team to score a goal). If you have Laid the Draw, you will see you Lay bet turning into red figures at once, i.e. you will find that you’re losing money as time goes by in the match. Obviously, there is no need to worry about this, since it’s what you must expect.

And then suddenly, goal! The home team favorite scored.

 

 

The market suspends for a while until it is clear the goal will stand and once it re-opens, you will wait a bit for the market to settle (the odds are not correct at first), and then once the odds have found a more stable level (where the Draw odds have increased since it is now less likely that the match will end in a draw), you will cash out (“green up”, as it’s called in trading terminology) and you’re done with the trade.

This method was extremely profitable at first when the betting exchanges were new to the market/public.

 

Problems with the Lay The Draw strategy

 

Later, as the market grew more mature, the method became somewhat less “safe” as a money-making strategy – the thing was that, initially, the odds on the draw exploded after a goal was scored no matter which team scored. As it turns out, this is not actually representing the probability of a draw correct, since the underdog tends to hold on to their lead less than the favorite (the assumed better team). So, what happens is that if the underdog scores first early in the match, then the likelihood of a draw in a match with a clear favorite actually increases rather than the opposite. Of course, the odds need to reflect that since the odds are 100% correlated to the probability. As the market matured, this was now being implemented by the market, and so just laying the draw blindly from the start was no longer as attractive a strategy as it used to be.

So – If the underdog scores an early leading goal, the Draw odds will decrease at first and as a trader, you can now do two things:

  • 1) Accept that this trade went against you and trade out with a loss (obviously not a full loss, since that only occurs if the match ends as a Draw and you for one reason or other have not traded out before)
  • 2) You can also just wait… If the favorite does not score, the odds on the Draw will gradually decrease again and you can just wait until they are back at SP and then trade out for a “scratch” (i.e. with no profits and no loss), or you can let it run further as the red screen (i.e. a losing trade) becomes a green screen (i.e. a winning/profitable trade). The obvious risk of just letting it run is that the favorite may actually play like a favorite and claw that goal back. If it happens very soon after the first goal you’re pretty much back where you started (a small “red” must be expected), however, if the equalizer comes in late, you will definitely be looking at a pretty big loss. The ideal scenario is of course that the underdog quickly scores a second goal, but while this does happen, it’s the rarest of the outcomes (they were the underdog for a reason, after all).

These options are not really very appealing as a trader. The first one is bad since, if you didn’t do anything and no more happened in the match, you would actually win the bet (which it would essentially be rather than a trade). So, you trade out for a secure loss in a position where you would, in fact, win if nothing more happened. That doesn’t sound very good…

The second option is not very good either – letting a bet run hoping that something you really would expect to happen does not happen for the rest of the game is not what trading is about, it has more the taste of risky gambling and we are not gamblers here! Sure, this strategy is about waiting for a goal, so you may ask: What is the difference really? The difference is that as a trader you’re looking for edges and advantages. You don’t just place a bet which goes against the most likely of outcomes with a liability that is larger than your potential win – that is definitely and most certainly NOT having an edge!

So, this approach had to be adjusted a bit and so variations of Lay The Draw were bound to be made.

 

Adjusted Lay the Draw Strategies

 

Naturally, the risk that the underdog scores first means that traders would have to consider alternative ways to continue using LTD as a strategy. Some of these were (are) as follows:

 

Don’t include matches with clear favorites

The rationale being that if the problem with the original strategy is that the Draw odds increases rather than decreases if the Underdog scores first, then we might just want to avoid matches with a clear underdog/favorite. And then the Draw odds will increase no matter who scores first. Sounds good, right? Yes, the theory is correct… however, the problem with more evenly matched teams is that they tend to actually draw more and there are more 0-0’s as well (which is the main problem). So you will often have to wait a long time for a goal to be scored if it is scored at all. This is not what we want as traders.

 

Wait until 20 minutes have gone

This is actually a strategy used by a lot of traders. Naturally, the Draw odds will have dropped by the 20th
minute (or so) and this has two advantages: 1) Your liability is less and 2) Even if the underdog scores first, you may get a profit or at least about a scratch. The downside? There may have been a goal scored before you enter the trade and so the match is a no-trade match for you. Also, there is obviously less time for a goal to be scored and so the statistics of an 89% probability for a goal are no longer valid so you will experience more straight losses on this.

 

Lay the Draw First Half

The rationale is here that even a goal by the underdog will see the Draw odds increase so this could be a way to work around that. The downside is pretty obvious though: There are only 45 minutes to score a goal and there is only scored a goal in about 74% of matches in the first half, so you risk losing 26% of the trades straight out on that. Remember, none of the teams HAVE to score or win the first half. Still, with the right match selection, this approach is not without merits.

 

Lay the Draw Second Half

This is the “reverse” to the former one. It addresses the issue with none of the teams having to score to win. It is also becoming the clear favorite amongst most traders of Lay the Draw today. The downside is of course, that you also here only have 45 minutes (plus added time) to score that all-important goal – and your number of potential trades are less since a lot of the matches won’t start the second half as a draw, since one of the teams may be leading. You can then choose to skip these matches OR you can wait to see if one of them equalizes early enough for you to consider a later LTD trade in the Second Half. A lot of traders who trade the Second Half LTD only enter it later in the Second Half when the odds are to their liking, say 2.0, in which case the liability does not exceed the potential win.

 

Lay the Draw with insurance back-bets

What we mean by this is that some traders put a back bet on 0-0 from the start, since this result is the worst result of all. As the match progresses, the Draw odds decrease and your loss increases – this is then offset by the 0-0 back bet which of course is the opposite. When no goal is scored, the 0-0 odds will also decrease, and you are looking at a green screen for that market. As soon as a goal is scored, this market closes of course and you will have lost the back bet – but you will then have made a profit of the LTD (which should be higher than the loss on the 0-0 market if you have staked correctly). If no goal is scored at all, you will at least break even (again depending on your stakes). The downside to this approach is that your profit margin will be very small. LTD is generally not operating at a huge ROI and so placing a back bet on the 0-0 will cut pretty deep into that. And depending on the timing of the goal, you actually run the risk of a small loss on this – that especially applies of course if it’s the underdog scoring first.

 

Conclusion

 

Each of the strategies/methods/systems (call it what you like) have their benefits and drawbacks so it’s really an individual preference what you like the most. The Second Half approach is undoubtedly the most popular today but maybe because of that, other approaches are more profitable..?

Always make sure to research the matches before you place the trades. There are numerous stats sites available for free on the internet where you can find all the information you need for this method, such as league tables, goals scored and conceded by the teams, goal timings, the number of goals first half/second half, etc. Once you’ve learned to use the stats properly, Lay the Draw is still a very good, profitable strategy to use as a football trader.