Beating the ‘Closing Line’, ‘Start Price’, or ‘SP’ refers to obtaining better odds than the final pre-event price. Bettors that can find a way to consistently beat the SP will earn steady profits.
By incorporating my research & findings into this article I’ve created a guide to Beating the SP. For those that are new to this site, this is a great place to start learning about profitable ways to bet.
The Closing Line/Start Price
The ‘Closing Line’ or ‘Start Price’ is the name given to the odds that existed the moment before an event started. They’re the final odds, essentially.
So why is that significant, you ask?
The Closing Line is important because it tells bettors whether the price they took earlier on turned out to be a good or a bad one. If the odds have gone down by the SP, then you’ve most likely succeeded in obtaining value. But if they’ve gone up, your bet probably holds negative value.
The reason why the SP odds can be used as a benchmark for value is because they mark the latest possible point before an event, where the most money has been matched before going inplay, and the public has the most information to hand.
To fully appreciate the “accuracy” of the start price, check out my post on the Wisdom Of Crowds Theor. In this article I conclude that by the start of an event, betting markets naturally form a strong “aggregation of diverse opinions” and a “wise” representation of the true probabilities for events.
Therefore it’s very difficult to find value from the Start Price. The “crowd” (i.e. the betting public) eliminates most, or all, of the vastly incorrect prices. And incorrect prices are what bettors need in order to find value.
The Meaning Of “Beating The SP” or “Beating The Closing Line”
Beating the Closing Line in regular fixed odds betting simply means backing at odds greater than the start price. For example, backing a horse at 12.0 when the odds settled at 9.0 pre-race is said to be “beating the start price”.
From a sports trading perspective, beating the SP can be achieved in one of two ways:
- If you Lay at odds less than the SP. This upward price movement is described as a “drifter”.
- If you Back at odds greater than by the SP. This price downward movement is described as a “steamer”.
If you’re able to ‘beat’ the SP on every one of your bets then you’re onto a winner — even if you observe several fluctuations in the odds on the lead up to the event.
Beating the SP isn’t unique to horse racing or any other sport; the principle holds true for all sports.
How To Check If You’re Beating The SP
To verify whether or not you’re beating the SP, you must accurately record the odds at the start of the event and compare them to to the odds you’ve placed. This process can be very time consuming and tedious (which is why most bettors don’t bother).
For that reason, I highly recommend that you subscribe to Betting.com’s Portfolio Tracker. This enables subscribers to instantly record bets at current odds, check on automatically-settled results, and thoroughly analyse performance using a variety of different metrics — including comparisons with the SP. At a relatively low cost, the tool can help to separate profitable selections that consistently beat the SP, from the ‘losing’ bets that didn’t.
In the next section I elaborate on drifters and steamers, and provide conclusive evidence as to why punters should focus their efforts on beating the SP.
Drifters & Steamers
At this point you may still be unconvinced in the accuracy of the SP and how it can be used as a test of profitability. You may be asking yourself:
- Can the sports markets be relied on for accuracy? and
- Does the SP really show us what bets are “good” and those that are “bad”?
Analysing Drifters & Steamers sheds light on these questions, and will alleviate any doubts you have.
Why Pro Bettors are Interested in Drifters & Steamers
I admit: I was very reluctant to believe in the idea of market efficiency when I started out trading on Betfair, and I learnt the hard way.
My firm belief (now) is that on average the SP is accurate and “fair” and it’s difficult to find a positive or negative edge from those prices. I’ve produce full analysis on this very subject which can be seen from my post on Drifters & Steamers. Indeed the results of that study are very clear cut. I’ve summarised them below.
The Steamers: all bets in a sample strategy that beat the closing close
Despite there being many losing bets in the sample, the overall value in beating the SP by obtaining better odds is indisputable.
The Drifters: all bets in a sample strategy that didn’t beat theClosing Line
The strong negative trend (which is seemingly a reflection of the previous graph), underlines how backing at lower odds than the SP loses you money.
These findings underline the importance of:
- Selecting bets which end up lower by the SP, and
- Closing out of bets that appear to be moving against you while trading (i.e the odds are rising).
No "closing out" process was used in this Back only strategy. So no action was taken to lessen the impact of Drifters or Steamers. Hence the deleterious effect the Steamers (in pink) had on the profit.
Ideally every bet you place would fall into the “Steamers” category — but that’s an unrealistic goal. You should however aim to improve your profitability by trying to maintain a high ratio of Steamers to Drifters (at similar average odds) amongst your selections. This should ensure that the profitable Steamers carry a yield which outweighs the negative yield of the Drifters.
GodsOfOdds concurs that it’s vitally important to beat the “closing line” (the American term for ‘Start Price’) for profitable betting, and have used simulations to demonstrate the merits of doing so.
The Bigger The Price Difference, The Better
Not every bet that beats the SP is going to win. There will always be ups and downs in your results.
But the key to finding value in sports betting is by beating the SP by the biggest margin you possibly can, as frequently as possible.
So backing odds just before they massively steam (drop) is the best outcome you could wish for as asports bettor. That should be the primary focus.
Cold Trading For Beating The Closing Line
There’s more than one ‘cold‘ way of trying to identify odds that are likely to beat the SP.
In case you haven’t read my post on Cold Trading, then I’ll recap…
Cold Trading is betting using only market information, without the support of additional knowledge relating the sports event. It may come as a surprise to some of you that many Horse Racing traders know very little about the form, jockeys, trainers, pedigree, the going — and some don’t even watch the racing whatsoever. These kinds of “cold” bettors exist in both the financial and sports betting worlds.
Cold Trading lends itself to beating the SP, because what you’re doing is basically a game of “higher or lower”. You want to bet higher than final odds. And achieve this doesn’t necessarily require knowledge on the specifics of the sporting event.
Most traders enter the market late, making the odds increasingly efficient by the SP
Weight Of Money
Cold Traders may be able to obtain better odds prior the majority crowd arriving late in the market (as shown in the above graph). One approach is to monitor the Weight Of Money on the early prices in order to predict the direction the odds will head.
Be warned though: the odds don’t simply ‘choose’ a direction — up and down fluctuations are normal.
For trading on the exchange I recommend using BetTrader or Geeks Toy. It’s inexpensive and superb value. Without the use of a Betfair trading tool you’re at a speed disadvantage in already highly competitive markets.
Human factors influence market movements.
Our nature leads us to form opinions — no matter how irrational it might be. When humans get it wrong, it creates value betting opportunities. The most common human factors which influence Horse Racing markets are:
- Superstition & Random choice: Horses are chosen for the most peculiar reasons such as the name, colour, or even just a “feeling”. The opinion isn’t necessarily well founded.
- Herd Mentality: Odds rise or fall as a result of momentum. Once the market has moved in one direction many bettors jump on the back of it and push the odds further in the same direction
- Pre-race Observations: A horse’s equipment or appearance in the parade ring plays a part. Its gait, sweating, or restiveness can influence our confidence, and this goes for any sporting event: think about watching football players as they stand in the tunnel before a match. The public observes signs of strength or weakness, as tenuous as they may be.
Being able to identify exaggerated market movements is a challenging, but potentially rewarding approach to beating the SP.
Other Predictive Methods
It’s thought that arbitrage opportunities represent a turning point in the odds i.e the point where they begin to drop. This may occur due to an influx of money (intelligence) to the betting exchange.
Monitoring arbs and acting on these signals as quickly as possible is one way of betting on value, and beating the SP. I recommend the best arbing software in the post What’s The Best Sports Arbing Software?.
My favourite arb finders are:
Rebelbetting is without any doubt the best, most professional service on the market. It’s fast, user-friendly and the most actively developed arbitrage solution today. If you sign up today then you’re entitled to a free trial period that turns into a monthly subscription at the end of the week. And it’s straightforward to cancel the subscription.
Using Historical Data To Beat The SP
Popular Data Items
For horse racing there’s certain key facts that influence most punters’ selections:
- Horse-specific: How the age, sex, fitness, and weight-over-distance ability compares with the other horses
- Form: For example, the Jockey/Trainer strike rates
- Race type: How horses are likely to perform on a specific race type based on their track record
- Weather conditions: How the horses typically perform under the current weather conditions.
If there’s an opportunity to take a good (high) price, and it evidently doesn’t account for a key piece of criteria… then the sooner you strike, the better! The market will eventually iron out these opportunities if you don’t act fast.
Read more on selection criteria from my post ‘What Causes Pre-Race Market Movements?‘
It is however quite difficult to use historical data as a way of beating the SP. Bettors need to be selective and strike only where there’s a very good chance of the bet having an advantage.
Here’s some of the complications:
- You have to be able to tell when the market has incorrect prices — which is difficult. Often there isn’t a simple recipe for finding an incorrect or exaggerated price either. In fact, the market incorporates so many opinions and diverse points of view that you’re more likely to get it wrong yourself.
- If your selection method is the same as many other bettors’, then you’re unlikely to have any strong advantage. You need to know something that the others don’t.
- If the odds you calculate are too closely in-line with the odds on the exchange, then you may have only achieved a method for compiling odds. This isn’t necessarily going to help find you value.
- A good strategy may work for a while, but if it’s not discreet or secretive, then it’ll attract volume. As a result of this the odds will be brought quickly into line. If you’ve found an advantage, you need to consistently be first to the punch.
Using betting criteria to beat the SP is a bit like buying a house…
You may identify a house that has exceptionally good transport links, a larger-than-average garden and ultra-modern decor compared to similar homes in the local area. But if these attributes are factored into the PRICE of the property, and it's worth more as a result, then you’re not getting VALUE for money. You're just spending more and getting more.
Betting is no different. You need to be buying your odds at value for money in order to generate consistent profits.
Using Pedigree Data (Horse Racing)
Pedigree data is used by racing bettors seeking an advantage. The pedigree tells us a horse’s capability based on its genetics.
It can be advantageous to use this information — particularly for horses in maiden races, or horses debuting on a new surface. In these situations there’s not much of a historical record for punter’s refer to, and thus very little is known about their performance. So the markets tend to form the odds based on public news, gossip or speculation. The public doesn’t put too much emphasis on the bloodline.
Historically the offspring of good sires are more successful than those which came from mediocre sires. Therefore if you know nothing more about an unraced (or lightly-raced horse) than the identity of its sire you would already know something of value.
Admittedly, pedigree data can be overwhelming. As a result of this, horse racing fans shy away from using it altogether. But remember: the more research your betting system requires, the less chance there is of others are doing the same thing. This increases your likelihood of finding that competitive advantage. So it’s worth getting to grips with some of the pedigree jargon to perform different analyses to what the majority of punters are already doing.
You can find horse pedigree data from:
Learn more about the pedigree from my post on Horse Pedigree.
Hopefully there’s enough information on this page to get you started with Beating the SP. Or any aspect of value betting! To delve further into any of the topics covered in this post, click through the links I’ve provided.