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RE: backtesting against bookies... are you backtesting against the opening odds or the final odds? Betting markets are like the stock market... the odds move as
by JamesSwift 2y ago
RE: backtesting against bookies... are you backtesting against the opening odds or the final odds? Betting markets are like the stock market... the odds move as action is taken on the bet. So the initial price is like an IPO price, and then the market is what determines the final odds.
- 2d8a875f-39a2-4 2y agoDepends on the dataset available. Usually final odds because that is what is preserved for posterity. You are right of course. My back testing was more for interest than for any other purpose. And the bookies models are obviously optimising for other outcomes than mine.
- JamesSwift 2y agoFor sure, there is still incentive for bookies to start with a price that is close to the ending price. And if you base your picks on a 'late' line then that is probably more likely to be a 'correct' line.
- 2d8a875f-39a2-4 2y agoWell beyond even that, they're optimising for profit so they are looking for things like setting odds that match popular sentiment when the real outcome probability is significantly different.