We’re all looking for opportunities to make money in sports trading.
One way for you to reduce your risk AND profit long-term is to take advantage of compression points. But what is a compression point?
This guide aims to provide you with what you need to know about compression points and how they can be exploited for long-term gains.
What is a compression point?
A compression point is when the odds on any particular market are ‘compressed’ or at (or close to) their lowest point. You may also call these ‘low-risk lays’.
A simple example may be on a tennis player who was the favourite in the match and who has just gone on to take the first set. In such a case, their odds may now have shortened from their original odds of say 1.50 to 1.15
Tennis is a great place to find compression point opportunities due to its ‘mechanical’ nature. Women’s tennis is especially good as the match odds markets will be volatile with lots of up-and-down movements in the odds.
Another example could be a horse that has starting odds of 4.0. If the horse leads in the final furlong, its odds will naturally contract. As the probability of it winning increases, the odds will fall further until they eventually get to 1.01. If the horse’s odds drop nice and low and you have done your homework or can see that there is the potential for the horse to get caught, then an opportunity for you to lay the selection may arise.
You will also see compression points in football. For example, a team may have the win odds at kick-off of 2.0, however, if they go two goals in front, their odds could plummet to say 1.20 or less, depending on how long has been played in the match and whether the other team are in the match or not.
When you open a position in the markets at such a point, there is a bias in terms of risk versus reward in YOUR favour.
How can I exploit compression points?
Every day, whether it’s a football team, horse, tennis player, or other team/player, compressed prices can be found. So think of a team that is two goals up, but ends up drawing or losing the match.
A tennis player who is 5-2 up in the second set who goes on to lose or at least struggles to close the match out and drops the next two games.
A horse that is in front going over the last fence, but ends up losing. Did you know only around a third of favourites actually win?
In each of the above scenarios and many others, the odds will have compressed to their lowest price in anticipation that the horse/player/team is almost certain to win.
However, if you’ve bet on sports for long enough, you will know that there are no guarantees and those who are expected to win, often do not, even when the masses are expecting them to. This represents a fantastic opportunity.
The great thing about compressed odds is that they represent a huge upside compared to the potential downside.
So laying a tennis player at 1.10 for £10 represents a risk of £1 to win £10.
However, your player doesn’t HAVE to win.
If you have ever seen a ladies’ tennis match you will know that they often lose their service games. The turbulence of such matches (the too and throw) represents fantastic opportunities to take advantage of compressed odds.
Due to the fluctuating odds, Tennis is one of the best sports to take advantage of compressed odds.
Women’s tennis is perfect for price swings as women tennis players are constantly losing their service game which produces regular big swings in the odds. Mens matches on the other hand can see fewer swings as it is more about power with more aces being scored and players holding their service game more often.
In the shot below of a tennis match between Marie Bouzkova and Beatriz Haddad Maia, you can see that Bouzkova started the match well, winning the first set. Her odds then contracted and fell to the low of 1.15. It’s a perfect opportunity for a lay. Haddad Maia was ranked 13th with Bouzkava ranked 32.
As you can see, Bouzkova’s odds then drifted as Haddad Maia started to get back into the match.
So Bouzkova’s odds drifted from 1.15 to around 2.0, representing a profit of 85 ticks.
You can see that I have highlighted the two points you could have laid (L) and then backed (B).
Here’s another random chart image I took of a tennis match.
You can see that the price was compressed for this player on three or four occasions. It’s easy to see how you could have placed a lay trade at any of those compression points and profited significantly with very little risk.
Or this example from a ladies’ match.
Julia Grabher was 1.01 at one point. Her odds then drifted to 2.40 as her opponent mounted a comeback. A huge swing and opportunity to profit at very little risk.
These opportunities occur frequently in tennis and other sports.
Where can compression points be found?
Compression points can be found in all sports. Here are a few examples:-
- A horse race where the leading horse is running well and its odds have dropped dramatically with the market fully expecting it to win. Horses can often look really comfortable until they hit the last couple of fences or the last furlong and run out of gas, only to see an outsider which is still full of running overtake it in the run-up to the finishing line. It happens, A LOT! Over the sticks they can also fall or unseat their rider.
- A tennis match where a player has taken a good lead, for example, won the first set or is on the brink of winning the match. In both scenarios, a player’s odds will fall considerably.
- A tennis match where a player is 40-0 or 40-15 up in a game. The player is expected to win the game with such a big lead. If the player wins the game, their odds will not move much, however, if they now drop the next couple of points, the price will drift sufficiently for you to make a profit. Once again, a bigger upside than downside or reward to risk. The same can be said of a tie-breaker with a player having a good lead of say 5-1.
- A football match, where a team is 2-0 up, but where the stats suggest they don’t deserve to be. xG can be good here. Check the team in front, if their xG is lower than the opposition, it could be a good opportunity to lay them for a small risk and big reward.
- Another opportunity that I have often profited from is when there is a football match where the markets are fully expecting plenty of goals. When there is a first-half goal, the urgency factor kicks in. This is when a game can potentially explode into life and finish with four, five, or even six goals. Laying under 4.5 or 5.5 can often produce excellent returns for very little risk especially when more goals are generally scored in the second half and late on.
Should I trade all compression points?
No, certainly not. It’s not just a case of laying a selection because the odds are very low. You still have to have a good reason to do so.
If you see that a team is trailing but has created the best chances in the match, this could be a potential opportunity for you to lay the other team.
If a tennis player has a good H2H record against another player and the player in front is starting to struggle with her serve, it could be an opportunity to lay her.
Or if you suspect that a horse is going to run out of steam in the last furlong and the price is short enough, you may want to consider laying it.
What’s the advantage of trading compression points?
The most obvious one for me is the low risk-to-reward ratio.
Another bonus is that it doesn’t necessarily matter if the player/horse/team you lay goes on to win, as in many cases, you are just looking to make a nice profit and then get out, rather than see a full turnaround.
For example, if you lay a football team at 2-0 and the score goes 2-1, you will have a profit and can then cash out.
If you lay a tennis player and make, for example, the equivalent of your lay risk, you can then cash out. For example, if you lay a tennis player at 1.20 for £10 your risk is £2. You can then cash out if your profit gets to £2. You can also set this up to automatically in Betfair to auto cash out.
Hitting a ‘big’ winner where you in effect went against the market and reaped the rewards feels good. You can also lose a few and still not feel like you are on the verge of losing your trading bank. It also doesn’t knock your confidence so much after you have had a few losers, as your risk is so low.
That’s it. A brief guide to compression points in sports trading and how you can exploit them for long-term profits.