How to Trade The Opening Set

I’ve received numerous questions about in-play tennis trading and how I approach it. For me, it’s really something that’s evolved over the years, through trial and error, into more of a philosophy rather than any rules-based system. As a result, trying to explain it in simple terms can be a challenge. So, I thought it would be fun to make a more formal attempt to break it down and show some suggested strategies. So, don your Wimbledon whites and let’s get going!

Before we get started, a little background. I’m going to assume if you are reading this, that you have some experience of trading in-play on Betfair Exchange (or equivalent exchange) and that you know what a tennis ball is :-).

I’ll also assume therefore, you are familiar with the rules of tennis and are comfortable with the process of backing and laying selections in the hope of profiting from the move in odds.

If that all sounds alien to you, you might want to stop reading now. I’ll try and put an ‘introduction to tennis trading’ style guide together if there is the demand for one. Otherwise, there are plenty of good resources on the web to check out.

I should also state that 90% of my in-play trading is done in the 3-set match format (i.e. I avoid the men’s grand slams – the only 5-set matches on tour). And its these 3 sets, each unique in their own way, which offer many different risks and opportunities from which we can aim to make a few quid.

In this first post of the series, I’m going to address what I might look for in the opening set of a tennis match from a trading angle. As you’ll come to see in subsequent posts, each set in a tennis match is a very different trading animal.

The typical in-play price swings

On balance, most of my trading is actually done and dusted within the confines of the 1st or 2nd set. But, that being said, the opening set is arguably the safest set to trade, so it makes perfect sense to star here. The final, 3rd set (if it goes the distance) is high-octane and not recommended until you know what you are really doing. I only trade the 3rd set in certain circumstances.

So, here are my thoughts on trading in the 1st set. I hope to compliment this series with some videos or tutorials to help explain these concepts in practice. Sometimes seeing is believing 😉

The major reason I’d encourage anyone getting started to stay within the confines of the opening set is that this is really where the least damage can be done when starting out. If a trade goes against you then you can define exactly how much you are likely to lose, and providing you can apply some basic discipline, you can still make some good money.

Spotting Potential Entry Points

Before getting into some specific worked examples, I first want to highlight the types of scenarios in the 1st set which should present plentiful trading opportunities.

Low-Risk Entries

When a match begins, prices are at their equilibrium in the market so it rarely makes sense to get involved straight away. Ideally, we need to see prices pulled away from this equilibrium to areas where the risk vs. reward is more in our favour. So, assuming a match is properly underway my first port of call is to look to lay players as close to their set winning price as possible. What is a set winning price and how on earth can you know it ahead of time?

I’ve written about the method to calculate set winning prices before, but essentially tennis player prices in-play are anchored to their starting prices and they move very mechanically with every point won or lost. The two major factors that cause player prices to move the most are breaks of serve and winning sets (think of these as the equivalent to goals in football). Indeed, the only way for a tennis match to be won is for a combination of these things to happen. It is therefore relatively easy to calculate what a player’s set winning price would be (to within a few ticks) for the 1st set and similarly where it might snap back to in the event of a break back.

Pursue FIRE Tennis

I’d strongly recommend reading my previous article of this, which has a number of very clear, real-life examples to get this concept down.

Laying or taking on a player who is leading towards the end of the 1st set and who is at (or even sometimes lower) then the set winning price, offers an incredibly low-risk entry point but with potential for big upside if they start to give games back. Essentially, it’s an overreaction by the market which has made the assumption that the player leading has the 1st set in the bag and is being priced accordingly. Laying at these compressed prices means there is very little further downside to the price if they do indeed go on to win the set.

Once such a trade is open, I can feel quite confident in leaving it to run to the conclusion of the 1st set regardless of the outcome. I’ll either suffer a few ticks loss or be in a position to bank some good profits if the other player breaks back.

Taking on Weak Servers

Other scenarios I might look for in the 1st set include laying the player who has achieved a break of serve when I’ve estimated them to have a low projected service hold. In this scenario, I would go with a near full stake in the early parts of the set, but once the set has gone past, say the first 8 games without a break of serve, I’d be going in with (at best) half stakes. By low projected service hold, I simply mean that they have weaker service hold percentages than their opponent or the tour average on that given surface. Pairing a player like that to one who has high projected service holds and/or a proven ability to convert breakpoints and you have a traders dream match.

I also like to oppose any weak serving players (again those with low projected service hold stats) when they take a surprise double-break lead in the 1st set. This happens more often than you might think as often favourites are slow starters and need a few games to get going. So a scoreline such as 4-1 is usually the opportunity here.

The price for the player leading is almost always going to be close to that set winning price having achieved a double break and I would go full stakes at this trade because the statistics will show that player in front has a low projected hold of serve on that service and against that level of opponent. In other words, they are susceptible to being broken.

If this occurs, I then do what I do with most of my trades and that is to first focus on managing my liability so that I’m left (usually) with a no-lose position. Only once my liability is removed, can I start to think about profit targets.

For example, I explain below how I usually seek to remove 40% of my liability if the break of serve occurs in my favour and then remove the remaining liability if the player then solidifies the break with a hold of serve. If the double break is then fully recouped, hedging out for equal profits is the next step.

The last scenario I tend to look for in the opening set is when the scores are level and I want to take on a weak server for an individual service game. In this scenario, I’m looking for prices to be under or, at a maximum of, 2.50 and I’d use half stakes here. I don’t really do this too often as trading single games is akin to scalping and profit potential is quite small.

I’ll then remove 50% liability if the scoreline gets to 0-30 or 15-40 against the server. If it gets to 0-40 I’ll take all the liability out (i.e. I don’t wait for the game to be won). Win or lose, I’ll hedge out at the end of the service game.

Pre-Match Trading?

Does it make sense to start trading a match before it has even begun? I’m not talking straight betting here (that’s a whole other topic), but I personally very rarely open a trading position pre-match, unless there is some other indication (such as the surface-adjusted Elo rankings model) that suggests there is huge value (e.g. 30+ ticks) to be had in doing so.

Should this be the case, and again I stress this is not often, I’m most interested in laying a heavy, short-priced favourite and would do so with likely half my usual stakes to keep risk under control. We are, after all, taking on a heavy favourite so it does not make sense to go gangbusters in opposing them before a ball has even been struck.

Laying in this manner is a much more attractive approach than backing a player who looks to be priced too high. Let’s say, for example, we back a player who looks good value at a price of 2.90 but they get broken early in the first set by the favourite who then solidifies that break with a service hold of their own. Well, if that were to happen the player we backed would see their price blow out to 4.60 putting you in a difficult place and a long way from breakeven.

Conversely, if we lay the short-priced favourite and experience the same scenario (i.e. broken early and then the opponent holds) their price would only move north about 15-20 ticks (e.g. from 1.20 to 1.35-1.40) as they would still be considered the heavy favourite for the match. This is the benefit of laying low in tennis.

Summary

So there you have my thoughts on which things to look out for within the context of the opening set of a tennis match. Hopefully, it shows that there is not really one ‘magical’ mechanical system that can be applied. Rather, you have to trade each situation on its merits. It does require some skill and intuition but nothing that can’t be learned with relative speed.

To bring my comments above to life a little more, what follows are a few worked examples of the key points above to demonstrate what I’d be doing in a real match, trade for trade. I’ll start with the most important skill – avoiding losing positions through liability management.

Liability Management

This is a great approach to scaling out liability in trade without sacrificing too much upside. It was taught to me some years ago by a professional tennis trader that I knew and I still use it to this day, applying it to almost every situation. In a nutshell, by removing 40% of your liability at the right moments, you are extending your safety net and furthering the probabilities of executing a profitable trade, one where the risk is low and controlled and the reward is high.

Let’s run through some examples of how this might work in practice.

  • Player A starts the match as the narrow favourite, priced at 1.80
  • Player B is, therefore, the narrow underdog, priced at 2.20

Early in the 1st set, Player A breaks Player B’s serve to take a 2-1 lead. Having gained the initial advantage, Player A’s price shortens to 1.43. At this point, we decide to lay Player A just before they serve next at a price of 1.43 for a £100 stake, leaving us with a total liability of -£43.

It’s important to remember that, unlike betting, when we place a trade the full amount is not at risk. Even if this trade did not go our way, we would have sufficient time to ensure that we don’t lose anywhere near the full £43. We will see in the steps below, how we can safely limit our losses in this case to £10.

So, at this position we would have a -£43 liability on Player A and a maximum potential profit on Player B of +£100

A Losing Scenario

Let’s first see what would happen if things went south on us. If, after laying Player A, the next game does not reach a pressure point scoreline against Player A, such as 0-30 or 15-40, which would allow us to start lowering liability, then the worst-case scenario is that Player A will hold their service game to take a 3-1 lead.

Here Player A’s price would shorten to around 1.36 and Player B’s price would drift out to around 3.65. What to do? I personally would stay in the trade while Player B has their turn to serve, but I’d be watching very carefully in case they struggle.

If this happens, I don’t let a double break go against me. I always hedge out for a loss before the game concludes. So, an example of when you would hedge for a loss is if the game reaches the same pressure scoreline, this time against Player B – i.e. 0-30, 15-40, or breakpoint at 30-40 or 40-A against Player B.

In the above example, you would be looking at a controlled loss of around -£6 to -£7, or roughly 10 ticks. When using this liability strategy always keep in mind that you want to define your maximum tick loss – a 10 tick limit is a good target.

Almost There!

In this possible scenario, Player A holds serve and goes 3-1 up. However, during the previous game Player A was under pressure and faced a 0-30 or 15-40 scoreline. So, while Player A did not ultimately concede their serve, because prices moved enough in our favour mid-game we would have been able to remove 40% liability and, at worst, scratch our trade. In this scenario:

  • Player A would be priced at 1.39 and -£25.80
  • Player B would be priced at 3.55 and +£71.10
  • After hedging our position Player A would be +£2.08 and Player B £0.00

Boom!

In a winning scenario, Player B has success at putting pressure on Player A’s serve and the score moves to a pressure situation for Player A, such as a 0-30 or 15-40 scoreline. We are immediately in a good position in this trade as the market is now anticipating the break of serve being quite likely and prices move accordingly. With this initial move, I want to first remove 40% of the initial -£43 liability.

With the score at 0-30 or 15-40 against Player A, Player B’s price will have shorted to around 2.68. So, to remove the 40% liability, I lay Player B for £17.20 (i.e. 40% of the £43 liability) at the new price of 2.68.

This lay at 2.68 for £17.20 is essentially facilitated by giving up £28.90 from the maximum initial £100 profit on Player B

I’m now left with the following position: Player A priced at 1.60 with a liability of -£25.80 and Player B priced at 2.68 with a maximum potential profit of £71.10

If Player B is successful and confirms the breaks Player A’s serve to level the match at 2-2, Player A’s price moves will move out to 1.80. With the break now confirmed, I can remove a further 40% from the -£25.80 liability (which would be £10.32).

To do this, I lay Player B at their shortened price of around 2.25 with £10.32, which would equate to £71.10 – £12.90 = +£58.20.

I have gradually reduced the liability and now left with the following position: Player A priced at 1.80 with a remaining liability of -£15.48 and Player B priced at 2.25 with a maximum potential profit of +£58.20.

If Player B then holds their service game to go 3-2 up, Player A will move out once more to 1.91 and I can them remove all remaining liability. To do this, I lay Player B at another shortened price of around 2.10 with the remaining liability of £15.48.

This now leaves me in the following position: Player A priced at 1.91 with zero liability and Player B priced at 2.10 with a maximum potential profit of +£41.18.

This hopefully demonstrates what is an extremely low-risk strategy where the risk vs. reward is very good. Providing you are disciplined you are only risking around £6 (or 10 ticks maximum downside) for every £100 you have in the market.

This is certainly the best risk control strategy I would recommend, especially for newcomers. I’ve heard of other traders scaling out at different percentages (e.g. 25% at a time or 35% for example), but I’ve found 40% to work best for me.

Obviously, as with any trade taken, you need to know why you are backing or laying that player. For lays of this nature, we want to always try and take on the player that does not offer value and have the necessary belief or conviction that the opponent has shown enough fight thus far to continue to challenge in the match.

Double Breaks

To recap, in this scenario I’m looking to take on (lay) the player who, based on some pre-match research, is perceived to be a weak server and therefore carries a good chance of being broken back by the opponent. I’m looking to oppose that player when they have gone a double break up in the opening set and just before they next serve again. For example:

  • At the start of the match, Player A was priced at 1.64 and Player B was priced at 2.55
  • Player A is now leading 4-0 and is about to serve
  • Player A’s current price has shortened to 1.23, so a lay trade here for £100 leaves us with a liability of -£23
  • Player B is priced has drifted out to 5.26 and is showing a maximum profit potential of +£100

Scenario 1 – The Break Back

Player B makes a successful break of Player A’s service game to make the score 1-4. In this scenario, Player A’s price moves out to 1.28. I then remove 40% of the -£23 liability, reducing the liability down to -£13.80 and this leaves me with a maximum potential profit on Plater B of +£67.53

Player B then holds their service game to make the score it 2-4. Player A’s price then drifts out some more to 1.34. I can now remove another 40% of the remaining -£13.80 liability = £5.52.

To do this, I lay Player B at around 3.99 with the £5.52 which would equate to £67.53 – £16.50 = +£51.03.

So after this trade, we have the following position:

Player A priced at 1.34 with -£8.28 liability and Player B priced at 3.99 with a maximum profit potential of +£51.03

Player B then breaks Player A’s service again to make it 3-4. As before, Player A’s price then moves out to 1.58. I then remove the remainder of the liability of -£8.28.

To do this, I lay Player B at around 2.73 with the £8.28 which would equate to £51.03 – £14.32 = +£36.71.

So after this trade, we have the following position:

Player A priced at 1.58 with zero liability and Player B priced at 2.73 with a maximum profit potential of +£36.71

Scenario 2 – Player A Wins the Set

From the starting point of our trade (Player A being 4-0 up), Player A goes on to win the 1st set. We have layed Player A at 1.23 and we, therefore, have the following options in this scenario.

If the set continues with serve and gets to 5-1, we can scratch the position for a no loss. However, if Player A then goes on to win the set we would lose 6 to 7 ticks maximum.

Once again we can see that the risk vs. reward is again very good and certainly worth taking on.

Laying Pre-Match Favourites

When laying very short-priced favourites they first have to show some value in their price. Secondly, they need to be priced very low. I personally go for 1.20 or lower. Let’s work through a trade example and the possible scenarios that might unfold.

  • Player A is our identified short-priced favourite and is priced at 1.11. Let’s say we decide to lay Player A for £100, meaning our liability would be -£11.
  • Player B is clearly going to be a huge underdog and priced at around 9.70. With the trade matched, we would have a £100 maximum potential profit showing on this player.

Winning Scenario – Player A Gets Broken

Should Player A get broken in the 1st set, the price will rise to around 1.35. If this occurs, I’ll remove all liability by then backing Player A with £100 to cancel out the prior lay trade. This then leaves you with +£25 profit on Player A, whilst player B is priced around 3.80 and you have a scratch position on this player +£0.00

Scratch Scenario – No Breaks of Serve Either Way

Should the opening set be a serve-fest with no breaks, then before the inevitable end of set tie break, Player A’s price will move out to around 1.18. Here you would hedge out to remove liability and then decide where you want to park the profit. You could go with an equal profit or leave it all on Player A

Losing Scenario – Favourites Coasting

If the favourite, Player A, breaks the underdog (Player B’s) serve. If the favourite breaks then his price will contract to around 1.06 leaving you with a controlled loss of around £5

Final Remarks

Well, at the risk of writing an essay, I think I’ll pause there for everything 1st set. This has truly been a brain-dump and I apologise if it’s been a little longer than I might have planned. I told you explaining these scenarios is not straightforward 😉

Hopefully, this gives you a flavour of the in-play trading opportunities that present themselves multiple times per day, every day. I hope I have also demonstrated that scaling out liability at the right points dramatically cuts the risk to any trade while leaving significant upside potential.

Join me again in Part 2 (coming soon), when I’ll explore both the types of scenarios I typically look for in the 2nd set, much of which is dependent on what I’ve observed in the 1st set, as well as some more worked examples of how I might trade them.

I hope you enjoyed the post and feel free to post questions below

All the best with your trading!

Dan

 

This Post Has 2 Comments

  1. Andy

    Thanks for taking the time to write that out. I’ve dabbled in tennis trading, but without consistent methods to follow it’s hard to get consistent results, so appreciate the pointers you have given here.
    Where do you find your serve stats, specifically an up to date tour average? Are you looking at service points won or service games won?
    Unfortunately with the Indian Wells tournament cancelled, we’re all a bit starved of tennis matches to follow – I was just getting to grips with my doubles/trebles strategy as well. Don’t particularly want to risk the ITF/Challenger matches…

  2. Pursue FIRE

    Hi Andy, thanks for reaching out. Yes, it’s a great shame that Indian Wells was cancelled. It’s considered the biggest tournament outside the slams so a big blow. When you consider they pulled it due to one or two coronavirus cases, it does not bode well for some other upcoming tournaments. Miami, Rome Masters etc are all to come and arguably higher risk. Who knows, how things will pan out. I would not even be surprised if the French Open and Wimbledon are at risk, although you’d hope the warmer weather helps to suppress the spread. There are many resources on the web to get all manner of player data, one’s I use include tennisabstract; tennisinsight and also there are good stats on both the ATP and WTA pages. Concerning serve, I’m generally looking at each player’s service games won (i.e. service hold) on the given surface, relative to the tour average. I’m then also considering how often they break opponents and also how often they save breakpoints on their service game. By comparing each of these at the player level relative to the tour/surface average you can then imply probabilities for the likelihood of holds and breaks in a specific match up. E.g. if you have a player with weaker projected hold stats (relative to the average) who finds themselves a break up against a player with above-average break stats and superior service hold stats, that then adds credibility to the trade idea to lay the inferior player should they get ahead. It also generally gives me a steer on which direction a match should go, which player is more likely to struggle on serve etc. Hope that helps and yes, I’d avoid the ITF/Challenger tours if nothing else than for the lack of liquidity. Thanks

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Hello and welcome to Pursue FIRE. My name is Dan and I am the owner and author of all content on this site. I am passionate about personal finance and look forward to engaging with you.
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