Tuesday, 15 March 2011

Cheltenham pre-race market analysis

So it's finally here, Day One of the Festival! We can't wait.

This is an article we wrote recently for the racingproofing.com newsletter, looking at the pre-race markets at the Festival, and as we thought our blog readers may also find it interesting, we thought we'd put it on here as well.

Good luck for the next four days - let battle commence!!


With the excitement of Cheltenham upon us we thought we would take a look at whether late market moves before each Festival race is off is any sort of guide to a horse’s possible success.

Considering that many of the Cheltenham races are priced up several months in advance, the market has a terrifically long time to become stable, established, and therefore, you would probably imagine, efficient. So when we hear Big Mac screaming at us that a 25/1 shot has been backed into 16s, should we take any notice? After all, the 6/1 favourite, drifting to 13/2, may have already been punted down from 25/1 a couple of weeks earlier..

We’ve looked at the price of every horse which has run at the Festival over the last five years, from opening show to SP. When a horse has touched a certain price or two, but returned to its original price for its SP, we have marked him or her as unchanged.

The findings are quite interesting.

From 2006-2010, 2,392 horses raced, and of these - 595 shortened in price (24.9%), 512 lengthened in price (21.4%) and 1,285 stayed the same (53.7%).

Of the 125 races, 46 were won by a horse which had shortened up (36.8%), 34 were won by a horse which had lengthened in price (27.2%) and the other 45 won by a horse whose odds had been unchanged (36%).

So we can see, that horses that shortened in the betting ring (and therefore almost certainly on the exchanges) just prior to the off, well outperformed those who drifted or stayed the same.

They won over 10% more of the races than they should have been entitled. Intriguingly, those horses which drifted also won slightly more than they should, while those whose odds which were stable underperformed.

So is there any way to make use of this information this year?

Well, of the 50 Festival handicaps in the last five years in which at least one horse shortened immediately pre-race, 22 were won by a horse which had shortened in the market (from 266 candidates). Backing each one blind at SP would leave us with a loss of -37.5pts. However, if we look more closely at the SPs of these winners, we find that only one came at 20/1 or bigger (Thousand Stars in last year’s County Hurdle (25s into 20s)). If we eliminate those bigger priced selections, we are left with 21 winners from 188 efforts (average win price 8.88/1), and a 19.5pt profit at industry SP, or 10.37% ROI.

If we look away from the handicap races, we are left with a much more sorry story. 329 selections were backed down in price pre-race, 24 won, with an average SP win price of 7.61/1, leaving the bank down by 122.42pts. It appears then that in these cases, horses shortening in price are not nearly as accurate a guide as to increased chances of success.

What about those festival “bankers”, opening up course at 2/1 or shorter, and backed further in before the off? There have been 16 such contenders, but only 5 had gone on to win, leaving us with a level stakes loss of 4.67pts. The list of infamous casualties include Detroit City (6/4 in the ’07 Champion Hurdle), Kauto Star (10/11 in the ’08 Gold Cup) and Voy Por Ustedes (4/5 in the ’09 Ryanair Chase).

So what is our conclusion? It appears that when the markets are extremely well formed, as they are for the principle races, then we can safely ignore any last minute price movements when it comes to aiding our selection process. But if you’re trying to solve the puzzle of the Grand Annual, Pertemps Final or such like, then it might be worth having a closer look at the pre-race market - there is likely to be a clue or two about!

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