Valuation of soccer spread bets

A D Fitt, C J Howls and M Kabelka ()
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A D Fitt: University of Southampton
C J Howls: University of Southampton
M Kabelka: University of Southampton

Journal of the Operational Research Society, 2006, vol. 57, issue 8, 975-985

Abstract: Abstract Simple statistical and probabilistic arguments are used to value the most commonly traded online soccer spread bets. Such markets typically operate dynamically during the course of a match and accurate valuations must, therefore, reflect the changing state of the match. Both goals and corners are assumed to evolve as Poisson processes with constant means. Although many of the bets that are typically traded are relatively easy to value, some (including the ‘four flags’ market) require more detailed analysis. Examples are given of the evolution of the spread during typical matches and theoretical predictions are shown to compare closely to spreads quoted by online bookmakers during some of the important matches of the EURO2004 tournament.

Keywords: sports; gaming; recreation; finance; statistics (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (3)

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DOI: 10.1057/palgrave.jors.2602062

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