A popular Tennis trading strategy is laying the player up, with a view to this player losing their break lead, allowing us to create a profitable trading position.
The popularity of this trade centres on the fact that it is ‘laying low’, as the player who will be laid a break up will be trading at a significantly shorter price than at the start of the set. Therefore the tick loss from an unsuccessful trade is much lower compared to if this player was opposed at the start of the set instead. When a break deficit is recovered, the price will move back to a similar level to the start of the set.
ATP and WTA Break-Back Statistics:-
Top 100 ATP players lost a break lead 27.5% in the 12 months from February 2014 to 2015, and recovered a break deficit 29.2%.
Top 100 WTA players lost a break lead 40.9% in the 12 months from February 2014 to 2015, and recovered a break deficit 43.1%.
We can see that ATP players lose and recover break leads less frequently than the WTA, and this is completely logical given that WTA players have a weaker serve. The market is fully aware of this and the tick movement for a break is therefore bigger in the ATP than the WTA.
Entry and Exit Points:-
Typically, having entered at a break down, there will be a number of potential exit points for traders who have laid the player a break up, and a potential exit strategy should be considered prior to entry:-
1) A loss because the break-back did not occur – A full stake loss incurred if the player is a set and break up in the second set, or a break up in the deciding set. A red hedge if we lay the player in the first set and close our losing position at the end of this set.
2) A profit when the break-back occurs – We have created a profitable situation and we can clear liability, hedge for equal green, or split profit depending on statistics, or personal preference.
3) Player a break down gets to a scoreline such as 0-30, 15-40, 30-40, 40-A or 0-40 – These scorelines, particularly in the ATP, will generate some solid tick movement and risk-averse traders can look to clear some, or all liability, at these scorelines.
Similar to Soccer, time decay of a set is crucial. It is clear that a team that finds themselves a goal down in Soccer has less chance of equalising if there are five minutes left, as opposed to 85 minutes left, and the price in the markets will reflect this. Tennis is exactly the same, as logically a player who is a break down after the first game of the set has more chance of recovering this deficit than if they are broken in the latter stages of the set, and then their opponent is immediately serving for the set.
Previous statistical research which is available at http://www.tennisratings.co.uk/article—break-back-percentages-based-on-time-decay-break-back-stats and http://www.tennisratings.co.uk/article—wta-break-back-percentages-based-on-time-decay-and-break-back-percentages illustrate that a player’s chances of recovering a break deficit decrease as the set continues to progress to completion.
Picking Players to Lay:-
Unfortunately picking players to lay a break up is a little more complex statistically than just picking out bad servers…
Naturally, certain players are very vulnerable when a break up – the likes of Annika Beck in the WTA and Filippo Volandri in the ATP have atrocious stats for giving up leads – but to get the most value from this trade, it’s useful to find players who are ‘less obvious’ than these players with bad serves – players that the market does not expect to be as vulnerable when leading by a break.
Conversely, laying players who are a break up against elite players is also quite an obvious entry, and the market will be expecting the likes of Rafa Nadal and Serena Williams to recover deficits against mediocre opponents. With this in mind, there is a high risk and low reward laying players a break up in obvious situations and therefore laying players a break up against elite players should be very carefully considered before entering.
Due to the complexities of picking players to lay a break up, I create a daily spreadsheet which covers all scheduled ATP and WTA matches. This spreadsheet contains several metrics to pick out players who should be vulnerable a break up. Following this, I can then filter to attempt to find out some less obvious spots that the market will not expect.
1) Projected hold percentage, focusing on players with percentages 5% or greater below the surface mean for the relevant Tour. This figure will be generated due to either the player being a bad server and/or their opponent a good returner. In addition to this, I also factor in court speed, which can affect an individual match-up projected hold by as much as 10% from the fastest courts on Tour to the slowest ones. Naturally, slow courts provide less advantage to the server, and therefore boost the chances of breaks in the match.
2) Combined score analysis. I have up to date percentages for the break lead loss and break deficit recovery for over 100 players in both the ATP and WTA Tours and can compare the statistics to the Tour averages to work out situations where a player is more likely than average to lose a break lead.
If a player’s projected hold is below average, and the combined score of them losing a break lead and their opponent recovering a break deficit is above average, then this indicates a player who should be significantly more likely to lose a break lead than average. This data then enables me find opportunities to lay these players when they are leading by a break.
This article should provide a solid grounding in a very popular entry point in Tennis trading, and hopefully will inspire readers to do some further research to find the best situations for laying players a break up in a Tennis match.