Sela vs Arguello - Perfect Market Manipulation?


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Yesterday (15th July 2014) evening I was alerted to extreme market movements regarding the match between Dudi Sela (Israel, world rank 98) and Facundo Arguello (Argentina, world rank 119) in the ATP 250 event in Bogota.

The match features one of the biggest price movements in recent memory, with many bookmakers actually pulling the match from their websites.  

When I sent out my Daily Spreadsheets, I priced Sela at 1.68 with Arguello at 2.47, so there was value on the Argentine at that point, according to my model.  Sela tends to be treated badly by model, with a poor service hold percentage and horrific break point stats.  Having said this, Arguello doesn't have a huge surface sample on hard courts, and certainly not at this level so the stats weren't as reliable as if the match was played between two tour regulars.

At that point (around 8am GMT) the best market prices were 1.43 on Sela and 3.34 on Arguello and there was no hint whatsoever on what was to occur later in the day...

Dudi Sela opened as a strong favourite against Facundo Arguello...

The Bet365 historical odds make incredible reading - Sela opened at 1.40 and by around 5pm GMT had drifted slightly to around 1.50.  Nothing untoward there.  However, by around 6:30pm he had moved above evens and at around 9pm touched 3.00!  To put this into context, it involves a swing of over 38% in implied odds (71.4% at 1.40 and 33.3% at 3.00).  

This is one of the biggest swings I can remember - another one that stands out is the match in March 2013 between Nikolay Davydenko and Alexandr Dolgopolov where Dolgopolov opened at 1.73 and closed at 3.26 (27.1% implied odds shift) and then won in straight sets! 

To put this into further context, I previously have done drift analysis of the 2012 season.  Nothing came close to Sela/Arguello for drifts, with just two matches having over 20% swings in them - Victor Troicki (1.50 to 2.37 on the grass of Halle and won) against Benjamin Becker and Nicolas Mahut against Gael Monfils.  In that match it was Monfils' return to tour from an absence and Mahut opened at 1.68, closing at 3.48.  

Another match worth mentioning is the Sela vs Igor Andreev match in Los Angeles which some people have discussed on Twitter in the last 24 hours.  In that, Sela opened at 1.80 and closed at 2.51, and the 15.7% implied odds drift ranked that match 16th biggest opening/closing drift in the 2012 season.

As it happened, prior to the match, there was a big shift back in the favour of Sela and he traded at odds-on again pre-match...

Facundo Arguello's odds shifted from heavy favourite to heavy underdog prior to the match...

I mentioned above that the Sela/Arguello match has been discussed in great detail on Twitter and there's been a lot of speculation (I hasten to add, not from me!) that the match was fixed.  I said on Twitter prior to the match that there are a number of possible explanations and that jumping to that conclusion was pretty irrational.  We've seen above in the Dolgopolov and Troicki examples that there can be an insane drift in a player and they still win.  A lot of money was matched pre-match, but that doesn't necessarily mean anything - when there's odds movement like this, that's always going to happen.  

It is my personal belief that this match was absolutely legitimate and not fixed in any way, shape, or form, and I absolutely stress that in the extreme.  

What I believe happened was the following...

A syndicate or high stakes gambler/trader targeted the match for the following reasons:-

1) It was a low-profile event - therefore liquidity will be lower than a high profile event.  Bogota has one of the worst fields (by ATP ranking) of all main tour events.
2) The match was originally not due to be streamed - therefore liquidity was low.
3) The match was scheduled in the late evening European time - again making low liquidity fairly likely.
4) Arguello is very 'unexposed' on hard courts at ATP level and it's tough to gauge his level on the surface on the main tour.

This creates a perfect storm where there is a match with little interest and low liquidity, where it's much easier to move prices.  Imagine the amount of money it would take to do this for the Wimbledon Final, in contrast...

All the money was piling on the heavy opening-price underdog, Arguello, and this forced his price from around 3.40 to 1.35, pre-match, at one point.  At this point, it can be assumed that if my theory is indeed true, the syndicate/trader has a big position on Arguello at an average back price of above evens - all they'd have to do is back him to around even money and then let the market 'sheep' take over and force the price to be heavy odds-on.

This definitely happened.  Twitter was awash with speculation regarding the match with people even commenting that 'they'd missed out on the ride' when Arguello was cut to his shortest price.  With so many people convinced there was something untoward with the match, there must have been someone with a pre-arranged plan to move his price back up so significantly.  

Then, the syndicate/trader does a full reverse on Arguello, laying him at odds-on (or backing Sela at big prices) creating a situation where Arguello's price moves back up and he can hedge his book superbly with huge profit on either side before the match starts - so no matter which player wins, he is guaranteed to win.  In essence, this is perfect market manipulation and nothing more than that.

This theory is something I've mentioned to several people previously as something I'd like to give a go but I've never been able to do much about it, naturally lacking the required half a million or so that it's likely to be able to manipulate the market in this way.  

I suppose the only way to finish this article is to say that if you have a lot of money and fancy a chance of making a lot more - and causing a great stir amongst Tennis bettors on social media - then give me a shout and I might be able to help...


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