Just had this in from Adster over at prematchtrading.com concerning currently very under utilised aspect of Football Trading, Draw Inflation.
Over to you Adster......
We are finding there are more and more games where we can take advantage of via Shirley (our price misalignment software).
These include :
• We're trading the Match Odds so we get matched almost immediately.
• Liquidity is better in Match Odds than any other market.
• Even lesser games we wouldn't normally touch due to lack of £££ we can get involved in and nick a few ££££ allowing more flexibility and trading opportunities aside the big live games.
• Those with less time can jump on these, make their green and move on very quickly.
• Shirley tells us exactly what the draw Inflation is, making this an even more powerful tool.
• Liquidity is better in Match Odds than any other market.
• Even lesser games we wouldn't normally touch due to lack of £££ we can get involved in and nick a few ££££ allowing more flexibility and trading opportunities aside the big live games.
• Those with less time can jump on these, make their green and move on very quickly.
• Shirley tells us exactly what the draw Inflation is, making this an even more powerful tool.
The majority of football models are based on the poisson distribution and so is Shirley - a heavily modified poisson model which allows for teams correlation and leagues specific corrections.
Historically poisson models have been predicting draw outcomes to occur less often and the error has been around 10%, therefrom the draw inflation - inflating/increasing the probability of draws and of course draw scores 0-0/1-1 etc.
Historically poisson models have been predicting draw outcomes to occur less often and the error has been around 10%, therefrom the draw inflation - inflating/increasing the probability of draws and of course draw scores 0-0/1-1 etc.
What is too high/low then?
That's relative, anything between 5-15% is alright but if you see an inflation around or below 0% that would be low, respectively an inflation above 20% would be high, in some Italian B games however draw inflation's have been as high as 200%, those games in which the draw trades around 1.50 at KO 
What to do when we spot a low inflation?
The inflation depends on match odds and total goals so there are a number of scenarios:
• match odds remain the same, u2.5 drifts
• draw steams, dog drifts, u2.5 stays the same
• draw steams, faves drift, u2.5 steams
• draw remains the same, dog drifts, u2.5 drifts
• draw steams, dog drifts, u2.5 stays the same
• draw steams, faves drift, u2.5 steams
• draw remains the same, dog drifts, u2.5 drifts
and quite a few more of these...
A trade that would win in most cases - back the draw and lay the dog, if you could get matched laying/backing at back/lay prices that would be best.
For high inflations - the opposite - lay draw and back dog.
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