Of all the markets I trade, the Eurovision song contest has to be one of the daftest, from a number of perspectives.
Even if you are not watching it, you should take a look at the Eurovision market this evening. It can throw up some interesting opportunities from a betting and trading perspective.
When I started betting on Eurovision markets
I first came across this market from a Betfair trading and betting perspective in 2006.
Finland was the winning country that year with the real shock to the system with the group Lordi. I took one look at how much money was betting traded that year and it’s always drawn me back to it each year.
Market turnover and trading conditions
The Eurovision can be surprisingly liquid and turnover seems to be growing year on year. Last year it reached £6.5m and it’s already approaching £5m this year.
Driven by sentiment initially, the market moves slow and deliberately. This occurs from the early stages into the qualification for the final, then into the final itself. When the voting starts all hell is let loose.
But the general pattern of behaviour a long way out is for the market to be driven by news flow. There are so many groups each one is look for a story to propel themselves into the limelight and if they get there, the odds are sure to follow.
For many years the voting was very political and predictable. Given the UK’s two-finger salute to Europe, our relationship with the contest tanked after Brexit. Katrina and the Waves winning entry is a distant memory for the UK. But brighter times no doubt await.
But, excluding the UK, geographical and political biases still exist in the contest.
After declining towards a farce, the contest decided to reform the public votes to make it a jury and televoting split. But it turned out that this just made the market volatility even more extreme than before.
While that makes the contest a bit random, that’s more or less exactly what you want from a trading perspective.
As discussed above, news flow will determine the favourites of any particular year. But there are other opportunities in the contest.
When the music starts the market starts to wobble based on the individual performances you see. This makes the market just after a song is played a good place to lurk for very short term trading opportunities.
When the voting starts you can also jump on some broader moves, but make sure you abandoned the temptation to nip in and out with small trades. The moves will be big and sharp when those votes come in.
I’ve done well by backing outsiders that shorten during the contest in the past and early voting patterns can often give you the ability to dutch a range of long odds into shorter prices. Don’t leave it too late to get out though, as winners can become apparent very quickly and will shorten fast.
As I’ve stated above the Jury & Televoting patterns can create some really odd markets, so watch out for the timing and release of this information, thrown it with a bit of political voting this can really shift the markets about. There was some excellent analysis done in 2016 which looked at these patterns and it concluded, hilariously, that the judges on the jury misread individual voting intentions almost perfectly. So you can safely read nothing into the jury points. The correlation was just 0.01!
Hints and tips
I have already highlighted geographic and political bias as one aspect of the competition and the lack of correlation between individuals and their country judges. Hopefully, the trading tips will give you some hints as to how to profit. But if this is your first time, then tread carefully while you learn how this unique market works.
But one of the increasingly good lead indicators now of the competition is social media.
YouTube and Twitter will be flush with content applicable to the contest and it’s increasingly providing a good steer on the televoting outcome. So my top tip is to focus in on that if you want to get ahead of the voting. Of course, this is Eurovision, so anything can happen so its’ always worth having a bit of money on exactly that occurring.
So I’ll be tuning in again to watch the competition this year and, hopefully, I will get more than ‘null point’ in profit terms.