Well I'm sure by now that every trader will have heard about the miraculous 1.01 gubbing that Rafael Nadal took at the Madrid Open. Whilst 1.01 is over-turned quite regularly in tennis, this one was a true shocker. Firstly, Nadal was 5-2 up in the final set. Secondly, he was on his favourite surface, one very few have ever beaten him on. Thirdly, he was in front of his home crowd in Spain. Finally, he was playing Fernando Verdasco, a guy he'd beaten on each of the 13 times they'd met previously.
Putting aside the fact that the blue clay obviousy put Nadal out of his comfort zone, this was a comeback that no one could have expected, probably least of all Verdasco himself! I've said before on this blog that Verdasco is one of the few players who has the game to beat Nadal. Ok, he's never done it before but he has come very close in the past. And out of everyone, Verdasco is the closest in style to Nadal. So I'm not that surprised that Verdasco won the match but was certainly surprised that he came back from a double-break down to win. So much so, that at 5-2, I actually switched off! I certainly wasn't one of the 1.01 layers which took millions of pounds from that win.
I have to say though, out of all the matches to choose to lay 1.01, I don't understand why anyone would have picked that one. Laying 1.01 on every tennis match will get you nowhere long term, so you have to be selective and randomly laying Nadal serving for the match will definitely put you in the red eventually! Nadal plays roughly 80 games every year. If you lay 1.01 for £100 on every game he hits 1.01, you'd only need to hit one winner to profit. But let's face it, how often would he lose a match where he traded at 1.01 in an average season? I can answer that - hardly ever. He only loses to Djokovic, Federer or Murray usually and his price will only hit 1.01 when he's actually won the match in most of those occasions (unless he had a massive lead in the final set, in which case, he almost certainly would win). It's a non-starter as a strategy really. Plus, you'd need to have some balls to have let that Verdasco trade run through to the end of the match for the full green. I doubt many people did that.
But there is no doubt that the occasional 1.01 lay with well selected matches, can reap big rewards. The real value, in my opinion, was in laying Nadal in that first set. He was about 1.04 at the start, so a choice between laying SP or laying 3 ticks better when Nadal is serving for the match, I know which one makes most sense to me!
I have to admit, my tactic was always to back Nadal at a better price but in my opinion, Nadal's price was NEVER value at any point in that match. OK, you can ask why I didn't lay Nadal as there was clearly some value there but there's a simple reason for that; I don't trust Verdasco! I actually hate him as a player and he's just far too unpredictable for my liking. I prefer to be on players who are easier to read. Nadal's price did rise, so my plan worked but was only 1.35 to back after losing set 1 - quite obviously a terrible price, so I didn't get involved. He didn't go higher than that until he was pegged back in the final set. So I saved myself a lot of sweating by not getting involved. Of course, many traders will have greened up at 1.01 after backing at 1.35 but I can guarantee you that many won't have (and why would you? He was 5-2 up!). But for such a poor risk-reward ratio, why even put yourself in that situation? There are very few match-ups where I would even consider backing a player below 2.0 when a set down, never mind 1.35. But it's Nadal on clay and this fact blinds a lot of traders, who can only see 'easy' money. Well if this gubbing to end all gubbings doesn't sway those backers into a different way of trading, nothing will.
OFF-COURT BEAUTY World number 70, Michaella Krajicek of the Netherlands: