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Identifying Investor Sentiment from Price Paths: The Case of Football Betting

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  • Avery, Christopher
  • Chevalier, Judith

Abstract

We examine the hypothesis that sentimental bettors can affect the path of prices in football betting markets. We hypothesize that sentimental traders follow the advice of false experts, believe excessively in momentum strategies, bet excessively on teams that are well known and covered in the media. We generate proxies for these sources of sentiment and show that point spreads move predictably over the course of the week, partially in response to variables known prior to the opening of betting. We show that a betting strategy of betting against the predicted movement in the point spread is borderline profitable. Copyright 1999 by University of Chicago Press.

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  • Avery, Christopher & Chevalier, Judith, 1999. "Identifying Investor Sentiment from Price Paths: The Case of Football Betting," The Journal of Business, University of Chicago Press, vol. 72(4), pages 493-521, October.
    • Handle: RePEc:ucp:jnlbus:v:72:y:1999:i:4:p:493-521
    DOI: 10.1086/209625
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    References listed on IDEAS

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