There are two kinds of winners during the Oscars 2014 night; the actual Oscar winners and bettors who predicted those winners correctly. No, it was not that hard to predict the winners. You just bet on the favourites. Even if you missed betting on Oscars 2014 the past few days, you still had time to bet, seconds before each envelope was open. It was like as if we knew the winner already.
Betting on Oscars is happening for years. It may not be the most popular betting market at the betting exchanges, but it draws plenty of attention due to the event’s popularity. Considering host’s historic tweet of a celebrity-packed photo that broke Twitter momentarily and set a new Retweet record for Ellen, the Oscar betting market would be even more juicy, if Americans were allowed to bet online.
— Ellen DeGeneres (@TheEllenShow) March 3, 2014
Still, plenty of money come and go on those betting markets. As money flows, betting odds fluctuate, drawing lines on betting charts. I managed to capture some of those and shared them at my social networks, as winners were being announced. In fact, I based my 2013 Oscar predictions on those very charts a year ago.
Let It Go won Original Song Oscar, 12 Years a Slave won Adapted Screenplay Oscar among others and Alfonso Cuaron was named Best Director. Can you spot a trend on those betting charts?
Indeed, odds are shortening all over the place. And they have done so since day one. I won’t go into the trouble of republishing the remaining charts. They are similar to the ones above. And this goes on to prove that the favourite-longshot bias is apparent in Oscar betting as well!
Why is that?
At first glance, one might doubt that. They might misinterpret the odds’ decline. After all, when odds are shortening, people are betting heavily, correct?
It depends. It’s more like smart money taking advantage of generous odds that still offer value. Why do those odds offer value though? Because, people are biased and bet on the longshot. That drives longshot’s odds lower and favourite’s odds higher. Or at least, keep them as high as before. Smart money jumps in and bet on the value odds. While people are betting on long shots, hoping for a surprise win and a big reward, sharp bettors pour money on the favourites.
Obviously, smart money is correct, judging by the Oscar 2014 results. As the night was drawing to a close, I didn’t notice any upset. All favorites won. Of course, that is why they are called favourites in the first place. Because, they win often. Yet, in Oscars case, they seem to win a bit more often than expected. And that is exactly why smart money is betting on favourites and come out as winners.
Eventually people imitate them. They replicate their moves. Now, sharp money and public money drive odds even lower. And that is what happened in the last few seconds in the case of Supporting Actress Oscar, awarded to Lupita Nyong’o.
Odds shortened from 1.60 to 1.30 during the last minute of the award announcement. And that is before the betting exchange suspended the market, about 1 minute before presenters came on stage with the envelope.
Another example is the Oscar for Leading Actor. Matthew McConaughey took that one, leaving DiCaprio empty-handed for yet another year. But notice the betting charts and what happened as the last bets were being matched.
It was like people could see through the envelope. DiCaprio’s odds skyrocketed from 5.00 to 12.5! And if you have been following my trading blog, you’d know that I would be screaming to place a lay bet on DiCaprio on that 5.00 support level!
Many of you might say that I speak after the results. True that may be, but can you afford ignoring the trend I am talking about here? There is a reason for that saying, “Trend is your Friend”.
Have you bet on Oscars 2014? Did you risk your money on long shots, praying for a big win, or did you play it safe and went with the crowd (and smart money)? Let me know in the comments below.