Buy Low Sell High Strategy for NFL Handicapping

More than two years ago in December of 2015 I wrote an essay as a freelancer. The topic was “Bitcoins – currency or venture?” At the time, Bitcoin had a price of $400. I wrote about the advantages like efficiency and anonymity but also about all the risks. I realized it could be a widespread future currency but by no means I could have imagined how far it would go.
Bitcoin has been very well aware in financial and even general news over the past four months. If you bought one single Bitcoin on February 13th in 2017 and sold it on December 16th the same year, you would have made a profit of $18,339 as the price jumped from $996 to $19,343. You would have bought Bitcoin at a low price and sold it at the highest possible price. Your action would have been a prime example of the “buy low, sell high” strategy.
Technically, “buy low, sell high” is an adage out of the financial industry, specifically connected to stock investing. It is a strategy of taking advantage of the market’s perception to overreact to downside and upside trends. The goal is to take something when the price is down and ditch it when the price is high. This strategy can also be applied to sports handicapping. Each game presents different markets for different betting options, e.g. moneyline, spread or totals. To cut a possible long story short: the market sets the price on the moneyline, the spread and the total. When the season starts, each team has a certain market price or spread value. Depending on results and other circumstances such as injuries, the spread value increases or decreases and market perception shifts into either direction. As a bettor, our general goal is to identify discrepancies between the market prices and the results of our own handicapping process to find these buy low or sell high spots. We want to “buy” undervalued teams and “sell” overvalued ones, which means playing or fading them.
That sounds very easy, doesn’t it? Not so fast, my friend!

Difficulties of buy low / sell high on sports handicapping

One of the biggest aspects of investing, whether it is sports handicapping or stock investing, is psychology. We bet with emotions. Most of the people understand the pure logic behind buying something at a low price and selling it at a high price, but that’s not what our biases tell us to do. In sports handicapping we tend to fade a team that is losing and whose price (spread) is falling. When a team is playing well and winning comfortably, we want to get a piece of the cake. We don’t want to miss out on the hot team and don’t want to have anything to do with the cold team. It doesn’t “feel” right to go against a “good” team or to take a “bad” team.
“Buy low, sell high” is also extremely difficult to execute. In hindsight it is always easy to tell which price has been low or high, meaning which team was under- or overvalued at the time. But at the moment, it is highly challenging to identify buy low and sell high opportunities. Very often you will find situations in which teams trend upside or downside but they keep trending into either direction. What looks like a high spread the one week may look like a low spread a few weeks later. So bettors who tried to approach the “buy low, sell high” strategy get punished.
The key is to identify whether the shift of market perception is driven by the fundamentals of the game or solely by emotions. How to identify it? Disappointing answer: there is no recipe for it. If you want to get an advantage from that strategy consistently, meaning you win more than you lose, a lot of things need to come together. You got to put in the work. Sports betting is a job and it is hard work. Some handicappers need to spend more hours than others to be successful in the long run. You need to study teams and players to understand matchups. You need to actually watch the games to understand how games have played out and what exactly leads to certain results. You also need to build up some experience to establish situational awareness and identify patterns. If you do your homework, you will be able to identify “buy low, sell high” spots properly more often than not. It’s basically a tool that should be on your betting arsenal.

Examples from the 2017 NFL season

Amongst others, there was one game during the 2017 NFL season that stood out as one of the prime examples for a buy low sell high spot. The Denver Broncos opened the season with two home games – they won a close one against the Chargers and blew out the Cowboys 42-17 in a game they looked unstoppable in. Media praised them. In the meanwhile, the Bills won against the Jets and lost a low-scoring affair at Carolina in which they had a chance to win but rookie WR Zay Jones couldn’t haul in a touchdown pass on fourth down when he was wide open. Broncos traveled to Buffalo as -3/-3.5 favorites to play an early east coast game. My pre-season line for that game was Bills -0.5, so basically a pick’em. Yet because of two results the market set the line at Bills +3 and +3.5 at some places. It was a great opportunity to sell high on the Broncos.
Another game comes to mind: the week 11 matchup between the Rams and Vikings at Minnesota. The Rams were just coming off three straight blowout wins with the most recent being against the Giants and Texans, two teams holding a top-4 pick in this year’s draft. Well the Texans don’t hold a pick actually. The Vikings were coming off five straight wins but they were also coming off a rusty road game at Washington in which Case Keenum looked really sloppy. The Vikings weren’t getting national attention yet, but the Rams were. That led to the Vikings being favored by just two points on their field where they have a strong advantage. The line said the Rams would be favored by 1.5 or 2 points on a neutral field and it didn’t make sense at the time. It was a phenomenal buy low (Vikings) and Buy Low Sell High Strategy For NFL Handicappingsell high (Rams) situation. The Vikings won 24-7.

What other handicappers think

I wanted to know how other NFL handicappers approach the “buy low, sell high” strategy, so I asked the great guys @whale_capper and @AndyMSFW who also run the Deep Dive podcast which you absolutely got to check out. Here are three questions and their respective responses.
How much do you focus on buy low sell high spots when it comes to NFL handicapping?
Whale: I find it to be a strong indicator of line value and while it’s rarely the only reason I’ll back a side, if I can support it with other matchup advantages or situational factors then I’m in.
Andy: Buying low / selling high is one of the cornerstones of situational handicapping, but it must be combined with common sense. People that “auto bet” things, drive me nuts. Even if it is a 55% system in the long run, it could be honed into a 60% system with a little more though.
What are your keys to make successful use of that strategy?
Whale: In my opinion, the sell high is more reliable in general. Sometimes losing is contagious – see the Cleveland Browns – and as they say in the world of investing, “it’s hard to catch a falling knife”. As noted above, “buy low sell high” is most effective when it is also supported by specific match up advantages, key injury effects or situational factors like difficult travel.
Andy: I agree with whale, selling high is often more effective than buying low. A good situational spot for a team (rest/travel/injuries/general matchup) coupled with the opponent coming off of a big “statement win”, perhaps even a big win on a nationally televised game, can result in several points of line value.
What has been your favorite buy low sell high spot of the 2017 season?
Whale: My favorite buy low sell high spot was week three selling the Denver Broncos at Buffalo; Denver had been at home for a month, came off a widely watched beat-down of Dallas to go 2-0, then traveled to a hungry Buffalo team with a good defense and were significantly over-valued at -3.5 (!?!). I wasn’t on the right side but Steelers/Chiefs has been a pretty perfect example, too.
Andy: My favorite was the Eagles going down to Los Angeles in week 14. The Rams had just beaten the red hot Saints and then gone to Arizona and won by 16. The Eagles had a deceiving 24-10 loss in Seattle where they lost the turnover battle 0-2 with one being a fumble at the one yard line. I was very excited to back the Eagles at a pick’em in this spot and it paid off.

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