Why Participant Types Matter for Analysis
Not all market activity is equally informative. Understanding *who* is moving prices helps us weight different signals appropriately in our models.
When I started analyzing odds data, I treated all price movements the same. Big mistake. A 10-cent move caused by recreational volume tells you something different than a 10-cent move caused by a single large participant.
The Two Main Categories
Recreational Participants ("Public")
- Smaller individual transaction sizes
- Tend to favor popular teams and favorites
- Influenced by recent results and media narratives
- Volume is high, but individual impact is low
Sophisticated Participants ("Sharps")
- Larger transaction sizes
- Rely on quantitative models or deep expertise
- Often find value on less popular sides
- Can move prices with single transactions
Why This Distinction Matters for Models
At OddsFlow, we try to decompose price movements into their sources:
Information-driven movement: When sophisticated participants act, prices often move toward true probabilities. This movement is informative.
Volume-driven movement: When recreational volume accumulates on one side, operators adjust prices to balance exposure. This movement may *not* reflect new information.
Reverse Line Movement: A Key Signal
One of our most reliable features: when prices move *against* the side receiving most public attention.
Example scenario:
- Opening: Home 1.90 | Away 1.90
- 70% of visible action on Home
- Price moves to: Home 2.00 | Away 1.80
Despite public preference for Home, the price moved against Home. This often indicates sophisticated money on Away.
We track this discrepancy as a feature in our models.
Practical Application
When analyzing odds movement, ask:
- 1Is this move driven by volume or information?
- 2Does the direction align with public preference?
- 3How quickly did the market react?
These questions help extract signal from noise.
📖 Related reading: Odds Movement Analysis • Steam Move Detection
*OddsFlow provides AI-powered sports analysis for educational and informational purposes.*