Advent of Alpha Day 5: Latency Arbitrage

“Latency Arbitraged” is a fancy name for court-siding.

Court-siding got its name because the first sport where this got a lot of traction was tennis, where young fools were paid to turn up to events all over the World with a mobile phone and to hit the buttons as a point was scored, many, many seconds before the official score was updated - enough to beat in-play delays on exchanges. I’ve read books by people who did this that made me think it’s a hard, dangerous and horrible way to make a living (tennis authorities do not like it, and local law enforcement have been alleged to get creative about stamping it out).

I’ve seen rows of laptops out in the stands at Lingfield, and heard about the odd box being taken too. Ascot is regularly buzzed by drones, to the point where Sky Racing is lampooned by some fans for not having got rid of the delay the way Racing TV has to make all of this unnecessary.

I’ve been at football matches where I’ve realised TV pictures were at least 8 seconds off - enough, if you’re quick, to have some profitable fun with it - and of course the entire point of the TPD feed is that you’re getting positional data you can trade on before the people at home know what is going on, without needing to suffer the indignity of being sat in a white van around the back of Chepstow race course.

There are a lot of angles here, from expensive data sources that might be faster than cheap data sources, to turning up and betting with your eyes.

I think for most people the idea of investing money in data or time in turning up somewhere puts them off - it’s easier to look for things you can do for free at home - but that might in itself make it more available to exploitation for longer than other methods.