1. Open Access Kent State
  2. Learning, Price Formation and the Early Season Bias in the NBA
Author(s)
Abstract

We test the NBA betting market for efficiency and find that totals lines are significantly biased early each season, yet sides lines do not show a similar bias. While market participants generally force line movements in the correct direction from open to close, they do not fully remove the identified bias in totals lines. This inefficiency enables a profitable technical trading strategy, as the resulting win rate of our proposed simple betting strategy against the closing totals line is 56.72%.
Format
Article
Identifier(s)
10.1016/j.frl.2007.04.002
Publication Date
2007-09-01
Publication Title
Finance Research Letters
Volume
4
Issue
3
First Page
155
Last Page
164
Keywords
Subject
Rights
https://rightsstatements.org/page/InC/1.0/
Community
Department of Finance
Permalink https://oaks.kent.edu/finpubs/4
Baryla, E., Borghesi, R., Dare, W., & Dennis, S. (2007). Learning, Price Formation and the Early Season Bias in the NBA. Finance Research Letters. https://doi.org/10.1016/j.frl.2007.04.002
Baryla, Edward, Richard Borghesi, William Dare, and Steven Dennis. 2007. “Learning, Price Formation and the Early Season Bias in the NBA”. Finance Research Letters. https://doi.org/10.1016/j.frl.2007.04.002.
Baryla, E., R. Borghesi, W. Dare, and S. Dennis. Learning, Price Formation and the Early Season Bias in the NBA. Finance Research Letters, 1 Sept. 2007, doi:10.1016/j.frl.2007.04.002.