How to Profit From Laying the Draw in Test Cricket

Cricket is probably my favourite sport for trading, because of the price swings it produces and because I find it relatively easy to 'read'.
In a five-day Test match we can see wonderful price swings between all three possible outcomes with the natural fluctuation of a competitive Test.
But while most trades in a Test match will be reactionary, based on the position of the game, the odds and what you feel will happen next, there is a pre-match move that I make on almost every Test that is proving to be very profitable, and that is laying the draw.
Five-day cricket has changed significantly in recent years and it is continuing to evolve at a great pace, but I don't believe that draw backers have evolved with the game, and I would say that the draw is priced incorrectly on Tests at least 50% of the time.
Looking at the stats for drawn Test matches shows us how the game has changed.
In the 1980s there were 122 drawn Test matches from 266 played, which equated to 45% of matches being drawn.
In the 1990s there were 347 Tests, with 35% (124) drawn, and in the 200s there were 464 Tests with 24% (114) drawn.
At the start of 2010/11 there was a run of draws, and the figure for this decade is 27% of matches being drawn at the moment.
But for me a greater indication is the last 28 Test matches, not including the current one in Colombo, of which only four (14%) have been drawn.
Of these only one was a bore draw, with Sri Lanka and Pakistan scoring slowly in Sharjah and a result never really looking likely.
Of the other three, one was the thriller between India and the West Indies in Mumbai, when all three results were still possible with two balls of the match to go. Two results remained possible from the final ball, but in the end the match was drawn, with India one run short of victory and West Indies one wicket short of victory.
In the recent New Zealand-South Africa series, the first Test in Dunedin was drawn after the weather got in the way, with 113 overs lost, and the final Test finished as a draw after a plucky display by New Zealand on the last day.
That Test almost produced a result despite more heavy weather interruptions. The draw was as short as 1.20 after the third day, but at one point on the final day New Zealand were 82-5, effectively six down as Ross Taylor couldn't bat, but managed to survive.
In this match South Africa scored at 6.4 runs per over in the second innings for 30 overs, a rate of scoring that would not have happened in Tests 15 or 20 years ago.
So of those four drawn Tests in the last 28, two were draws where results were still very possible late on the fifth day and on both occasions a substantial profit could have been made by laying the draw before the match begun.
So often the price pre-Test on the draw is still somewhere between 2.5 and 4.0, depending on the teams playing of course, yet the statistics would suggest this is far too short. Even if a match does finish as a draw there is a good chance the draw will trade higher, and perhaps significantly higher, during the course of the five days.
All this leads us to the question of why the game has changed so much.
The first issue is run-rates. The advent of Twenty20 cricket has increased the scoring rates in the 50 over game and in Test matches. Batsmen are used to playing more aggressively and now have a more varied range of shots.
By playing Twenty20 cricket so often they find it easier to switch to attack mode, as shown by South Africa's second innings in the third Test against New Zealand.
The next factor is the introduction of the Decision Review System (DRS), which has changed the way everybody thinks about the game.
Umpires are now far more confident giving LBW decisions, especially to the spinners, and decisions given these days would never have been out even five years ago. That means matches are moving at a faster rate and more wickets are falling than ever before.
The number of drawn Test matches has fallen from 45% to 25% in the space of 20 years, and I think it will fall a bit further yet, and that is why I will continue to lay the draw as a starting point for almost all Test matches, providing the weather forecast is good.

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