Momentum and Sports Betting

21 Pages Posted: 16 Feb 2010

Date Written: February 15, 2010

Abstract

I document that momentum trading strategies are significantly profitable in an intragame NBA sports betting market. The momentum profits appear to be the result of market underreaction to news, but I find no evidence that the underreaction is driven by the psychological biases that form the foundation of existing behavioral models of momentum. Together, my results suggest that new theories of momentum might be needed.

Keywords: Momentum, Sports Betting, Underreaction, Regime-Shifting Beliefs

JEL Classification: D03, G14

Suggested Citation

Williams, Jared, Momentum and Sports Betting (February 15, 2010). Available at SSRN: https://ssrn.com/abstract=1553150 or http://dx.doi.org/10.2139/ssrn.1553150

Jared Williams (Contact Author)

University of South Florida ( email )

Tampa, FL 33620
United States

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