The Implied Volatility of a Sports Game

Abstract

In this paper we provide a method for calculating the implied volatility of the outcome of a sports game. We base our analysis on Stern’s stochastic model for the evolution of sports scores (Stern, 1994). Using bettors’ point spread and moneyline odds, we extend the model to calculate the market-implied volatility of the game’s score. The model can also be… (More)

Topics

5 Figures and Tables