(re-posted from December, 2001)
In a nutshell, "Steam" is a term used to describe line moves motivated by large sums of "Smart Money" or "Unnatural Money", often a tell tale sign of inside information. It's a powerful handicapping tool when combined with expert steam analysis and money monitoring. However, it's also the most mis-understood and mis-used techniques in the industry. Allow me to expand.
To understand "Steam" you must first understand the origin of a pointspread (or moneyline), it's lifespan and it's behavioral patterns.
How is a line arrived at? Pointspreads and Moneylines are derived from Power Ratings. Some books have their own handicappers using their own power ratings, but most books rely on oddsmaking services like those offered by world famous oddsmaker Roxy Roxborough. There is a difference in opening numbers from book to book but usually within a 1/2 point due to standardized industry practices for arriving at pointspreads and moneylines. The most important point I can emphasize here is that these numbers are not released to reflect an expected game outcome, but solely to split the bet 50-50.
Why do Sportsbooks often open with different lines? Before a book releases their opening numbers, they do an analysis of their own customers betting trends. If their customer base is prone to betting "Over" or prone to betting the underdog then it makes sense for that book to adjust it's number in the direction it anticipates it's customers are likely to place their wagers.
Why does a line move? In a nutshell, lines move when more money is placed on one side than the other. This creates an imbalance in the bookmakers ledger and they need to make adjustments, moving the line against the money to make the other side of the bet more attractive. These are refereed to as "Money Moves", but most money moves are a result of "Natural" factors as opposed to the "Unnatural" factors which characterize a "Steam Play".
The other types of line movements are "Reactionary" and "Anticipatory".
Reactionary line movement results from a public reaction to a widely publicized event like an injury or trade. Reactionary line movement often creates "Value" plays on the other side, or "False Steam".
Anticipatory line movement occurs when the gaming industry gets wind of these types of circumstances before the public and adjusts their numbers in "anticipation" of heavy action one way or the other. From these types of line moves we often get the term "Trap Line" as an ill-informed public will eat up these too-good to be true lines only to find out at game time their superstar is a scratch, or the starting goalie is sitting this one out.
What "Natural" factors move a line? Lines move for a variety of reasons, MOST of which are "Natural" and have nothing to do with "Steam". This is one of the big misconceptions with the betting public. Lines usually move due to "Square" action in reaction to widely reported events. Injuries, low moral, a big win or loss last week are all reasons the general public may load up on one team over another, and when they do, books have to adjust their numbers to keep the bet split. This is the most common reason for line movement and it represents nothing more than a false confidence in circumstances that usually end up having little to do with the games outcome. Often mistaken for "Steam", even by pros, this type of movement, which we refer to as "False Steam" actually creates value on the other side. Those who blindly bet on the line movement, thinking they are betting the steam, know well that these plays often kill you by the 1/2 point, because they are actually "Value" plays disguised as Steam.
What "Unnatural" factors move a line? Now we get into the real Steam Plays, but before we do, there is one more wolf dressed in sheep’s clothing that line analysts have to be on the look for. It's the unnatural line movement which results from "Middling".
Good middling is the biggest enemy of any bookmaking establishment. A good middler essentially partners up with the book and eats away at the house vig. Middlers are a cancer for bookmakers and they also throw a twist into the art of the line analyst searching for true steam. You see, large betting syndicates will pound an early line to begin the process of line movement, only to bet the other side of the play late in the day and get the best number on both sides. The hope is that the actual score will land in the "middle" and the middler will cash both sides of his bet. He only need to cash one in 20 of these to break even and the average for a good middle is just over 1 in 7. Fortunately, to be a good middle one needs a significant bankroll, which narrows this group down to just a few large betting groups. Totals (Over/Undress) are usually the arena of choice for the middle, especially NBA Totals which can vary by as much as 5 points or more on a given day, leaving the middle plenty of room to ply his trade. Side middles are significantly less common. The pitfall for the steam layer here is that a middling group will bang away at an opening number, giving the appearance of an "Unnatural" money move when it is no more than a calculated middle. Another case of "False Steam".
Run this gammit and you are now left with true "Steam". True Steam can be categorized into two categories. "Early Steam" and "Late Steam".
Early Steam occurs when somebody with the means "knows" something, or "thinks" they know something. It's referred to as "Unnatural" line movement. Law Enforcement uses it. In fact, the College Basketball Scandals of 1951 were blown open due to gamblers with knowledge of the fixes getting sloppy and pounding the games early and often, causing sharp and unnatural line moves to tip off bookmakers that "the fix was in". These days, gamblers with good information are a lot more sophisticated. They spread their bets around the country using a complex network of beards and they are long term thinkers who don't try and score it all on one play. When the information they are basing their bets on is not necessarily unique to them, they get down "early" to get the best numbers before others with the privileged information move the line and they end up with a less favorable number. Even being conservative with their wagers, early bets in any kind of quantity moves the numbers due to the pool on that wager being sparse at it's opening. This is the most powerful type of Steam when it's identified early because the steam player not only utilizes strong information but he also gets the favorable number.
Late Steam is ultimately the best Steam. It's the same premise as Early Steam but the holder of this information is not concerned about the number. The confidence in the information ultimately outweighs the need for getting a favorable number and thus the holder of the info is not concerned about getting down early on this wager. In fact, the later he waits the better he is able to hide as the betting pools thicken up and his larger wagers are less likely to cause big moves in the line. Due to the nature of Late Steam, it is not as easily spotted and not spotted at all anywhere from 3 minutes to 3 hours before game time.
As you can see, there is a lot more to line analysis than blindly following line moves. Each line move must be carefully analyzed for it's origin, categorized and monitored. Finding the source of the money moving the line increases our knowledge about the move and finding the source of the confidence inspiring the money leads to ultimate insight.
Of course, it is impossible to know everything about every move on every game every day. It is equally impossible to say with 100% certainty the origin of every move. What we can do and what we have done is take line movement analysis to the scientific levels. In doing this we can and have time tested our theories and techniques and we continue to hone this often mis-understood field. At Steam Sports that is what we do and our documented long term record will further validate our efforts.
We invite you to join us as we make our Steam Reports available to the general public as well as a complimentary Early Steam selection and our premium Steam Plays on a daily basis.
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Tags: steam, line moves, steam plays