I thought I had a eureka moment yesterday. I was studying greyhound data over this last 6 days using racing post data. I was interested in what would happen if you layed all dogs i.e. being the bookmaker - after all Betfair is sold as "you can now be the bookmaker".
I calculated that if you lay all the dogs in each race for the period 2/27/10 to 3/5/10 for every race for stakes of £10 per dog that you would have made a profit of £19,316.98. At this point I burst out laughing - unfortunately I have yet to make any profit from Betfair so I took this with a pinch of salt and thought OK lets try it out.
Naturally enough I started to make some money and then as usual it was all wiped out and I started losing. So what was the problem?
Well Betfair odds are much higher than the bookmakers (which is good if you are an outright trader not so if you are trying to be the bookmaker). If you look at the bookies, their odds are usually decimal odds 6 to decimal odds 3 for the dogs. There are instances where the odds can reach decimal odds 10
but not often. Each race usually has 6 dogs (i saw one where there was only 5 but lets assume 6) the P&L can be worked out:
P&L = Sum of the lay wins minus lay loss
P&L = (Number of lossers * Stake) - ((DecimalOdds -1) * Stake)
This means if a dog wins at decimal odds 3 the P&L would be:
P&L = 5*10 - ((3-1)*10)
P&L = +30
(ignore betfair commission for the purposes of these examples makes the math easier)
decimal odds 4 P&L=+20
decimal odds 5 P&L=+10
decimal odds 6 P&L=0
decimal odds 7 P&L=-10 etc etc
The winning odds I used were listed on racing post at the bookmaker odds. Most of the winners were at odds 6 and below although there are ones at 9 or 10.
However with Betfair the odds were much higher for outsiders the odds can go up to decimal odds 20 and this is the reason why I started going into losing figures - when outsider wins it killed my profit. Unfortunately with Betfair the odds are often split between 3 dogs above the decimal odds 6 threshold and three below.
However at the bookmaker odds very often all six dog odds are at 6 and below - they are in the win win scenario for laying which explained why there was a massive profit and more importantly why you can not lay all the dogs at Betfair odds.
Being the bookmaker Eureka Moment - may be not
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dan_payne182
- Posts: 93
- Joined: Wed Oct 28, 2009 3:46 pm
- Location: Nottingham
I haven't looked into it too much on betfair as surely any over rounding of the book could be done by a computer, therefore the market will be corrected instantly. And even if you make a program to do so i presume you'd be competing against other programs bidding for the same prices. I've seen first hand programs implementing trading strategy's profitably, but never a program that succesfully makes a book.
I'm wondering if Peter or any of the pro traders on here have one? or attempted one?
I'm wondering if Peter or any of the pro traders on here have one? or attempted one?
Hi,
I agree Dan. I haven't spent too much time particularly trying to make a book on BF but I've been a member of BF for years and have written many many similar systems. One thing I have learned is that Betfair is the ultimate self levelling playing field. Almost everything you do with any half sensible system comes out as a either a long term slight loss or if you're lucky a long term slight profit. Take off BF's commission and you're sat on a loser.
As an example, to the uninitiated it might seem to be 'free' money if you could back a horse a few feet from the finish line. Even if you only got a price of 1.03 or so who cares when you have a strike rate of nigh on 100% right? Wrong, the occasional times when the result gets turned over by stewards enquiry will kill you. It's the same for almost every other scenario you can imagine. For every great find you make there will be an approximately equal 'great negative'
The ONLY way to get around this is to use bankroll management and compound your winnings if you are lucky enough to find a profitable system. If you do this there is good money to be had.
Cheers
I agree Dan. I haven't spent too much time particularly trying to make a book on BF but I've been a member of BF for years and have written many many similar systems. One thing I have learned is that Betfair is the ultimate self levelling playing field. Almost everything you do with any half sensible system comes out as a either a long term slight loss or if you're lucky a long term slight profit. Take off BF's commission and you're sat on a loser.
As an example, to the uninitiated it might seem to be 'free' money if you could back a horse a few feet from the finish line. Even if you only got a price of 1.03 or so who cares when you have a strike rate of nigh on 100% right? Wrong, the occasional times when the result gets turned over by stewards enquiry will kill you. It's the same for almost every other scenario you can imagine. For every great find you make there will be an approximately equal 'great negative'
The ONLY way to get around this is to use bankroll management and compound your winnings if you are lucky enough to find a profitable system. If you do this there is good money to be had.
Cheers
In a book I am enjoying very much at present, "Alex's adventures in numberland", I found a practical example in blackjack of the relative importance of betting strategies (money management) compared to playing strategies (like card counting). One of the big names in blackjack, Ed Thorp, thought that betting strategies may be two to three times more important than playing strategies. Would any of the experienced, successful sports traders agree and for which sports?
Hi Nick,
I have run a betting system (it either backs or lays - never both) for several years and the whole premise of the system is built around money management.
Without a betting strategy the system has a slightly positive expectancy (which it needs to have, even the best money management can't create a winning system from rubbish) but would barely be worth betting unless using huge stakes.
With a betting strategy in place the system can deliver double digit ROI over the long haul. I can set the betting strategy based on my appetite for risk and comfort with high variance and big down swings. To calculate these factors I run simulations over millions of hypothetical races in Excel.
Even running very passively the system will deliver around 30% more gains using money management rather than none so I definately agree that a betting strategy is absolutely vital, but only once you have a system that you are confident is +EV.
Regards,
Wil
I have run a betting system (it either backs or lays - never both) for several years and the whole premise of the system is built around money management.
Without a betting strategy the system has a slightly positive expectancy (which it needs to have, even the best money management can't create a winning system from rubbish) but would barely be worth betting unless using huge stakes.
With a betting strategy in place the system can deliver double digit ROI over the long haul. I can set the betting strategy based on my appetite for risk and comfort with high variance and big down swings. To calculate these factors I run simulations over millions of hypothetical races in Excel.
Even running very passively the system will deliver around 30% more gains using money management rather than none so I definately agree that a betting strategy is absolutely vital, but only once you have a system that you are confident is +EV.
Regards,
Wil