i was looking at the answers to my last post and was reading other forums and came accross one about the booke etc,can i ask even if sounding dumb but what is the book for?and how is it a market indicator.ive seen the percentages on the betfair back/lay screen but never understood it..simple explaned answer would be useful to my learning library on trading
thanks
newbi question...the book
Hi bozzyy
To understand the book % you must first understand what the odds of each runner (participant etc) actually means.
If a runner is quoted at 3/1 (4.0 decimal, the extra 1 represents the stake), we are saying that if this race was run 4 times then it would win once and lose three = 3 to 1.
Expressed as a % this would be 25%. Sometimes people make a mistake here and think 3/1 means one chance out of three, it actually means one chance out of four. 7/4 is four chances out of eleven.
At this point I hope I have not insulted anyone’s intelligence but learning percentages is absolutely critical to grasping this ( actually quite simple concept) important aspect of trading or indeed betting. For anybody who struggles with some of the basic math and would like extra help in these or related areas I have to recommend an absolute teaching genius, who’s tutorials you can find on youtube. pm if you need this info. (It is an amazing teaching resource to help your kids too!)
Once you have worked out the percentage chance of each runner, add them all up and you should get 100% and if you dutched all runners then you would neither win nor lose (ignore commission) If however the odds(percentages) add up to more than 100% (you might see a figure of 101.5%) which is the norm, it means that dutching the field to return an equal sum would return a loss of 1.5% of total capital staked. If you were the bookmaker taking these bets then you have made 1.5% profit because you are getting a higher price than the chance of one of the horses being the winner equates to.
The crucial point here is that there is a finite amount of movement that can be tolerated, in either direction on a highly liquid market such as a horse race on Betfair. This is due to the fantastic efficiency of their markets. Market forces (traders, arbers, value seekers, bookies etc) will continually shift the price (book %) closer to 100% if it deviates too far from the norm.
What is the norm?
Your homework starts here!
Remember the Book% represents the overall price of all the runners. And each horse makes up a part of that %. Who buys at the highest price? Not many because it is hard to sell for a profit when you have done so. I hope you are starting to see a bit more of the picture.
Different markets have different book percentages and the reasons are many and varied. For now it is enough to appreciate the greater the figure from 100% when you place a BACK, generally implies poor value. The opposite is true when laying.
Hope you find some use from this.
Regards
Quinny
To understand the book % you must first understand what the odds of each runner (participant etc) actually means.
If a runner is quoted at 3/1 (4.0 decimal, the extra 1 represents the stake), we are saying that if this race was run 4 times then it would win once and lose three = 3 to 1.
Expressed as a % this would be 25%. Sometimes people make a mistake here and think 3/1 means one chance out of three, it actually means one chance out of four. 7/4 is four chances out of eleven.
At this point I hope I have not insulted anyone’s intelligence but learning percentages is absolutely critical to grasping this ( actually quite simple concept) important aspect of trading or indeed betting. For anybody who struggles with some of the basic math and would like extra help in these or related areas I have to recommend an absolute teaching genius, who’s tutorials you can find on youtube. pm if you need this info. (It is an amazing teaching resource to help your kids too!)
Once you have worked out the percentage chance of each runner, add them all up and you should get 100% and if you dutched all runners then you would neither win nor lose (ignore commission) If however the odds(percentages) add up to more than 100% (you might see a figure of 101.5%) which is the norm, it means that dutching the field to return an equal sum would return a loss of 1.5% of total capital staked. If you were the bookmaker taking these bets then you have made 1.5% profit because you are getting a higher price than the chance of one of the horses being the winner equates to.
The crucial point here is that there is a finite amount of movement that can be tolerated, in either direction on a highly liquid market such as a horse race on Betfair. This is due to the fantastic efficiency of their markets. Market forces (traders, arbers, value seekers, bookies etc) will continually shift the price (book %) closer to 100% if it deviates too far from the norm.
What is the norm?
Your homework starts here!
Remember the Book% represents the overall price of all the runners. And each horse makes up a part of that %. Who buys at the highest price? Not many because it is hard to sell for a profit when you have done so. I hope you are starting to see a bit more of the picture.
Different markets have different book percentages and the reasons are many and varied. For now it is enough to appreciate the greater the figure from 100% when you place a BACK, generally implies poor value. The opposite is true when laying.
Hope you find some use from this.
Regards
Quinny
hi quinny
i read you reply 3 times as you took alot of time to write it i wanted to equal the time to understand your post.percentages i understand and grasp but you added that extra bit of info regarding the whole book concept for me to understand so thank you.regarding trading on either back then lay or lay then back am i right in saying its best practise for the book on the back side be near enough towards the 100% so making a profit while trading is greater enhanced due to the amount of matched stakes that can be made and reverse if the book is way beyond such like 110%.also the book repersents both back and lay on the betfair interface again which is more important the back book % or lay or both??
i read you reply 3 times as you took alot of time to write it i wanted to equal the time to understand your post.percentages i understand and grasp but you added that extra bit of info regarding the whole book concept for me to understand so thank you.regarding trading on either back then lay or lay then back am i right in saying its best practise for the book on the back side be near enough towards the 100% so making a profit while trading is greater enhanced due to the amount of matched stakes that can be made and reverse if the book is way beyond such like 110%.also the book repersents both back and lay on the betfair interface again which is more important the back book % or lay or both??
Hi bozzyy
We are dealing with art AND science. I think for this reason people (me) tend to be vague sometimes. I know that can be infuriating when you want/need an absolute answer but I guess you know enough to appreciate how difficult that can be. If not now, you will as your trading evolves.
Yes, generally speaking I would say that what you are asking is about right. You wouldn’t want to be backing at 110% (prices no better than bookies!) in a liquid market (ie competitive) because prices generally will be as contracted as they are likely to be. If you are backing when they % is sub 100%(rare) you know the price will get bigger and what you have to work out (the art + lots of time studying markets) is whether this will affect your particular horse.
Back and Lay % on the interface are completely separate figures. Are you looking closely.
Regards
Quinny
We are dealing with art AND science. I think for this reason people (me) tend to be vague sometimes. I know that can be infuriating when you want/need an absolute answer but I guess you know enough to appreciate how difficult that can be. If not now, you will as your trading evolves.
Yes, generally speaking I would say that what you are asking is about right. You wouldn’t want to be backing at 110% (prices no better than bookies!) in a liquid market (ie competitive) because prices generally will be as contracted as they are likely to be. If you are backing when they % is sub 100%(rare) you know the price will get bigger and what you have to work out (the art + lots of time studying markets) is whether this will affect your particular horse.
Back and Lay % on the interface are completely separate figures. Are you looking closely.
Regards
Quinny