Official way to work out return on turnover

[Luke.B]

Hi guys,

I see alot of reference to profit on turnover. Eg 0.15 - 0.20 is seen as a high end result. But i cant find a definitive way of how i calculate this. Back bets are obviuosly easy but how do i calculate turnover on lay bets, is it the liabilty, or the stake eg

back bets in race 200
return 20
T/O is 200 for 20 profit = 10% profit on turnover

Lay bets taken in race 200 (at 5.0)
return 20
Is my turnover 200 or my turnover 800 (the liability)?

[LinusP]

roi = profit / size_matched

Everything else is wrong.

Tbh as long as you are consistent I don't think it matters however using 'liability' to calculate ROI results in figures that are not comparable between back/lay strategies which makes the entire exercise pointless imho.

[Euler]

I agree

The only problem with that calculation is that it doesn't take into account risk. But for that reason I separate RoI by strategy and market type so it's relevant to what I'm doing.

[sionascaig]

Probably best to use profit / stake (as a %) and call it "edge" or "margin"...

RoI has a technical definition that should take account of time and is usually expressed as a yearly rate... There's a big difference between making 10% over 1 year and 10% over a 5 min trade...

Ultimately its all about churn and your eventual return on capital. If you have an edge churn churn churn...

[Anbell]

This topic is always engagement bait for us pros.

I agree with LinusP, generally. And Peter too.

But it is difficult to calculate in most circumstances. The math differs enormously if you lay one horse per races vs 15 horses. So I use T-stat at a market level as the best measure, but I have a sample size of thousands of races per month, which is different to most. It is difficult to get a reasonable number if you're not doing that # of transactions