General Betting
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30 Aug 10
17:12
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Date Joined:
01 Feb 10
if i start with a bank of say £100. and i bet £100 on a 1.10, then go on to lay at 1.09 that wud b a profit of £1 if the selection goes on to win.
my question is what stage do people get out if the bet if price goes the opposite way, ie do they get out at 1.11 or how many points do they leave it before deciding to take the hit???
my question is what stage do people get out if the bet if price goes the opposite way, ie do they get out at 1.11 or how many points do they leave it before deciding to take the hit???
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for a start you never put your whole bank on one bet.
yes you are correct that if you back for £100 then you get £1 for every tick lower you lay at back at 1.98 for £100 and lay at 1.90 would give you £8 (b4 comm) should that selection win. lay at 1.50 and you get £48 should that selection win. |
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yeah i was just using an example. but at what stage should you get out if odds start going against u??
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You should get out when you think the current price is as good as you're going to get. If you don't know or you cant make an educated decision based on what is infront of you in your trading software then I'd suggest you're not ready to trade yet. It takes a long time to learn the markets well enough to give yourself a real idea of whats happening and what the best time to close your trade is.... even after years you can never be sure, theres no one single signal Im afraid :)
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When you trade, all you're doing is making another bet, and if it's poor value then it will probably be detrimental to your profits.
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I worded that wrong. What I meant was, bets are all about value irrespective of if you're 'trading'. I don't know why people talk about 'trading'. All you're doing is making another bet when you 'trade'.
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When you're betting, risk is created out of thin air.
When you're trading, you are passing the risk onto someone else, hoping to earn a premium for yourself. If you think a fair price for a selection is 4.00, it may make sense (depending on your circumstances) that if you have been able to lay at 3.5, you now back it at 3.95. Backing at 3.95 would not make sense for someone who is just betting. The reason that this can make perfect sense for a trader is that the decrease in variability of returns that he achieves by 'giving up' a little of his value, means he can comfortably bet a larger proportion of his bank, meaning that the smaller edge, leads to larger profits. Once his bank is large enough, it could make sense to place value bets instead of giving up a little value by trading out, but the other factor to consider is that this leads to larger commission costs. |
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Simple remedy to that is not overstaking the first place. Then you can concentrate on value and thereby optimising your edge.
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in the first place
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The Investor Joined: 05 Jun 06
If you think a fair price for a selection is 4.00, it may make sense (depending on your circumstances) that if you have been able to lay at 3.5, you now back it at 3.95. Makes it far easier to spin your money over and over as well |
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The advice from the Investor is spot on, say you have laid a side at 3.5 following a goal, and the current price almost instantly resets to 3.95/4.0, it is perfectly sensible to green out at what is more or less the correct price, very few could estimate exactly if it should be 3.95 or 4.0 or whatever, but taking a profit or at the very least getting your stake back at "approximately" the correct price is almost never wrong, as stated anything which reduces variance and damage to your bank has to be correct, other things being equal.
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The way Betfair is designed, it doesn't make sense to bet rather than trade if your aim is to maximize profitability.
Betting on betfair (as opposed to trading, arbing etc.) only makes sense if liquidity is poor and trading out of a position is difficult. There are no exceptions. If you can place a value bet, and then trade out of the bet at fair value, this should always be done. If the above scenario was a real one, a value bettor would only be able to put about 10-12% of his bank on this bet, whereas a trader would comfortably be able to put on as much as 50% of his bank (if it was a pre-off early match odds market that will get high liquidity later for example), and completely trounce the value bettors' returns. |
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If you have to reduce the variance, you just stake less. Simple. Then you can focus on finding good prices rather than 'greening out' at a bad price because you're sh*tting yourself about your liability. It's just another bet. It's a complete fallacy to believe you're giving yourself a free bet.
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Yes it's simple if you are content with a lower return.
Another thing a bettor can't do that a trader can is profit from a small edge. In 2009 my return on turnover was less than 2%. If I was getting that without trading, it would be a net loss, when In fact, I had a 52 consecutive week run without a losing week, and paid PC in more than 30 of those weeks. |
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If I was limiting myself purely to big value bets, I would have made less with more volatility.
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Another point to think about...
Assume you Lay a football club to win the Euro 2012 at odd of 21 to 1 or higher... (eg france) If that team gets to the Final. Will the Lequidity to unwind your bet go up or down?? (regardless of profit). |
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lol Investor. Or you could just make a bet for the same liability that would be created by that trade. It's not a sly way of getting a bigger bet on you know!
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ps, "The Investor" right...
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I think Rowan may be missing the important point that Investor is making about the profitability effect of netting off positions within a series of bets on the same event. It is an important one to focus on.
One off value bets going one way only are very inefficient commission wise, unless of course your value calculations take into account fully the commission factor ( which they should ). |
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I think it is a way of getting a bigger bet on.
For example, on some events, I've had a total liability of lay bets of around £200-£300k. Of course I was laying, then backing, laying then backing on and on, as I don't even have anywhere near to that amount in my account. |
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If what you are saying about commission is true, then that is completely valid point, but doesn't the commission charge work out the same?
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"I think it is a way of getting a bigger bet on.
For example, on some events, I've had a total liability of lay bets of around £200-£300k. Of course I was laying, then backing, laying then backing on and on, as I don't even have anywhere near to that amount in my account. " ** I can only assume your not doing that kind of Vol on one football match! - Even at 10K per trade, thats 20 to 30 trades. ??? |
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FINE AS FROG HAIR Joined: 12 Mar 07
Replies: 364 30 Aug 10 20:50 I think Rowan may be missing the important point that Investor is making about the profitability effect of netting off positions within a series of bets on the same event. It is an important one to focus on. One off value bets going one way only are very inefficient commission wise, unless of course your value calculations take into account fully the commission factor ( which they should ). I've just calculated that it makes no difference. Do you have Excel? I made an Excel spreadsheet based on exactly how Betfair charges commission on trades and single bets. If you go down to the 'reduction factor - win market' section of my spreadsheet you'll see where I've entered an example of a 1.5 to 1.2 trade and a 1.2 single back. I chose these odds because backing at 1.5 and trading out at 1.2 for an equal profit on the 1.5 back winning or losing equates to a 1.2 back. Download it here: http://rapidshare.com/files/416103628/BARUALATOR_V._8.31_Trade_Example.xlsx |
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You'll see that profit is the same irrespective of approach.
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Whoops. Ignore that. I didn't enter a stake for the 1.2 back. I'll upload another file in a second.
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OMG. FINE AS FROG HAIR. You are right!!!
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MIB34, If I lay a correct score of 0-3 in Man U v Wigan at say 500, a £10k liability on my side, would only show up as £40 matched on Betfair (£20 backers stake x 2)
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Download that spreadsheet, and clear the trade and then enter a stake for the 1.2 back. You will see that Frog Hair is right!!
Trading is good, but not for the reason Investor has offered. |
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What are you talking about? What's wrong with what I said?
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Or is that what you meant Investor?
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Yes, that is an important part of what I meant.
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Oh right! Pleased it makes sense now.
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I've just noticed that you made the point about commission as an additional point. I think that's the only important point.
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If you ignore commission, then it's not a way of getting a bigger bet on. The point you make about commission is true though, and proves that trading is worth doing. I've never thought about that before.
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In theory you could make a fortune quite literally by trading a single market, starting with an arbitrary small sum. This would not be possible for someone who just places some bets in the market.
back at 5, lay at 4.9, do this x of times with the same selection, and you could make a return as large as you like. How can you say it's not a way of getting a bigger bet on? |
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I'm using an exaggerated example deliberately to make it clear what I mean.
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Rocket to the FACE Joined: 28 Oct 08
Replies: 5554 30 Aug 10 20:23 The Investor Joined: 05 Jun 06 If you think a fair price for a selection is 4.00, it may make sense (depending on your circumstances) that if you have been able to lay at 3.5, you now back it at 3.95. Makes it far easier to spin your money over and over as well |
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^
exactly. |
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that was a quote of me replying to a quote of you earlier on
but anyway, the investor is right. |
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"If I lay a correct score of 0-3 in Man U v Wigan at say 500, a £10k liability on my side, would only show up as £40 matched on Betfair (£20 backers stake x 2) "
FAO, The Investor.. Thats exactly what I assumed you were doing! ;) I couldn't see you doing 200,000 One pound trades per match. Dont get me wrong, 10 pc's a selectio of bots, a decent server, and alot of band width and entering the 200+ trades per football match i can understand! (Me im more of a 3 or 4 trades per yer type). |