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Doug
20 Dec 10 15:51
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Date Joined: 10 Aug 02
| Topic/replies: 5 | Blogger: Doug's blog
Do the most successful sports traders " Green Up " as soon as it is able ? or do they let the investment run longer depending on the bet.
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Report ZEALOT December 21, 2010 12:47 PM GMT
bacause his losses are too big for comfort ken .
Report rod hull December 21, 2010 5:39 PM GMT
Hiya Doug :-) Well I try to Green Up as soon as possible mate ... mainly because I'm a nervous wreck !!!

If you trade not to lose money then you will lose long term. You need to trade to win and let winning trades run until it is value to green out. If you take the slightest bit of profit as soon as you can then your winning trades will not cover your losses unless you have a ridiculously high strike rate (which by you saying you're a nervous wreck i doubt that you have).
Report viva el presidente! December 21, 2010 5:54 PM GMT
assuming you get your staking right, your long term profitability will depend on the aggregate value of all your bets.

with a couple of caveats* greening/redding up makes no real difference to this. the trader who always goes red at value will have a smaller proportion of winning markets than the trader who always goes green regardless of value, but will be more profitable over time.

*commission, the ability to play a value market repeatedly.
Report Coachbuster December 21, 2010 5:59 PM GMT
Greening up is sometimes good for your mental health.

That's quite important in this game .
Report Ron Pillock December 21, 2010 6:56 PM GMT
Plenty of value punters go bust waiting for the maths to work out in their favour.
Report rod hull December 21, 2010 7:52 PM GMT
In that case ron they are over staking as if they are getting value they should not be going bust.
Report eiht98 December 21, 2010 7:56 PM GMT
waiting for a few minutes more can turn your green into red
Report SHAPESHIFTER December 23, 2010 12:09 AM GMT

Coachbuster

Greening up is sometimes good for your mental health.


agree.  Frame of mind is a key to steady success.

- - -

Redding up - it is important to know when to do this as well. 

Greening up - I learnt from daytrading (dealing with 50K per TRADE including margin) and a rule that is easy to adapt here - you can throw "partial greens" onto the table if you aren't sure.  I.E, lay at 6.2  / £20..........6.6 back £10 then watch the market. 

Also, depending on the time, you can always trade out then re-enter the market.  Success is not built on a single trade. 

Trading/betting on this platform is about understanding time as well as prices.  The longer you hold onto a trade that is green, the chance remains that it can swing red until you close it.
Report cpfc4me December 23, 2010 1:08 AM GMT
If the lay price is one at which you would enter the market, then close out your position. Do not green up for the sake of greening up. This is an error a lot of traders tend to make. You let winning bets run, and cut the losses short, not the other way around.
Report FINE AS FROG HAIR December 23, 2010 3:00 AM GMT
Why is it called "greening up " ?
Why not " blacking up " ?
Report FINE AS FROG HAIR December 23, 2010 3:09 AM GMT
The thing I've never understood, or at least had adequately explained to me, is why would you ever close out a " good value " wager unless either it is starting to lose value in some form or manner, or you see a better value opportunity elsewhere to use the capital you are tying up.
Closing it out just to realise an early profit per se doesn't make any sense at all to me.
Report Injera December 23, 2010 11:13 AM GMT
I find greening up to be a great discipline. Betting is risky and in my sometimes painful experience to show respect for the volatility of this game by removing exposure is the best way to go.

I guess it depends on your strike rate. If you get few winners but with decent returns then greening up may not be something you can afford.

I like to be in control of the bet/trade. My ideal scenario is to be green before the business end of a game, before the heart starts to pump that bit quicker with anxiety. I like to turn off the tv and go out, knowing that the outcome is not the issue.
Report Contrarian December 23, 2010 11:40 AM GMT
The BF commission structure is such that (ignoring Premium Charge considerations for the moment) is it ALWAYS rational to green up at fair value. In fact, as long as one is paying a non-zero rate of commission on winnings, it is rational to green up at slightly worse than fair value (the precise amount worse depends on one's commission level).

Greening up is what enables a trader who is paying 5% commission on winnings, say, to run a profitable trading system in which he only has a 1% edge.
Report Bayes. December 23, 2010 11:53 AM GMT
Not quite true, Contrarian, but I am being pedantic here.

If the market is in a particularly irrational phase, which is often the case, and in a small time frame (say the next point in tennis) you know fairly accurately where the market is going in either direction, then it can be more optimal not to green out at fair value.
Report jimmy69 December 23, 2010 12:01 PM GMT
It is a fact that far too many people green up when they should not be doing so.
Report Contrarian December 23, 2010 12:02 PM GMT
Bayes,

Do you mean that you can be fairly sure, in this case, that whichever price the market moves to at the next point, you will be able to trade at better than fair value?

If so, I agree.
Report kenilworth December 23, 2010 12:31 PM GMT
jimmy, it is also a fact that there are those who are aware of
situations when some people may green up when they should not
be doing so, and take advantage of those situations. A classic
example was the ManC v Everton match.
Report FINE AS FROG HAIR December 23, 2010 1:30 PM GMT
Contrarian
Can you post an example to illustrate your point ?
Doesn't it depend on the amount of winnings being given up vs the comm. savings ?
Maybe not, but I'd like to understand exactly why.
Report Contrarian December 23, 2010 2:58 PM GMT
FAFH,

Take the example of a fair coin toss.

Suppose I am on 5% commission, and I can back heads for 2.04. If I don't green up, my expected return per toss is:

= (0.5 * 1.04 * STAKE * 0.95) - (0.5 * STAKE)
= -0.006 * STAKE.

Despite backing at value, my 5% commission means that I lose 0.6% of my stake each toss.


However, if I green up at evens just before the coin is flipped, my expected return is:

= (0.5 * ((1.04 * STAKE) - STAKE)) * 0.95
= 0.019 * STAKE.

And even if I lay off my bet at 2.02 before the coin is flipped, my expected return is positive:

= (0.5 * ((1.04 * STAKE) - (1.02 * STAKE)) * 0.95
= 0.0095 * STAKE.
Report Coachbuster December 23, 2010 3:34 PM GMT
I've taken plenty of assumed bad value when greening up too early , but i am convinced overall that i am in profit by doing so .

I specialise in correct scores , so if i am in a position where i have a large green in place  on a certain score (3-2,2-3,2-2,4-2,3-3) i tend to want to capitalise on this .
I know the correct odds of my score should be say  3.8 ,but i will lay at 4.3 and lose £100- 400 voluntarily .

The reason for this is two fold.
Firstly , if a succession of goals have been scored in a short time the likelihood of an impending goal is far greater than the normal odds would suggest .
No logic therefore in waiting for the odds to correct themselves .

Secondly .
3.8 is a better lay than 1000 .
Report Coachbuster December 23, 2010 3:35 PM GMT
4.3 *
Report viva el presidente! December 23, 2010 3:35 PM GMT
true, contrarian. but the PC is a pretty major factor.

unless you have a definite idea of what constitutes value in a given situation, I would say that two key rules of thumb in greening up after a favourable development are:

*wait for the market to settle
*don't cross the spread.
Report Bayes. December 23, 2010 4:41 PM GMT
Do you mean that you can be fairly sure, in this case, that whichever price the market moves to at the next point, you will be able to trade at better than fair value?

Exactly this. In the simplest case, let's say the price is at fair value for you to trade out but you are fairly sure that you will either get:

- fair value if the next point goes against you
- 1% better than fair value if the next point goes for you

then it is better to hold your position. Effectively you've had an extra EV+ bet on a micro basis.
Report kenilworth December 23, 2010 6:15 PM GMT
Firstly , if a succession of goals have been scored in a short time the likelihood of an impending goal is far greater than the normal odds would suggest

Sorry, but not true.
Report Coachbuster December 23, 2010 6:52 PM GMT
goals beget goals .
Report FINE AS FROG HAIR December 24, 2010 1:01 AM GMT
Thank you Contrarian.
All clear now.
Report ocean0201 December 24, 2010 2:08 AM GMT
Do the most successful sports traders " Green Up " as soon as it is able ? or do they let the investment run longer depending on the bet.

I am no successful sports trader but i green up as soon as i can.. i then build new position when price settles...

For example,
Man United Vs Sunderland this weekend, i lay Man Utd at 1.3 no goals in 45 mins, man united price now at 1.6 or higher, i green out. Depending on how the second half goes , i may put a new trade at 55 - 60 mins
On the other hand if Man United score in the first min and then 1.3 is now 1.1, i will red out and build a new position

The above was just an example and i do not suggest laying man utd this weekend .. but then why not? Sunderland won at Chelsea so they can do at Old Trafford [;)]
Report cpfc4me December 24, 2010 2:44 AM GMT
I am no successful sports trader but i green up as soon as i can.. i then build new position when price settles...

Greening up as soon as you can is one big reason why you are not successful. Taking small profits is easy - it's letting winners run and cutting losses short that is the key to profitability. Trading 101.
Report pxb December 24, 2010 3:19 AM GMT
The main reason to green up is to avoid the psychological impact of a large loss or losing a large win.

Commission is the other issue, as pointed out above.
Report cpfc4me December 24, 2010 7:49 AM GMT
The commission example is flawed since commission needs to be factored in before deciding whether or not a bet is value, and no one in their right mind would back at 2.04 and let it run if their commission rate is 5%.

Unless you are overstaking, or again not betting at value, then it makes no sense to lay off at anything other than value. Long-term, you are giving away money.

I do agree that when you stand to win a large amount of money, then it is understandable to lay off at less than value. Imagine the guy who in December 2007 bets £100 on Cardiff City to win the FA Cup at 500-1. (I'm making these numbers up to illustrate the point). He then suffers the misfortune of spending the next four months in a coma, before waking up on the eve of the Cup Final to find that Cardiff are in it. He considers true value at this point to be 3-1, but can only green up at 7-2. Who among us would seriously suggest he not do that because "it's not value" to do so?
Report A treeeemendous machiiine December 24, 2010 9:06 AM GMT
the commission example still works cpfc, say for example you backed a fair coin toss at 2.2 (which would still be value after commission), your expected profitability would be higher greening out at evens than letting it ride. the mistake most punters make is greening out at a very poor price
Report kenilworth December 24, 2010 9:23 AM GMT
cpfc, quite an extreme and highly unlikely example but I'm sure
some people would be looking to get out of that bet at many stages
between 500/1 and 3/1, value or not. I almost never green up and I am
sure it pays me to be that way. The problem is, when do you green up ?
For instance, backing 'unders' pre kickoff, there is a profit within a
couple of minutes of play, so when ? For me, the answer is to stake,and 
be prepared to lose.
Report Baby Jesus December 24, 2010 1:32 PM GMT
In theory you'll obviously be better off closing out when it's value to do so but that requires the skill to know when a bet is 'value' or not. I'd imagine most traders on here are turning over so many markets their only concern is selling the bet back at worse odds than they bought it for regardless of if any of their bets were value to begin with. It's a lot easier to judge the direction of a market than have the skillset to consistently identify 'value' bets.
Report Coachbuster December 24, 2010 1:36 PM GMT
yep,green out and move on while the profit is there .

then onto the next game .

no point in  spending all day picking 5 pences off the floor when you can make more doing something else  [;)]
Report U.A. December 24, 2010 1:41 PM GMT
It also depends on whether you are trading pre-match or in-play. If trading pre-match you'll want to trade out before the game goes in-play. The question is what do you do if you feel that the price is not at true value at kick-off? For me the answer is trade-out.
Report viva el presidente! December 24, 2010 5:34 PM GMT
cpfc4me Joined: 30 Mar 04
Replies: 200 24 Dec 10 07:49 


[...]Unless you are overstaking, or again not betting at value, then it makes no sense to lay off at anything other than value. Long-term, you are giving away money [...]

---------------

This isn't always true. If you're fully extended in a market, it makes sense to green/red out at less than value *if* you have a reasonable expectation of being able to play the market again at value that exceeds what you've given away.

I do this a lot, in a couple of markets I feel like I understand - both in terms of true value and likely movement. it's a form of risk control, really.
Report clacherholiday2 December 24, 2010 6:02 PM GMT
for me there different rules on different markets and for in-play.  also im far more in favor of laying off my backing stake for a 'free bet' than alot on here are.

as coach said earlier peace of mind is important, the only sensible way of keeping it in check is to stake appropriately, the only people who worry or stress over the outcome of a bet are over-staking.
Report cpfc4me December 24, 2010 8:15 PM GMT
A treeeemendous machiiine: the commission example still works cpfc, say for example you backed a fair coin toss at 2.2 (which would still be value after commission), your expected profitability would be higher greening out at evens than letting it ride. the mistake most punters make is greening out at a very poor price

The commission example given doesn't work. It's a poor play to back at 2.04 when you're on 5% commission, because your only chance of being profitable with this strategy long-term requires that you find a bigger fool (or someone on less commission) who finds your 2.02 a value back.

If you could bet on a coin toss at 2.2, at what price would you lay-off and why? No sane person (on 5% commission) would back your lay at anything below 2.06, so you would be better off letting the bet run.

viva el presidente! to my comment "Unless you are overstaking, or again not betting at value, then it makes no sense to lay off at anything other than value. Long-term, you are giving away money"
---------------

This isn't always true. If you're fully extended in a market, it makes sense to green/red out at less than value *if* you have a reasonable expectation of being able to play the market again at value that exceeds what you've given away.


If you're fully extended in a market, then I would suggest that you are over-staking.

kenilworth: cpfc, quite an extreme and highly unlikely example but I'm sure some people would be looking to get out of that bet at many stages
between 500/1 and 3/1, value or not. I almost never green up and I am sure it pays me to be that way. The problem is, when do you green up ?
For instance, backing 'unders' pre kickoff, there is a profit within a couple of minutes of play, so when ? For me, the answer is to stake,and 
be prepared to lose.


The example was intentionally extreme to make the point that on rare occasions, greening-up at less than value is a reasonable course of action. It's an insurance premium if you like. I wanted to remove the possibility of greening up earlier, which is why I put our unfrotunate friend into a coma for a few months!

To summarise, if you are backing at a value price, with a stake that is appropriate, you should never green-up unless you can lay at a less than value price. Taking small profits is easy, but it's not good trading practice to lay off simply because the position is profitable.
Report FINE AS FROG HAIR December 24, 2010 8:59 PM GMT
Also given the likelihood that the opening " good value " wager was made after an exhaustive,objective analysis of the relative factors, whilst the lay off wager is being made quickly without exhaustive objective analysis ( that is more on emotion than in the case of the opening wager), it will quite often be the case that the lay off wager is a waste of time and money.
Of course I'm sure the " value betting experts"  will say that they have software in place to calculate " good value" objectively at all times, no matter waht the time constraints are.
Report viva el presidente! December 24, 2010 10:17 PM GMT
If you're fully extended in a market, then I would suggest that you are over-staking.

------------

no, that would be over-extended.

the logic of what you're saying is, if you stake your limit on a market, you've gone over your limit.
Report kenilworth December 24, 2010 10:27 PM GMT
The answer is really that if you get the price right
in the first place, bet accordingly, and the 'edge'
you think you have should see you home overall. If
it doesn't, then the your original calculation is
flawed.
Report cpfc4me December 24, 2010 10:51 PM GMT
Not quite true Kenilworth, since there are often changes in circumstances that make a bet that was at one time value, no longer value. The Lakers at 1.8 pre-game might be considered value, but if Kobe Bryant is knocked out after five minutes, one would probably change that opinion. There's nothing wrong with greening up - or reding up - so long as there is a good reason to do so, i.e. the second bet is value.

I liked FAFH's comment that the opening bet is more likley to be the result of "exhaustive, objective analysis" than the closing bet. That's a good point.
Report kenilworth December 25, 2010 10:15 AM GMT
Well of course if things happen after the event begins, things
change, but those changes can be for you as well as against you,
and built into the price.
Report cpfc4me December 25, 2010 8:04 PM GMT
It's a rare event where nothing happens! The true probability of an outcome does change as an event is in progress, and the price available changes also. In the same way that you made your initial bet after "exhaustive, objective analysis" and determined the price was value, the same approach should be used in determining when, or if, to exit the position. If the price at which you can lay off never drops below the price you consider is currently value, then you should never lay off.
Report FINE AS FROG HAIR December 25, 2010 8:52 PM GMT
You're a hard taskmaster cpfc4me.
Report FINE AS FROG HAIR December 25, 2010 10:04 PM GMT
cpfc4me
What if you take a " good value " position which then , due to unforeseen circumstances, goes very much awry,and short of a miracle will not turnaround, why not then exit at any price to salvage a few pennies ?
Report cpfc4me December 26, 2010 3:49 AM GMT
What if you take a " good value " position which then , due to unforeseen circumstances, goes very much awry,and short of a miracle will not turnaround, why not then exit at any price to salvage a few pennies ?

The key is what do you mean by "short of a miracle"? Miracles happen. 1.01s are overturned every day. Are they miracles? Not really, so if the miracle required is a 1 in 50 miracle, but the market estimates it's a 1 in 100 miracle, then you wouldn't exit because it is bad value to do so. However if the miracle required is 1 in 1000, but you can lay at 1.01, then it makes sense to get out. In other words, if the price at which you can lay off isn't below the price you consider is value, then you shouldn't lay off. Oh wait, I said that before...
Report FINE AS FROG HAIR December 26, 2010 5:33 AM GMT
I believe you have.
But your point is solid, subject to commission saving factors.
I believe Investor and Bayes et al have sound, well argued points on that angle.
Or do you disagree entirely on that matter ?
Report Rocket to the FACE December 26, 2010 1:00 PM GMT
FAFH I take it you don't make money on here?
Report Contrarian December 26, 2010 1:34 PM GMT
cpfc4me
24 Dec 10 07:49 Joined: 30 Mar 04 | Topic/replies: 204 | Blogger: cpfc4me's blog
The commission example is flawed since commission needs to be factored in before deciding whether or not a bet is value, and no one in their right mind would back at 2.04 and let it run if their commission rate is 5%.


Could you clarify what you mean by this? I thought the example pretty clearly demonstrated an instance where expected return was positive with greening up at worse than fair value, but negative with no greening up. That was the only point of the example.
Report Contrarian December 26, 2010 1:40 PM GMT
Just to elaborate slightly: your comment that "commission needs to be factored in before deciding whether or not a bet is value" is wrong.

The whole point of my example is that you can't factor in commission to decide whether a bet will have a positive expected return, without considering what the exit strategy of the trade will be. Obviously, backing 2.04 for a coin toss may or may not be a good idea, for someone on 5%, depending on whether or not they will be able to lay off at evens later on.
Report The Investor December 26, 2010 2:24 PM GMT
Contrarian
Date Joined: 19 May 03
Add contact
When: 23 Dec 10 11:40
The BF commission structure is such that (ignoring Premium Charge considerations for the moment) is it ALWAYS rational to green up at fair value. In fact, as long as one is paying a non-zero rate of commission on winnings, it is rational to green up at slightly worse than fair value (the precise amount worse depends on one's commission level).

Greening up is what enables a trader who is paying 5% commission on winnings, say, to run a profitable trading system in which he only has a 1% edge.


Yes, the PC distorts traditional risk /rewards characteristics. If "customer A" wins £100,000 and loses £20,000 and "customer B" wins £500,000 and loses £412,000, they both have a profit after commission (2%) of £78,000.

Assuming for the sake of simplicity that all bets placed are uncorrelated, the return characteristics of customer A are obviously far superior to those of customer B.

With the introduction of PC customer A is incentivised to mimic the returns of customer B if possible to maximise net profit.

I can't think of any other area in betting or finance where a similar situation exists. Does anyone else know of any?
Report kenilworth December 26, 2010 3:25 PM GMT
cpfc, 'If the price at which you can lay off never drops below the price you consider is currently value, then you should never lay off'.  I disagree.
Price layed: 2.44
Present price: 20.0, but IYO should be 25.0.
Are you saying the layer shouldn't entertain
backing (or greening) at 20.0 ? if you are
then you are very wrong IMO.
Report The Investor December 26, 2010 4:01 PM GMT
Backing at 20 in the situation you described would be a very poor decision in all but a very small minority of cases.
Report zipper December 26, 2010 4:23 PM GMT
Frog
The Investor
Kenilworth
Contarian
Rocket Face
Cpfc4me
Greening Up is for Whimps . this is a gambling game  Real men dont green up, Give you two in two sports  Boxing  Clay, Marciano  .
Snooker  Alex Higgins , Steve  Davies .

I could name champs in loads  of  sports  but you get the drift

Green Up is for Whimps 

and you never be a champ  Greening up   zip
Report kenilworth December 26, 2010 4:59 PM GMT
zipper, I am not one to green up, but making a point
regards closing at a 'below value price'. I think in
certain circumstances it can be justified.
Report kenilworth December 26, 2010 5:01 PM GMT
The Investor   


Backing at 20 in the situation you described would be a very poor decision in all but a very small minority of cases.


Investor, when would it be justified ?
Report zipper December 26, 2010 5:22 PM GMT
Kenny  "value price"... whats value   you got  12/1 a horse you thought  should be  7/1  you ok with that  but it got beat  with a 6/5 shot  take your value ticket to your bookie and he will say  sorry  son that horse lost " you cannot eat  value " sounds brutal but its truthful
Report The Investor December 26, 2010 5:33 PM GMT

Investor, when would it be justified ?


Examples would be :

a) you pull the money out because there are better opportunities available, for which you would not otherwise have the funds (in which case your bank is can probably be increased to produce better returns).

b) you expect to be able to lay the same selection at sub 20 and play the trade through again x times.

Both of the above examples indicate that the bank size should be increased if possible. Once this is achieved, trading out at such bad odds really shouldn't be necessary, although giving up a smaller amount of value may still make sense.
Report MissingRibOfPrince December 26, 2010 6:03 PM GMT
If you need to "free up" funds would you not consider that an issue with your money management, perhaps too high a percentage of your bank on one market. Each to their own but i personally don't allow a red figure to be greater than 5% of my bank on any particular outcome at any time, its a rule that has stood me well.

KEN: can't agree with the 20/25 argument, i would consider backing at 20 when i figured the correct price to be 25 a bad move. Its a marathon not a sprint and all that,surely price is everything in the long term?. Clearly it is tempting in the short term. Regards.
Report The Investor December 26, 2010 6:34 PM GMT
MissingRibOfPrince,

It still applies. You can still run out of funds if you place enough bets. If you never use your full bank to 100% (or close) liability, you are either using a bank that is larger than it needs to be, or not making optimal use of funds.
Report kenilworth December 26, 2010 6:37 PM GMT
When you start talking about 'freeing up' up money,
that is another matter, that can be justified with
any price situation. BTW, what do these people who
need to free up money do when there positions are not
such that they are able to do so ? For example,
their 2.44 lay is now 1.12 ?
Report The Investor December 26, 2010 7:25 PM GMT
red out.
Report cpfc4me December 26, 2010 9:22 PM GMT
Contrarian: Just to elaborate slightly: your comment that "commission needs to be factored in before deciding whether or not a bet is value" is wrong.

The whole point of my example is that you can't factor in commission to decide whether a bet will have a positive expected return, without considering what the exit strategy of the trade will be. Obviously, backing 2.04 for a coin toss may or may not be a good idea, for someone on 5%, depending on whether or not they will be able to lay off at evens later on.


I don't see how my statement that one needs to factor in commission before deciding whether or not a bet is value is wrong. To use your coin toss example, for someone on zero commission, 2.02 is a value bet. For someone on 5% commission, 2.04 is not a value bet. If everyone was paying the same rate of commission, this would be a no brainer, but we're not, so what is a value bet to one person is not a value bet to another, so we have the situation where you can back at poor value (to you) and still make a profit so long as we can lay off at a lower price. A 5% payer backing at 2.04 could lay at 2.02 to a 1% payer for example, because the 2.02 is value to them.

But in the real world, backing at anything less than value to you is risky. You may not be able to lay-off and so it seems reasonable to me that rather than assume a 'greater fool' will be found, you in general limit bets to those that are value. I say in general because, while a Premium Charge payer at 20% would need a price of 2.26 on his coin toss bet to be 'value', there is a very reasonable expectation that he would be able to lay this off for a profit at 2.04 or so since most people are paying far less than this. An illustration of why it doesn't make sense for Premium Charge payers to punt on Betfair, but only trade.
 
Zipper Greening Up is for Whimps . this is a gambling game  Real men dont green up

If you are unable to comprehend the opportunity that being able to green-up offers, then you are missing out on a key ingredient for being profitable. If you read the entire thread, there's some good information in here. Greening up at less than value is (with the one exception I gave) not a good idea - greening up when it is value to do so, is a good idea.
Report The Investor December 26, 2010 9:28 PM GMT
An illustration of why it doesn't make sense for Premium Charge payers to punt on Betfair, but only trade.

Exactly the opposite is true! Punting is what helps you avoid paying PC, not trading!
Report Bayes. December 26, 2010 9:40 PM GMT
If you're a PC payer on 2% then a punt on a 2.00 shot at 2.00 is value.
Report FINE AS FROG HAIR December 26, 2010 10:15 PM GMT
Isn't the coin toss example a bit misleading in all this.
As in that case you know the exact probability involved.
In sports betting you never really know the exact probability of anything happening. We're all guessing to a degree.
Or is it only me ?
Report cpfc4me December 26, 2010 10:28 PM GMT
An illustration of why it doesn't make sense for Premium Charge payers to punt on Betfair, but only trade.

I guess it depends on your percentages and whether or not your punting is profitable. When I am paying the PC, I punt elsewhere. My total charges of a little over 20% after six profitable years mean that the commission on punts barely dents that number. (Finding the same edge on punts that I can find in-play is very tough, but that's for another topic another day).
Report jimmy69 December 26, 2010 11:34 PM GMT
ffs trading is punting...when will people start to realise they are 1 and the same thing...
Report modk December 26, 2010 11:35 PM GMT
This thread Laugh
Report cpfc4me December 26, 2010 11:41 PM GMT
I think most people understand the term 'punting' to mean making a bet that you will run to its conclusion. That is quite different to trading where you take a position with a view to trading out (greening up ideally) if / when it is value to do so.

FAFH: We may be all "guessing to a degree", but if the degree is not close to being correct, then you will not be profitable long-term.
Report jimmy69 December 26, 2010 11:48 PM GMT
Your initial "trade" is surely a "punt" or am I missing something?
Report FINE AS FROG HAIR December 27, 2010 12:15 AM GMT
All semantics jimmy.
Although the " traders " will try to tell you differently.
Report cpfc4me December 27, 2010 1:55 AM GMT
Your initial "trade" is surely a "punt" or am I missing something?

To me, a "punt" is a bet-long commitment - you are betting on the final outcome. A bet made for trading purposes is simply your entry point into the market. It can be a bet that you never lay-off if it is never value for you to do so, but usually traders will have an exit point and no intention of letting the bet run.

I frequently lay large amounts at short odds in sports like American Football, not because I think the 1.06 shot is going to lose, but because I think it is too short a price and will, at some point, trade higher. I certainly wouldn't call that a "punt".
Report MissingRibOfPrince December 27, 2010 1:54 PM GMT
Original from Contrarian:

FAFH,

Take the example of a fair coin toss.

Suppose I am on 5% commission, and I can back heads for 2.04. If I don't green up, my expected return per toss is:

= (0.5 * 1.04 * STAKE * 0.95) - (0.5 * STAKE)
= -0.006 * STAKE.

Despite backing at value, my 5% commission means that I lose 0.6% of my stake each toss.


However, if I green up at evens just before the coin is flipped, my expected return is:

= (0.5 * ((1.04 * STAKE) - STAKE)) * 0.95
= 0.019 * STAKE.

And even if I lay off my bet at 2.02 before the coin is flipped, my expected return is positive:

= (0.5 * ((1.04 * STAKE) - (1.02 * STAKE)) * 0.95
= 0.0095 * STAKE.


I have a couple of questions please. With the first calculation above assuming 5% commission, where you have the 1.04 in the first line, how do you work the calculation if the odds are laying below "correct" price, ie at a value price).
for example, lets say instead of getting 2.04 on a coin toss which should be 2.00, you are laying 1.53 when you "know" the correct price to be 1.54.
I know odds of 1.53 on here imply a 65.5% chance of winning. Clearly, laying 1.53 and immediately backing 1.54 ( the "correct" price ) would be profitable, but lets say a market changing event occurs, a goal is scored for example. The 1.54 becomes 2.6 lets say.

Now if you were to have layed the 1.53 at value, and back back for a loss at the new CORRECT price of 2.6, thus redding out, would you still be profitable long term, assuming the 2.6 is the fair price of the event now occuring. I know you would lose THIS TIME, but long term what would be the outcome. ie: you backed the coin toss at 2.04, and then the coin was tossed...the coin is now spinning in the air...the coin is about to fall over and leaning like it looks like its about to come up tails!! (bare with me!)...correct price for tails is now 1.54....would greening/redding out at a second price be enough long term if that second price is an accurate reflection of the outcome?. You have got the value the first time, but the market has changed dramatically, however the new price is efficient.
I hope you can understand what i'm trying to say! thanks
Report The Investor December 27, 2010 3:57 PM GMT

By:
jimmy69
Date Joined: 11 Apr 01
Blogger: jimmy69's blog
Add contact | Send message
When: 26 Dec 10 23:34
ffs trading is punting...when will people start to realise they are 1 and the same thing...



Trading is punting, that's correct (at least when referring to trading on a betting exchange).

But they are not one and the same thing. Trading is a subset.

Trading = punting (true)
Punting = trading (false)

jimmy69
When: 26 Dec 10 23:48
Your initial "trade" is surely a "punt" or am I missing something?


That hits the nail on the head. Punting or gambling involves creating risk out of thin air, which is what happens when you and a counterparty strike a bet. Trading involves transferring existing risk, rather than creating it.
Report Contrarian December 27, 2010 5:56 PM GMT
MissingRibofPrince,

The answer to your question, "would you still be profitable if you were greening/redding out following significant market moves (eg. after a goal) is, it depends on how much of a value bet you got in the first place, what your commission rate is, and how much the market has moved.

In the simplest case (like my coin one) where you manage to back at value, and then lay off at fair price, with the underlying probability unchanged, obviously even the slightest bit of initial value is sufficient to guarantee a long-term positive expectation, no matter what rate of commission you are paying. In this case, your returns each time are perfectly even (and positive), and the total commission paid is always just a fraction of the profit.

However, if you were laying off following a change in the underlying probability (eg. following a goal), there will be significant variation in your returns - sometimes you will have relatively large profits, and others large losses, and it is possible that the total commission paid will eat into the profit, such that the overall strategy becomes unprofitable. As I say, this will total depend on how much the market moves (and therefore how much variation in the returns there is) and how much commission you are paying.
Report FINE AS FROG HAIR December 27, 2010 6:20 PM GMT
Exactly Contrarian,  aren't you therefore back to what I said earlier, before the somewhat unrepresentative coin toss analogy was thrown in  ?
THt is it all depends on the ampunt of profit you're giving up and the commission being saved.
Report Bayes. December 27, 2010 6:29 PM GMT
I used to seed the Exchange Games, and the maths I had to do there was very illuminating in terms of greening up.

Essentially, to beat commission you need the odds movements (in the case of Exchange Games this was after each round) to be sufficiently small that your profit or loss wasn't too big before you were able to square off. Success was dependent on expected profit exceeding expected commission. In that sense the first bet you struck was always EV- if you factored in commission (a back of a 4.0 shot at 4.02 for example)

Needless to say, margins were wafer thin.
Report Contrarian December 27, 2010 6:33 PM GMT
FAFH,

I'm not certain which comment of yours you're referring to, but in regard to the original question about the merits of greening up, the point still stands that it's better to green up at value than not.

In order to bet most efficiently - where 'efficient' means maximising expected return given a certain edge, and a certain commission rate - you have to even out your returns as much as possible.
The idealised case of backing the coin toss at 2.04 and laying off every time at 2.0 is a perfectly efficient betting system.
A more realistic in-play scenario where you back at better than fair value, and then lay off later at a significantly different (fair value) price (once the underlying probability of the event has changed) is a rather less efficient system.
But the least efficient system of all is never to lay the bets off, but let them run to expiry. This sort of strategy guarantees the most variation in returns, and so the most amount of commission paid.
Report MissingRibOfPrince December 27, 2010 6:36 PM GMT
Thanks for the answer Contrarian. My general approach to this site has been betting when i feel the price to back or lay is incorrect,as i'm sure that approach is with most people. If i find this is the case in a market, its usually only by one or two ticks (otherwise i feel its ME that has things wrong, not the market!).

I don't TRADE each market, (i do sometimes) and tend to let winners ride and try and red out when the market moves against me, WHEN I AM SATISFIED THE PRICE IS CORRECT (unlikely to get extra value for a second time but ideally i would!). As regards commission, and return on stake (your initial equation posted), would i not now be better off greening up no matter what the price moves to IF IT IS AN EFFICIENT PRICE. After the initial bet at value, is it not now better to red/green out no matter what (once you aren't giving away the "value"). ie over hundreds of markets, would this not be a better approach than letting profits ride. After all, 2.04 on a coin toss feels like value but is a loss-maker on 5% commission if you let it rise, like you illustrate. Thanks again,all the best
Report zipper December 27, 2010 6:37 PM GMT
Green Up,  Green Up , Alex Bird ... John Mort Green , John Gough  would  spit in your eye .. you whimps
Report FINE AS FROG HAIR December 27, 2010 9:01 PM GMT
What's a whimp ?
Report cpfc4me December 28, 2010 12:25 AM GMT
'Whimp' is further evidence that the writer didn't do too well at school. His comments not only show a failure to understand basic mathematics, despite some clear examples to prove the benefit of sometimes greening-up (or reding up), but also show a failure to master the English language!
Report FINE AS FROG HAIR December 28, 2010 12:28 AM GMT
I was joking. I hope you are too. What's " reding ".
Report kenilworth December 28, 2010 12:34 AM GMT
FAFH, Should your post not end with a question mark ?
Report FINE AS FROG HAIR December 28, 2010 12:47 AM GMT
Ooh we've started something here. Not good eh ?
Report cpfc4me December 28, 2010 12:55 AM GMT
Reding is the opposite of greening. I'm impressed that you have never had to do it!
Report FINE AS FROG HAIR December 28, 2010 1:01 AM GMT
Didn't you know cpfc.?
I'm one of those unbeatable " traders" who never gets it wrong.
Earn 10000 -20,000 % pa on a tiny risk capital base.
You mean you don't ?
Report Steveirll December 28, 2010 1:02 AM GMT
because there is no work in DINGLE in Co Kerry thats why he is a nervous wreck
Report FINE AS FROG HAIR December 28, 2010 1:06 AM GMT
Err thanks steve, I think.
Report coboz December 28, 2010 1:40 AM GMT
Beginner here.Could someone tell me if it is possible to see more than the three back and three lay bets that are shown on the screen. I mean is there any way to see the fourth and fifth odds and how much money is there? Was playing around last night with small bets, trying to predict movement direction on horse markets but would have liked to be able to see more depth. Thanks for any help.
Report The Investor December 28, 2010 1:53 AM GMT
coboz, you need to use software for that. It's called a ladder interface.
http://www.youtube.com/watch?v=W3SqDdDWCBk
there are a bunch of software solutions that provide it.
Report coboz December 28, 2010 1:57 AM GMT
Thanks Investor. Appreciated.
Report U.A. December 28, 2010 10:45 AM GMT
Alternatively you could always click on the little graph next to the runner. It isn't as dynamic but doesn't involve any software. It depends on your needs i suppose.
Report zipper December 28, 2010 10:52 AM GMT
cpfc4me,  lets have a laugh  do you know how to laugh . never mind
the reason i did not do to well at school  simple i did not go to school  The  Only school  zip ever attended was the  School Of  Life. hey i did pretty good in that . Happy New Year .
Report zipper December 28, 2010 10:56 AM GMT
Frog  Redding up  means you lost less than you should have ......but you lost .
Report catherine71 March 13, 2011 8:26 AM GMT
I am new to trading on betfair,I have read with interest all the above replys.

I work all day,how can I place a back bet and then place a lay bet at a price and let it run its course whilts  I am at work?

ie: Bet celtic at 3 for 100 and let betfair atomatic lay them for 200 ponds if they drop to 1.5?
Report MrBaboon March 13, 2011 8:57 AM GMT
Trading is also punting, you are taking a risk, especially if the site goes down!
Report ValandHue March 13, 2011 2:07 PM GMT
catherine,

place your 1st back bet on celtic then enter your lay at 1.5 and click the "keep bet" option on the betting slip.

this fires your bet in automatically and if/when celtic touch 1.5 your bet will liquidity providing get matched.
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