Premium Charge Anomoly

Investor:

As I said, I'm not at all sure I'm right. It's defo too late for me to think about it but I will do soon.

some interesting stuff to think about from investor and bayes. cheers guys.

Cheers Bayes. I'm always up for improving efficiency

Bottom line is this, costs dough to run this site. Players aint what they used to be, so current crop must carry the freight or whole thing dies.

What is it about traders that make them think they're so important that the rest of us should pay for the running of the site while they get to operate virtually commission free. Their attitude is identical to that of the parasitic sc.um in the financial sector who are getting pay rises and huge bonuses while the rest of the country pays for their mistakes.

rink rat and feck
Right on.

rink rat .

I think BF would pull a number of markets before it got too bad.

This afternoon around 3pm there will be untold football matches with untold markets running alongside other sports .

No wonder sometimes its difficult to get matched

Coach, commissions and pull not like yesteryear. Betfair won't accept a decline so they pass their losses on numbers to the existing still profitable clientle.

What is it about traders that make them think they're so important that the rest of us should pay for the running of the site while they get to operate virtually commission free.

This is the bit I don't understand about your argument Feck - what makes you think alot of traders don't pay a high commission rate?

I pay 4.6% and I'm sure there's lots of others on here that are in the same boat.  I'm not a huge player but the idea that all traders are paying 2% in commission and nothing else is way out of line.

markysparky, just ignore feck, he continually spouts jealous cobblers about the traders who provide all the liquidity here, he is under the impression that anyone here can suddenly become a trader, and as if by magic huge sums of cash flow risk free into your account without any effort or skill whatsoever

marky, I'd think most traders are paying around 5% but it's commission on profit I'm talking about. Under the old system if you had 100 backs at 1.1 and they all won and I had 100 backs at 110.0 and one won, we'd both have the same turnover and gross profit but I'd be  expected to pay up to 11 times the commission you would.

The old commission system clearly favoured those with a high percentage of winning markets (traders, hooverers, insiders etc.). The pc only partially addresses that issue as the aforementioned are still paying the minimum possible commission on profit while winning  gamblers could be paying anything up to 100% of their profits in normal commission.

Suppose they deducted 22.5% of your lifetime profit as a running total making deductions / rebates after each market was settled and then each Wednesday they calculated what you would've paid under the old system and, if that was greater than what you'd already paid, docked the difference from your account (i.e. they're swapping over the normal and premium charge deduction times). Then

1) Everyone would pay more or less what they do now

2) The Ferengi wouldn't have a Wednesday payment

3) Almost all gamblers would have a Wednesday payment

4) Gamblers would be up in arms at having to subsidise the mainly worthless Ferengi.

5) The only people who wouldn't be whinging would be the Ferengi.

Can any pc calimero please tell us why the gamblers should have to make this wednesday payment?

Would giving those NOT being charged on the wednesday a rebate of 75% of their previous week's commission be a solution to the above injustice? If you think so then you need treatment.

What is it about traders that make them think they're so important that the rest of us should pay for the running of the site while they get to operate virtually commission free. Their attitude is identical to that of the parasitic sc.um in the financial sector who are getting pay rises and huge bonuses while the rest of the country pays for their mistakes.

Do you get paid every time you copy and paste that rubbish from your clipboard?

Well that's my argument torn to ribbons by Carol Smilie's logic.

Thanks management.

Here's a wee revision for you TurtlesBrain. I'll be plastering it all over every pc whinging thread from now on.

What is it about traders that make them think they're so important that the rest of us should pay for the running of the site while they get to operate virtually commission free. Their attitude is identical to that of the parasitic sc.um in the financial sector who are getting pay rises and huge bonuses while the rest of the country pays for their mistakes.


Suppose they deducted 22.5% of your lifetime profit as a running total making deductions / rebates after each market was settled and then each Wednesday they calculated what you would've paid under the old system and, if that was greater than what you'd already paid, docked the difference from your account (i.e. they're swapping over the normal and premium charge deduction times). Then

1) Everyone would pay more or less what they do now

2) The Ferengi wouldn't have a Wednesday payment

3) Almost all gamblers would have a Wednesday payment

4) Gamblers would be up in arms at having to subsidise the mainly worthless Ferengi.

5) The only people who wouldn't be whinging would be the Ferengi.

Can any pc calimero please tell us why the gamblers should have to make this wednesday payment?

Would giving those NOT being charged on the wednesday a rebate of 75% of their previous week's commission be a solution to the above injustice? If you think so then you need treatment.


Under the old system if you had 100 backs at 1.1 and they all won and I had 100 backs at 110.0 and one won, we'd both have the same turnover and gross profit but I'd be  expected to pay up to 11 times the commission you would. The premium charge doesn't even go far enough to address that injustice as those paying it are still paying a lower percentage of their profits in commission than all other long term betfair winners.

"the skill requirement is pretty limited. Hence it can be taught, hence every Tom, Dick and Harry can do it"

If it really is that simple and unskilled, why doesn't everyone do it, do you think

Could it be that taking an initial position (to put you where you can place another bet later on in favourable circumstances) actually requires just as much skill as a straight bet, if not more because you are making trading out part of your strategy, so you have to rely on there being sufficient liquidity at another point to do so

The Management - Just out of curiousity are you claiming that anyone can become a trader and it is really easy whilst the skill required to become a "proper" gambler is more complex and is something that cannot be taught and hence only the intellectually gifted have (slight ad-libbing here), whilst stating also in the same email that you don't like it when traders claim superiority over gamblers?

Feck - The simple answer to your wednesday question is because that's what Betfair have decided to do because they feel that is in the best interests of their company. Whether they are right or wrong who knows, more details as to why they actually decided to go about it this way i'm afraid can only come from some kind of Betfair representative. By the way i'm not claiming to be a pc calimero as i'm not sure what that is.

I'm not sure what Wednesday question you're answering UA. The only one I can see is "Would giving those NOT being charged on the wednesday a rebate of 75% of their previous week's commission be a solution to the above injustice?" my reason for asking being that is the resolution most pc calimeros are looking for.

PS Calimero was a cartoon character from decades ago whose catchphrase was "It is an injustice it is".

Where did I say I was a trader, the management?

Whether or not I am (as a matter of fact part of my strategy is doing more than one bet during a game, sometimes taking a profit or a loss, if that makes me a "trader" , 90% plus of people on betfair must also qualify ) what I said was correct. And for you to claim "I can't make it pay the other way" - now that is laughable! You haven't a clue how I make money here, and I'm certainly not going to enlighten you...

Should've said

my reason for asking being that is the resolution most pc calimeros are effectively looking for (given betfair had reversed the collection times).

TurtlesBrain, anyone who understands the market maker advantage can become a trader on the flies-round-sh1te markets and that's where most of them are. What would you say the ratio of ir trades to pre-event trades was? I'd say it would be very high.

the pc overpayment made does get offset by not paying quite as much pc in future weeks - the losing acca that was settled in the following pc week will allow him some new winnings without pc

it is a terrible system, and i don't think pc is justifiable for many accounts that are hit by it - but long term this bizarre settlement would make no difference to the OP's total charges (on the assumption that he would go on to win at a rate which incurred some more pc in future)

It involves more skill in identifying situations where you can not just place a bet with a positive expectation (as a decent straight gambler would), but have an exit strategy in place whereby you could expect to place another bet later on in a similar manner.

Would have thought that is pretty obvious, really

Do you think it has never occured to genuine concert goers that the event may be a sell out and that if they buy an extra ticket they'll be able to sell it at a profit? Or can only touts fathom that?

Feck - The Wednesday question i tried to answer was the one where you said "Can any pc calimero please tell us why the gamblers should have to make this wednesday payment?" The other question that you were referring to I thought you had answered yourself in the next sentence and so no longer required an answer.

The Management - Thank you for your answer. Am I correct in assuming that the reason why you don't like Traders "Lording" it over Gamblers is more to do with the simple fact that they are wrong, rather than an objection to one category of BF user claiming superiority over another.

I see UA. What I wa really looking for was a trader who thinks the pc is unfair to justify the additional payment the gamblers would have to make. Given they can't it hardly says a lot for their claims that they should receive a rebate of up to 75% on their previous week's commission.

Feck:

PS Calimero was a cartoon character from decades ago whose catchphrase was "It is an injustice it is".

Half the fun of reading your posts is deciphering the obscure references. Please don't spoil it for us.

I never said double the skill, but it's basic common sense (well to everyone but the likes of feck anyway!) that there are more situations where you can place a straight bet with positive expectation, than there are where you can place a straight bet with positive expectation AND be able to exit in a simmilar advantageous position (or at the very least with a neutral one)

Given this, of course being able to identify this less common scenario would require greater skill yes.  Clearly this would generally apply for markets which then go in play.

And if you think you can easily teach some easy strategies for trading which will make even a modest living, I'd be very grateful to know them, always willing to learn

Well that's my argument torn to ribbons by Carol Smilie's logic.

The premium charge doesn't even go far enough to address that injustice as those paying it are still paying a lower percentage of their profits in commission than all other long term betfair winners.

Of course PC payers pay less than everyone else (at least the ones on 2% commission). This would still be the case if PC was set at 50%, 80% or 110%!

At what level do you think it would be 'just'.

Anyone with their wits about them will do what they can to maximimze profit/minimize costs, no matter what wacky fee structure is thrown at them.

Traders, for want of a better word - or at least, successful traders, must be apt in pricing just as a position taker must be - the difference being how they manage their funds rather than their selections.

Front running with no idea means you'll get pushed and pulled every which way (probably to such a small margin that you'll think you're making a profit for a while)

Ferengi emit a high pitched shriek when attacked......from the Star Trek website.

"If trading was difficult or you had to be terribly clever to do it - there would not be a Premium Charge"

Complete and utter tripe. People who are good gamblers are just as likely to pay it as good traders. Strike rate is the only thing that matters, everything else is irrelevant.

The only people who should be hit by the pc are insiders / fast picture people / cheats etc. A method could easily be devised to just affect them, the fact that betfair can't be arsed to do so just proves that they couldn't care less about these groups, they are only after clobbering as many as possible and abusing their (hopefully not always) monopoly regardless of who else it affects.

Point of fact, these people should be shut down, not simply have 20% taken from them. It happened yet again in one of the spanish matches, someone hoovered over 50k from a team who went from 1.91 or so to 2.06 before they suspended after they conceeded a goal, still, they get their 10k so everything is fine, isn't it?!?

The Management, I can part agree with your post above. If only a very small number of customers operated efficiently enough to be in PC territory, Betfair probably wouldn't have bothered implementing it. Or alternatively, they may have cast the net wider and taken PC to 30%.

If trading was an easy and replicable way of making money though, don't you think that it would become more and more competitive? The effect would have to be one of either no longer being able to get matched, or one of ever increasing competitiveness in pricing.

It's demonstrable that to a large extent that has already happened. In the early days of Betfair / flutter, it was easy to make money simply by using very basic indicators like weight of money (I wasn't around, but I've been told this repeatedly by different people). Then spoofing started, and a whole batch of previous 'consistent winners' were weeded out.

The guy who set up racing traders had his accounts up on his website in the past. He used a £3k bank to make more than £30k per year. Analyzing his PnL, it was obvious that his edge was deteriorating, which I'm sure has been a common experience for many traders. This has to be offset by 'inventing' new methods to remain competitive, which is more of a creative process than following a cookie cutter model of trading.


Put more succinctly: It may be 'easy' to make money trading, but ways of making easy money don't stay around for long.

By:
FINE AS FROG HAIR
When: 13 Jan 11 20:49

No it's the market Mgt.
You may have temporary overpricing, but eventually market forces prevail.
...

FAFH, you are dead wrong there my friend, what the last couple of years have showned us is that the market has no way of correcting itself because its bent from the inside out, its like saying that the majority of criminals will stop stealing on their own and in the short term before they are caught

**********
By:
jimmy69
When: 14 Jan 11 16:45

I think you should all be praising Betfair for providing the platform to make money in the first place.

im sorry for the analogy but what you're saying is the same than those movies where we see jews in the ghettos hitting others jews because they somehow managed to get to flock the herd, they too must of thought that, this is better than dying

*******
By:
FINE AS FROG HAIR
When: 14 Jan 11 21:40

It's quite strange Feck.
If anybody on here poses questions about exactly why the PC is so unfair, in an attempt to try to understand completely the reasons behind the complaints, it all seems to go very quite.
The replies, if any at all, are of the type " you're an idiot for asking these questions, and I'm not going to waste my time answering you".
Or  "the questions have all been answered before ( though they haven't), and don't ask me to do your homework etc etc ".
If somebody would clearly put me right if and where I'm wrong, as in my last questioning post on the matter, I would be very relieved, and maybe even on my way to agreeing and sympathising with their cause.
But alas it appears not be going to happen.
And so on and on and on the pointless debate continues.


Usual smart [;)], answering inducing FAFH reverse psychology...none of those answers were made (i think) FAFH

*********
By:
Bayes.
When: 14 Jan 11 22:26

I'll try to address it Feck.

Betfair's pricing has always been arbitrary and always will be. The fact that they went from a lowly internet start up to a FTSE 250 company in less than 10 years illustrates that whatever they did, they got the pricing right enough to achieve something special. In setting up their original site with its albeit arbitrary pricing structure they encouraged a certain type of operator to emerge - ie. someone who could accurately price up a sport in running. You rather accurately refer to these "new experts" as flies round **** merchants. I have to agree with the description but the irony for me is that surely this is similar to the scenario that led you to become a horse racing "expert".

i dont agree with the description at all but i do with everything else

*********
By:
Feck N. Eejit
When: 15 Jan 11 08:37

What is it about traders that make them think they're so important that the rest of us should pay for the running of the site while they get to operate virtually commission free. Their attitude is identical to that of the parasitic sc.um in the financial sector who are getting pay rises and huge bonuses while the rest of the country pays for their mistakes.


If you know that, then why arent you a TRADER???
The only difference that you fail to grasp is, that here the traders are at a much lower level (for the most part) than that in the financial markets, where you have huge (the biggest players on Earth) market makers that are dumb but make it pay by weight of money alone and politics franchising and thats where your assumptions go wrong, i can give you my personal case, i lost all the time for my first two years, then i started to break even and eventually crawled into profit and i did it alone and learned alone, i've never worked so many hours in my life to get where i am. In my country where 99.9999% doesnt even knows that its possible to win a living this way, i had the balls to quit a pretty well paid job and venture into this, knowing that if i worked hard (minimum of 12 hours a day, many times 7 days a week) eventually i would make it pay, but here you are saying im a scum, how come???

**********
I'll finish by quoting this:

"Low Taxes, stable money". Could it really be so simple? The idea that lower taxes could lead to a healthier, more vibrant economy...it's timeless and arguably self-evident, yet..."

"...I have never seen a correct and complete description of how today's central banks work, nor have i seen a lot of evidence that others understand their workings, even central bankers themselves"

i should say now..except Feck [;)]

turtleshead     16 Jan 11 15:41 
I never said double the skill, but it's basic common sense (well to everyone but the likes of feck anyway!) that there are more situations where you can place a straight bet with positive expectation, than there are where you can place a straight bet with positive expectation AND be able to exit in a simmilar advantageous position (or at the very least with a neutral one)

Given this, of course being able to identify this less common sce nario would require greater skill yes.  Clearly this would generally apply for markets which then go in play.

Your comments above do not accurately reflect the strategy used by many traders. Yet again you have failed to account for the impact of commission.

A position taker requires the price after commission on a selection to be greater than the correct price, for a bet on that selection to have a positive profit expectation. A trader does not require this to be the case to be able to make a profit.

For example, consider a fair coin toss where the correct price for each of the two possible outcomes, heads or tails, is 2:

If heads could be backed at 2.02 on bf, this would not represent a bet with a positive expectation after commission for a position taker (even for someone on the lowest possible rate of 2%).

It would represent an opportunity for a trader who expects to be able to lay off at the correct price of 2 or lower on the majority of occasions.

The trader could also make a profit by exiting from the original bet at a price with a negative expectation, 2.01 (the bf interface doesn't allow this, but backing tails at 1.99 would be nearly equivalent).

(cntd.) The difference between the correct price for a selection to win and the minimum price at which a straight bet can be placed on that selection with a positive expectation after commission is far greater than the difference between the correct price and the minimum price at which it is probable that a profitable trade can be made on that selection.

In the example of the coin toss above, someone on a 5% commission rate would require a price of 2.06 (2.0526) or greater to be able to place a straight back bet on heads with a positive profit expectation after commission.

It is far easier to obtain a price on a selection at which it is likely to be possible to make a profitable trade than it is to obtain a price at which a straight bet can be placed on that selection with a positive expectation after commission. The higher your commission rate the greater the difficulty of obtaining the latter.

It is ludicrous to suggest that it requires more skill to obtain [the lower] prices at which it is possible to trade profitably within a market than to obtain prices at which a straight bet can be placed with a positive expectation after commission.

Of course PC payers pay less than everyone else (at least the ones on 2% commission). This would still be the case if PC was set at 50%, 80% or 110%!

Not true Investor.

The all new liquidity generating Premium Charge = (GrossProfit - 5 * CommissionGenerated) / 2. [:D]

Feck N. Eejit
What is it about traders that make them think they're so important that the rest of us should pay for the running of the site while they get to operate virtually commission free. Their attitude is identical to that of the parasitic sc.um in the financial sector who are getting pay rises and huge bonuses while the rest of the country pays for their mistakes.

Lusitano71
If you know that, then why arent you a TRADER???

Because I can make more money gambling. If traders think they're so hard done to by the pc why don't they become gamblers?

People who are good gamblers are just as likely to pay it as good traders.

  Anyone believing that statement has imo not understood the basics of how the commission system works.

That describes TurtlesBrain to a t Eddie.

Feck,

Out of interest, where do you get your bets on? I understood that you weren't using BF at all these days.

I'm not betting at all just now Contrarian. I'm struggling with my health and cannot find the motivation to either study or sit about drip feeding all day.

Ok.

Far better if they make him a stock market trader management. It would end up on a par with that guy's dog that beat Thommo in a head to head on horse tipping.

How would you price up his odds of success in each scenario? And would you have them both at the same price?

The answer is surely

"Wait for the market to form and take the mid point of back and lay" ?

[;)]Jt45 nice explanation but...

This no longer holds true if a straight bettor is in PC territory. In fact, if he is on sub 3% commission, backing a 2.00 shot at 2.00 represents value.


Feck N. Eejit

Because I can make more money gambling. If traders think they're so hard done to by the pc why don't they become gamblers?

Very good point! That is in fact more or less what I have done. I have never limited myself to a particular modus operandi, but the PC has shifted my activity toward more risk taking and to arbitrage (which has the benefit of increasing volatility on Betfair, racking up commission points, and smoothing overall returns).

In 2009 I completed a period of 52 consecutive profitable weeks (Dec 2008 - Dec 2009), and paid PC in well over 30 of those weeks. The PC was a very significant drain on profits that didn't contribute anything in the way commission does (offsetting against other charges and discounts). I paid more PC than commission that year.

In 2010 I increased profits, paid PC in only 4 weeks, and had 13 losing weeks.
So the effect of PC is to encourage increased volatility of returns. In the good old days I would be happy to back an evens shot at 2.1 and lay it at 2.02. With the PC in place, I can simultaneously increase profits and reduce costs by instead placing only the straight bet at 2.1.

So I am a gambler, more than I ever was pre PC.

The Mgt. says quite simplistically that trading is easy and replicable, and that any trained monkey can do it.
Well if it's so easy on sports markets, it must be because these markets are grossly inefficient. Because it's certainly not easy on any other types of markets I'm aware of.
Sure it's easy to make some winning trades, but it's just as easy to make many losing ones. To come out ahead always, without chasing effectively, that is increasing the incidence and riskiness of trades to try to ALWAYS come out ahead net is perhaps not easy at all.
Until Mgt puts a little bit more meat on the bone as to why exactly it is so easy , he is going to have many disbelievers on here.
To say just that he can do it in his sleep, then any trained monkey can do it, is to both insult the intelligence of the successful and the unsuccessful traders on here.
And yes you're entirely correct to assume that I'm in the latter group, in that it is not something I have cracked to a degree that I can always come out ahead, no matter what.

I would say it is harder to gain trading than  gambling outright.

If you have a good strategy then gambling will look after you ,if you trade you are in the lap of the gods .

one thing that confuses me is that everyone here seems to be either one of them but never both, why is that??
Cant i be both a trader and a gambler??

Hi Management , Agreed about getting it right however,
I did try my hand at trading one time , i thought it was fraught with danger. Fast pic hooverers , fast fluctuations depending once again on fast pics, not being able to green /red out .

Fair play to anyone who makes it work .

At least with gambling you can only blame yourself for making a bad decision .

Mgt
I think you also said that you could look at certain events for about 12 seconds and " know" that you will be able to make some money from trading them that day.
I'm not actually saying that you can or cannot do these things, I'm just saying that you are the exception not the rule, and that most of us are not so gifted.
I don't believe it is simply a question of looking hard enough and all these trading ideas will magically appear before your eyes.
Maybe all these things are right in front of all of us, but it would appear that most of us are too blind to see them, or perhaps we don't eat enough bananas.
If not, logically the opportunities would be all shut down in seconds. That's how it workks in most tradeable markets elsewhere ( but perhaps not sports betting ?)
I confess that if I wasn't able to punt successfully in a non- trading manner I would most certainly give up and be out of here in a second.
But I can and do punt successfully in my own little way, but I am certainly envvious of the traders like you who seem to be able to make profits with apparently no effort or risk. Must be nice, that's all I can say.

KYO

Know your odds  [;)]

I wish people would stop going on about trading. It's all gambling. Trading is just a word that people use to make themselves sound cleverer than others.

No jimmy they're using it in a way that infers they can gamble with much reduced risk, or in some apparent cases, virtually no risk .
An ideal situation.
I'm saying that for those few who can achieve that,there are thousands who can't.

There is no such thing as risk free betting ffs.

thats for sure, whatever you do

Unless you work in the city. Win - get a cut, lose - up theirs, lose the lot - bail us out you fkng mugs and let us do it all over again.

jimmy69 17 Jan 11 17:59 

There is no such thing as risk free betting ffs.

Oh but there is, take the person who laid 50k or so on the spanish team at around evens because he had seen a goal go in before betfair suspended the market, and saw the price go to around 20s straight after, I would say risk free sums it up perfectly!

(yes I know, if you want to be pedantic the side could have scored two more in very quick time before the market was reopened - but in the real world....)

The Mgt
Interesting.
Bear with me on the following question.
On the overs/under 2.5 mkt, isn't the under 2.5 price simply the dutched price of the 6 correct scores that make it up, and the over 2.5 is thus simply the derivation of the under price.
Thus if the mkt is wrong it must mean that one or more the six cs prices that make up the under 2.5 price must be out.
How do you work out which one is wrong ?
Has any of this got anything to do with goal expectation, another area I have never got into at all.
As you can tell, this is not how I bet in any form or manner quite obviously. My approach is totally and utterly different.

The correct score prices are certainly not a derivative of the unders price. If anything, the reverse its true.

Oops, other way around. The unders price is certainly not a derivative of the correct score market.

Turtleshead
I agree that there is as far as I can see no such thing as risk free betting.
But apparently not according to others on here.
They say that trading for pocket change at least is as easy as falling off a log.
Maybe they don't say trading for material sums of money is easy, not because they can't do it theoretically ( or so they claim) but only because they can't always guarantee to get set because of liquidity constraints.

yesterday in the Panama-Nicaragua match i made two straight bets on the under5.5 and under4.5 and started trading the under3.5 at 76min, the score was................1-0 [:o]

the under 5.5 was at 1.10 (it was so good that i started to wonder, whats going on here!!), if this isnt value then i dont know what value is

the match finished 2-0

Last post meant for jimmy.

Lusi
I don't know.
What should have the price been and why ?

FAFH,

There is no obvious asymmetry such that one of the football markets (e.g. under/over) is clearly derivative of another. However, I think it is reasonable to assume, in general, that the more financial interest there is in a particular market, the more 'accurate' that market will be. Therefore, if you have to take one market as 'authoritative', it should be the most liquid one.

Contrarian/ Bayes
What I was getting at is that the under 2.5 price must be exactly the dutch of the 6 cs prices that make it up.
So, ipso facto, if the unders price is wrong then one or more of the cs scores must be wrong.
How does this fit with the goal expectation modelling process ?
As I admit I'm out of my comfort zone on this, so forgive if I'm asking the obvious.

What I was getting at is that the under 2.5 price must be exactly the dutch of the 6 cs prices that make it up.
So, ipso facto, if the unders price is wrong then one or more of the cs scores must be wrong.
How does this fit with the goal expectation modelling process ?


Well, of course bot operators, amongst others, ensure that there are no risk-free arbs available between the under2.5 price and the 6 CS scores (at least not ones pre-match). However, it is still not obvious how to share out the total under 2.5 probability amongst the 6 possible correct scores.

And

Under 2,5 is the sum of the scorelines that represent that bet.

In order to model the correct scores, as well as the match odds, of course, you need more inputs than just goal expectancy for each side. You need to model how the teams will respond to changes in the scoreline. (Across all major leagues, football teams tend to decrease their scoring rates when they go ahead, and increase when the go behind (especially in the Italian leagues!). This results in a shorter draw price than would otherwise be predicted by a model in which teams' scoring rates were independent of the scoreline.

Probably all just go to show that models in sports betting are probably quite like the pricing models they had during the recent sub -prime mortgage bond implosion. Useless at worst , misleading at best ?

I read a post once that said all prices in football are derived from the cs market ?
True ?

Corners, cards and other markets need to be calculated seperately.

I refer you to my earlier reply:


Contrarian 17 Jan 11 19:07
FAFH,

There is no obvious asymmetry such that one of the football markets (e.g. under/over) is clearly derivative of another. However, I think it is reasonable to assume, in general, that the more financial interest there is in a particular market, the more 'accurate' that market will be. Therefore, if you have to take one market as 'authoritative', it should be the most liquid one.

Of course Rocket. Obvious but true.
So not true then Contrarian.
Of course being a contrarian, as you are, most authoritative is not the same to you as most accurate is it ?

By: This user is online. FINE AS FROG HAIR
Date Joined: 12 Mar 07 Add contact | Send message When: 17 Jan 11 20:50 Of course Rocket. Obvious but true.


Wekk if you were talking about markets like match odds and goals then yes, obviously, because they all offer the same bet.

Match Odds is the sum of the scores for the home team to win etc or rather Match Odds is the sum of the scores for the home team is Match Odds.

OK Rocket lets move on.
Bottom line you've got to be able to price up CS then to get anywhere ?
Seems not according to others. Or have I got that all wrong as usual.

Who knows FAFH. Try it and see.

Nah you know me.
Too much work. Better to pick the brains of others, like you.

my assumption about how unders and CS prices relate has always been that the unders/overs price is primary, based on stats, and that a secondary model assigns the %age chance to each individual outcome within the two categories.

no evidence for that, but from watching the markets that's my  gut feel about what happens.

Contrarian:

However, I think it is reasonable to assume, in general, that the more financial interest there is in a particular market, the more 'accurate' that market will be.

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I'd agree with that with the caveat that the accuracy will be dependent on the number of more or less equally significant players separately forming an opinion.

the practical significance of that caveat being that you do sometimes see secondary markets which actually seem to be skewed by one player getting involved at a much bigger level than everyone else.

so in these cases, an increase in financial interest judged purely in terms of money involved actually decreases the efficiency of the market.

FINE AS FROG HAIR     17 Jan 11 20:43 
I read a post once that said all prices in football are derived from the cs market ?
True ?
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I would have said the other way round.

I take many of my prices and calculations from the  odds and 2.5  market before coming to a conclusion on the cs

Funny but I remember at the time of the post, quite a long time ago, that it went totally unchallenged.
It was as if it was a given.
I really have no opinion as I don't ever work out prices, but it would seem to me that the stats on specific scorelines must be just an exhaustive, and thus presumably useful in an analytical sense, as any other stats.
So why not use them as the base for all other " derivative"  prices ?

because there are more possible outcomes, so it's more complex to model and there are more chances to get one wrong.

looking at a couple of random games on the 23rd, it's instructive that the MO and OU markets are more fully formed than the CS market.

FAFH , match odds markets tend to be well underway while about the same time the c/s markets are springing into life

Contrarian
FAFH,

There is no obvious asymmetry such that one of the football markets (e.g. under/over) is clearly derivative of another. However, I think it is reasonable to assume, in general, that the more financial interest there is in a particular market, the more 'accurate' that market will be. Therefore, if you have to take one market as 'authoritative', it should be the most liquid one.

This simple assumption forms the basis of almost everything I do on here. Viva, I don't believe the factor you mentioned is one that needs to be considered (for football at least)

By:
jimmy69
I wish people would stop going on about trading. It's all gambling. Trading is just a word that people use to make themselves sound cleverer than others.


Trading on a betting exchange is a not the same thing as gambling, it's a subset. Put another way:
Trading on a betting exchange = gambling (correct)
Gambling = trading on a betting exchange (incorrect)
If I say 'I trade on a betting exchange', that provides more information than if I say 'I bet on a betting exchange'.

The people who say risk free betting is not possible are correct only in a very strict and absolute sense as there is always some risk.

For all practical purposes you can consider a large part of betfair's 'betting' activity as risk free though. Betfair themselves refer to it as 'perfectly managed risk'.

Betfair is a bookie and matches our bets as the erm.. middleman [;)]. We're not really betting against each other, but against Betfair which is able to match every bet to an identical opposing bet, thereby betting risk free, as opposed to Willhill or Lads, who take on risk. Betfair also do with multiples, betfair Italy etc. but the vast majority of their betting activity is risk free.

Perfectly managed risk is the same as no risk by the way[;)]

Perfectly managed risk.
That's an oxymoron if ever I've heard one.

You like rambling on don't you The Investor...

Viva, I don't believe the factor you mentioned is one that needs to be considered (for football at least)

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I think that's probably true, at least for the main markets in reasonably high profile football.

seen a few markets in other sports recently where you could argue positions from big players were leading to a less rather than more efficient market.

You're right FAFH, if risk is perfectly managed, it does not exist.

The Investor     17 Jan 11 14:50 
Jt45 nice explanation but...

This no longer holds true if a straight bettor is in PC territory. In fact, if he is on sub 3% commission, backing a 2.00 shot at 2.00 represents value.

The Investor, that is absolutely correct but, bar match fixers and their like, successful straight gamblers are much less likely to be liable to pay the premium charge. Whilst successful gamblers can and do incur the premium charge, the nature of the commission system on bf means that it is far more probable that a trader of comparable ability will incur the premium charge for an extended period.

agree jt45.

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Regarding this whole gamblers being more skilled than traders thing, my guess is that a very significant proportion of successful gamblers trade out of (some or most of) their positions.

If you say people need a larger edge to win placing straight bets than they do to trade that's correct (ignoring the effects of PC), but that doesn't imply a greater skill level. If you are not taking advantage of Betfair's pricing structure when it is equitable for you to do so, you are simply weighing yourself down.

In my own case, I can think of only two reasons to place straight bets instead of trading (and some more for PC reasons)

1. The market is illiquid so you probably won't get matched on both sides.
2. You don't want to spend time monitoring the market for an optimal time to trade out.

The Investor, I agree with all of that.