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Changing Odds question

Bubica

19 Jan 15 15:30

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Date Joined: 05 Jan 15

| Topic/replies: 16 | Blogger: Bubica's blog

“A punter might believe that a cut of evens to 8/11 is inferior to dropping from 6/1 to 5/1. In actual fact, the latter is marginally worse.”

I don’t understand how going from 6 to 1 to 5 to 1 is marginally worse than cutting from evens to 8/11. The former implies a 2.4% change in implied win probability while the latter implies a 7.9% change in implied win probability.

What am I not getting here? Can anyone help me make heads or tails out of this?

Thank you.

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Replies: 8

By:

kenilworth When: 19 Jan 15 15:40

1/1 is 50% of the book,
whereas 8/11 is 58%.

5/1 is 17%
whereas 6/1 is 14%.

By:

Bubica When: 19 Jan 15 15:57

Jan 19, 2015 -- 3:40PM, kenilworth wrote:

1/1 is 50% of the book,whereas 8/11 is 58%.5/1 is 17% whereas 6/1 is 14%.

Hi Ken. Thanks for getting back to me. Still confused though.

How is a 3% change in book "marginally worse" than an 8% change in book? That is what I am not getting but perhaps I am not understanding the author's point and/or looking at it from the wrong point of view.

By:

dave1357 When: 20 Jan 15 12:48

If the true odds are evens and 6-1 then

with the 8/11 shot you get a long term return, for 1 unit bet, of 1.73 x .5 = .86

with the 5-1 shot you get 6 x .14 = .85

By:

Bubica When: 20 Jan 15 13:39

Jan 20, 2015 -- 12:48PM, dave1357 wrote:

If the true odds are evens and 6-1 thenwith the 8/11 shot you get a long term return, for 1 unit bet, of 1.73 x .5 = .86with the 5-1 shot you get 6 x .14 = .85

Dave,

That answers my question. Thank you very much.

Good luck and good trading.

By:

TheInvestor2 When: 21 Jan 15 23:39

“A punter might believe that a cut of evens to 8/11 is inferior to dropping from 6/1 to 5/1. In actual fact, the latter is marginally worse.”

That's very simplistic. If you can get 2.00 on a 1.727 shot, that is much more valuable that getting 7 on a 6 shot in almost all real world scenarios (rather than marginally better).

1) Bookies will let you bet a lot more at evens than at 7. If betting on Betfair, there is likely more liquidity at evens than 7.
2) If the amount you could bet exceeds the amount you want to bet due to limited bankroll, Kelly staking will allow you to bet 5-6 times more on the evens bet than on the 7 bet, so your profit expectancy is much higher on the evens bet.

By:

Bubica When: 22 Jan 15 11:50

Jan 21, 2015 -- 11:39PM, TheInvestor2 wrote:

“A punter might believe that a cut of evens to 8/11 is inferior to dropping from 6/1 to 5/1. In actual fact, the latter is marginally worse.”That's very simplistic. If you can get 2.00 on a 1.727 shot, that is much more valuable that getting 7 on a 6 shot in almost all real world scenarios (rather than marginally better).1) Bookies will let you bet a lot more at evens than at 7. If betting on Betfair, there is likely more liquidity at evens than 7.2) If the amount you could bet exceeds the amount you want to bet due to limited bankroll, Kelly staking will allow you to bet 5-6 times more on the evens bet than on the 7 bet, so your profit expectancy is much higher on the evens bet.

Added value post. Thank you.

By:

Bubica When: 22 Jan 15 11:58

Jan 21, 2015 -- 11:39PM, TheInvestor2 wrote:

“A punter might believe that a cut of evens to 8/11 is inferior to dropping from 6/1 to 5/1. In actual fact, the latter is marginally worse.”That's very simplistic. If you can get 2.00 on a 1.727 shot, that is much more valuable that getting 7 on a 6 shot in almost all real world scenarios (rather than marginally better).1) Bookies will let you bet a lot more at evens than at 7. If betting on Betfair, there is likely more liquidity at evens than 7.2) If the amount you could bet exceeds the amount you want to bet due to limited bankroll, Kelly staking will allow you to bet 5-6 times more on the evens bet than on the 7 bet, so your profit expectancy is much higher on the evens bet.

Also, as an aside, I do not think that most people, myself included, can judge their edge with the granular accuracy necessary to utilize a full kelly strategy. Full Kelly is borderline insane betting for the majority of punters.

By:

kenilworth When: 22 Jan 15 18:00

An 8/11 chance represents 58% of the theoretical
market, not a insignificant figure, whereas a 5/1
or a 6/1 chance may be 4th or 5th in the book,
Regards the bigger prices (5/1 and 6/1) they may
be running unbacked, not so the 8/11 shot which
could be dominating the market, in fact 5/1 and
6/1 may be seen on boards at the same time, but
not 8/11 and 1/1.