August 24, 2004 at 20:36 #1508
I have been thinking about this for a while and wondered what you all think?
At present there are two main ways to bet;
There’s betting at SP and then there’s betting on the exchanges …
On the exchanges there is no over round (the book is 100% and there’s no profit built into the prices) .. :biggrin:
On SP there is on average about 130% over round (there’s 30% profit built into the prices) .. :(
All well and good. BUT .. if the SP favourite has a profit margin of say -6% on average and the favourite on the exchanges goes off at around the same price, which they do, what does this mean?<br>:confused:
In addition to this ‘over round’ there’s 5% commission, giving you a total disadvantage of 10% or thereabouts when betting on favourites’ or so it seems.
That’s the first part … :biggrin:
If this is right, it also means that the outsiders are over priced and represent better value than they should be.
I’m thinking that bets on favourites should be struck at SP (or a lower commission rate) and bets on non-favourites should be placed on the exchanges.
And that’s the conclussion that I’ve come to.
What do you think? am I right or should I get out more ..:biggrin:August 24, 2004 at 23:31 #54954Nick HattonMember
- Total Posts 399
You’re right Dave !
The only bit I disagree with is regarding outsiders being a better price than they should be on the exchanges.
I really don’t think they are, it’s just that they’re incredibly underpriced at the bookies.August 24, 2004 at 23:56 #54958snowmanParticipant
- Total Posts 554
I think it’s generally accepted that the bigger the price, the bigger the advantage on exchanges. Fenrir a winner of a maiden a couple of days ago returned at 100/1 was certainly available on betfair at 189/1. Whilst Never a fav today, traded on course at around 10/11 – Evs and on the exchanges was available at very similar prices 2.00 – 2.04.
I’m not sure that you are right when you talk about 30% overrounds being the norm at conventional bookies, though I have no figures to back this up. Also there is sometimes a small overround on the exchanges, 1 or 2 % typically.
However the main figure I would take issue with is the 6% you propose that the fav is overround by. One can see by looking at the individual prices on offer what the total overround is, but how can you break that down individually?
A small 5 runner race
A) Evs – 50%<br>B) 3/1 – 25%<br>C) 4/1 – 20%<br>D) 7/1 – 12.5%<br>E) 9/1 – 10%
We can certainly say that this book is 17.5% overround, but it is a matter of opinion surely, where that 17.5% is. i.e. how it is distributed. You may feel that the fav should be 2/1 and that would take up the whole of the overround, well 17% of it anyway. Someone else may take a different view, feeling that the fav is fine but that everything else should be a bit bigger.
I agree largely with your conclusion however. Outsiders should be backed on the exchanges, favs can be backed on the exchanges if, in your opinion, the price will reduce at post time, but for the ‘live’ market back at sp (or sp+ with SuperOdds), you will lose out very little on price, if at all, and save yourself the commission.August 25, 2004 at 16:59 #54960
Snowman … the figures come directly from Racing System Builder records and are for all races over a 12 year period. RSB also have the favourite at -10% ROI with a strike rate of around 27%. Obviously, this includes all favourites and strike rates go up and down with, price, field size, race type … and on and on the list is endless.
I said ‘6%’ because I reckon that you would be able to get that with a moderated approach and not one that picks every favourite.
Nick … thanks for the input, I was pretty sure but wanted a second opinion. The point I was making about the outsiders is this.
If the favourite goes off at SP on the exchange and has an over round (in it’s own right) of -6% and the exchange book is 100%. Then the outsiders are collectively +6%.
I also feel that the effect of commission is largely ignored and this could be a big mistake. Does this mean that if you win (or lay correctly) and cop for the 5% that you are betting at 105% over (or a 95% under) round at your point of exit from the market. And it only doesn’t feel like an over round because the prices are fairer ??
Am I thinking along the right lines, or should I get out more ?? <br>:biggrin: :biggrin:August 26, 2004 at 01:47 #54962Nick HattonMember
- Total Posts 399
No, I reckon you’re thinking along the right lines.
Might be best to get another opinion though as I should definitely get out more ! :biggrin:August 26, 2004 at 18:11 #54964
I thought I was … it can only be a matter of time before we see and end to the 100% book on the exchanges, even if the outside end of the market is only for a couple of quid at the moment.
I think it will pan out at around 105% across the board, not including commission.
Anyway, like you say Nick, I’m off out .. :cool:
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