Vigorish or overround

[colosus68]

Its the percentage a bookie takes on any event.

To simplify it… lets look at the Cambridge-Oxford boat race.
If the bookies think its an even bet they will price it up 5/6 Cambridge and 5/6 Oxford. No draw
If the weight of money on both teams is similar then the bookies will have a vigorish or overround of around 9 %.

Have you always wondered to yourself how these bookie traders operate ?
They sit there with their eyes glued on their specific markets.

They are not bookies anymore. They are glorified accountants.

They love this virtual racing as there is a built in margin of 18 % on Portman Park and Steepledowns. Imagine they have nearly 100 % profit on 5 RACES or “spins”.
They absolutely worship this cartoon racing !!

If you want to be a good punter you need to know what the “VIG” or the OVERROUND is !

Now you know

always glad to be of help

Colosus

[chestnut]

Bookmakers were once officially called ‘turf accountants’

[Gingertipster]

Welcome Colosus,

I agree, understanding how bookmakers work – and particularly knowing the table of odds and chances off by heart – helps enormously in punting for profit. TRFers will tell you I’ve been banging on about it for years.

However, where I disegree slightly with what you’re saying is – in my experience identifying when the overround is small doesn’t neccesarily help that much in finding the best value/a good bet.

Nowadays markets nearer the off are more accurate. Markets getting to know how they’re likely to run – including horses with a better or worse chance than form study suggests – home reports having influenced the market. This means the odds available are nearer the runners fair/true odds… Which indeed may help the vast majority of punters lose less than when the overround is larger. However, for punters who actually know what they’re doing – and can identify good value when they see it – the opposite can be true…

Just because the overround is large does not mean the value for any individual racehorse is small. Overrounds are often quite large when betting first opens on a race… And yet it is often beneficial to bet at early odds because there are more ricks, more bookmakers/exchange mistakes. ie When betting early you’re betting against fewer people – only the bookmakers odds compilers and other early bird punters. If I work a horse out as exceptional value. eg Something I believe has say a 14% chance of winning (fair 6/1) that’s available early @ 12/1. If I wait for the overround to become smaller (ie for most prices in the race to lengthen) then I am likely to lose the 12/1 for my individual horse. In other words: Being a good judge of value – if I think the horse is exceptional value @ 12/1 there will be more good judges as the day/night goes on believing the same… If I don’t take the 12/1 they will and will soon become 10/1, 8/1 etc.

Value Is Everything

[colosus68]

Jaysus Ginger.. you have me bamboozled !!

Now I understand that there are many configurations how all jockeys could ride a race.
I always thought there were three ways to ride a horse.
Out in front, keep it handy or hold it up.

colosus

[Gingertipster]

LOL
I think that’s referring to your other thread, Colosus; so won’t respond here.

Value Is Everything

[colosus68]

yes I hit the submit button and realised that I was replying to the other thread. not to worry !

[colosus68]

Just having a few drinks here and looking at Wikipedia.

Researching the Kelly Criterion or otherwise known as the Kelly Formula.
Apparently Warren Buffett and Bill Gross applied it.
I am a nut job on working out the optimum stake required on a horse. The wager size percentage.

In layman terms its as follows

For an even money bet, the Kelly criterion computes the wager size percentage by multiplying the percent chance to win by two, then subtracting one. So, for a bet with a 70% chance to win (or 0.7 probability), doubling 0.7 equates 1.4, from which you subtract 1, leaving 0.4 as your optimal wager size: 40% of available funds.

So the optimum stake is 40 % of available funds.

Colosus

[Gingertipster]

Before I’d heard of Kelly I came up with my own staking plan.

When I first started betting it was a simple same stake every bet. But success or failure each year all depended on how many big priced winners I could come with. For every 10 points bet it obviously won 20 at 2/1 and 330 @ 33/1. Latter being sixteen and a half times the profit of the former.

So I changed to betting to win the same amount. Trouble is this time – because I was betting comparitively large amounts on the shorties – everything depended on them. Not particularly because of how much was won, but how much was lost when they did not win. I’d be putting on almost 17 times the stake on the 2/1 shot than I would the 33/1 shot.

Seemed to me I should be putting on more money on horses that had a greater chance of winning, well… because they’d win more often… But also should win more money on outsiders because although the risk of losing is greater the stake amount risked is a lot smaller…

…And just as importantly the amount of value in a bet should make a difference too. Because ummm… it’s a better bet.

So I came up with this staking plan which is in some ways similar to Kelly’s principles:

My idea of the horse’s chance in percentage terms…
Minus the available odds in percentage terms…
X 8…
Plus My idea of the horse’s odds in percentage terms.

(It has evolved to 8 over the years).

So A horse I believe has a 40% (fair 6/4) who’s available @ 2/1 (33.3%) would get…
40 – 33.3 = 6.7
6.7 X 8 = 53.6
53.6 + 40 = 93.6
Rounded up to 94
Stake being 94 points @ 2/1 which makes a profit of 188 points

If it was less value the stake and potential profit would be less:
If the horse I believe has a 40% (fair 6/4) chance was only available @ 15/8 (34.8%) it would be…
40 – 34.8 = 5.2
5.2 x 8 = 41.6
41.6 + 40 = 81.6
Rounded up to 82
Stake being 82 points @ 15/8 which makes a profit of 153.75 points

Greater value would result in more money staked and a greater profit:
If a horse I believe has a 40% (fair 6/4) chance was available @ 9/4 (30.8%)…
40 – 30.8 = 9.2
9.2 x 8 = 73.6
73.6 + 40 = 113.6
Rounded up to 114
Stake being 114 points @ 9/4 which makes a profit of 256.5 points

Where as something I believe has a 5% (fair 20/1) chance available @ 33/1 (2.9%) is…
5 – 2.9 = 2.1
2.1 X 8 = 16.8
16.8 + 5 = 21.8
Rounded up to 22
Stake is 22 points @ 33/1 which makes a profit of 726 points

If lesser value less is staked:
Something I believe has a 5% (fair 20/1) chance available @ 25/1 (3.8%) is:
5 – 3.8 = 1.2
1.2 x 8 = 9.6
9.6 + 4 = 13.6
Rounded up to 14
Stake is 14 points @ 25/1 which makes a profit of 350 points

If greater value means more is staked:
Something I believe has a 5% (fair 20/1) chance available @ 50/1 (2%) is:
5 – 2 = 3
3 x 8 = 24
24 + 6 = 30
Stake is 30 points @ 50/1 which makes a profit of 1500 points

I have a margin for error of two prices above my idea of its price. So any horse I think has a fair 40% 6/4 chance is not backed at 13/8 but would be at 7/4 or greater. Anything thought a fair 5% 20/1 would not be backed at 22/1 but would at 25/1 or greater.
The amount each point is worth depends on my bank balance at the time.

Value Is Everything

[Gingertipster]

Kelly is:

Odds available X Probability of winning…
Minus Probability of losing…
Divided by odds

So if I’ve got this right… Something thought of as a fair 6/4 40% chance available at 2/1 gets:
2 X .40 = 0.80
0.8 – 0.60 = 0.20
0.2 ‘/, 2 = 0.1
10% of bank staked @ 2/1

If Something thought of as a fair 6/4 40% chance is available at 15/8:
1.875 X 0.4 = 0.75
0.75 – 0.60 = 0.15
0.15 ‘/, 1.875 = 0.08
8% of bank staked @ 15/8

If something thought of as a 6/4 40% chance is available at 9/4:
2.25 X 0.4 = 0.90
0.90 – 0.60 = 0.30
0.3 ‘/, 2.25 = 13.33
13.33% of bank staked @ 9/4

If something believed to have a fair 5% 20/1 chance is available @ 33/1:
33 X 0.05 = 1.65
1.65 – 0.95 = 0.7
0.7 ‘/, 33 = 0.02
2% of bank staked @ 33/1

If something believed to have a 5% chance is available @ 25/1:
25 X 0.05 = 1.25
1.25 – 0.95 = 0.3
0.3 ‘/, 25 = 0.012
1.2% of bank staked.

If something believed to have a 5% chance is available @ 50/1:
50 X 0.05 = 2.5
2.5 – 0.95 = 1.55
1.55 ‘/, 50 = 0.03
3% of bank staked.

Value Is Everything

[colosus68]

Good man Ginger

When racing returns I will pass on word for Dundalk.

You can then tell me the correct stake in your mind.

Colosus

[colosus68]

Its time punters woke up ! Now they have time at hand to evaluate their mistakes.

1. Always know at any given time what you have in your pocket.
2. Work hard to get your first winner on the day. Its psychological, Get the first one up and sit back and relax. Get the racing post and have a look at the cards for the remainder of the day. Leave the bank card at home.
3. Don’t ever chase on a race or connected markets that you have absolutely no solid opinion on.
4. Back in a big shop that has hardened punters in it. Make sure the staff are friendly and are only delighted to see you win. Throw them the odd fiver when you win large, keep them on board.

5. Stay away from little shops and “awkward” staff. You would be amazed at the winners you can find when you are sitting in a large shop in the right company.

6. The big one of all… take it easy on the beer when you are punting. That’s the Molotov cocktail !!!
The drink gives you a confidence that even God cant explain.
Win a few bob then have a few drinks.
If your on day out with friends, do a couple of patents for small money to stop you going bonkers and dropping 2 to 3 hundred and wake up the next day out of pocket. Its what I call EXPENSIVE DRINK ! Do the maths..10 pints for 300 euro…if you drop 300 on the day.

7. Make yourself a simple target on weekly racing..lets say 50 euro to a small punter. Look at the 50 as 6 pints of stout and a packet of fags or a snack box on the way home.

8. With these things in mind overtime you will enjoy your few bets..become more self controlled. Get to see big trainers that leave nothing behind when they are on.. the likes of Roger Varian, Mark Prescott, Michael Halford and many others.

There is no better feeling than a punter has is sitting in pub where the bookie is paying for his few pints.
Picking up 50 a day equates to over 15k tax free per year.

Being on this site is a great privilege for all of us.
I know many men over the age of 60 that cant use a calculator let alone a pc or a laptop. These are e/w merchants and have no idea about 3 place fixed odds betting in the extra markets.

Remember your money is hard earned so when you are punting use logical thinking, read form and listen to those that know what they are talking about, don’t ever be rushed..form your own opinion and act on that.

Over and Out

Colosus

[Author]

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