Arb

[Benny]

if I back #8 in race 8 at Albion Pk on the tote for $58 @ a $170 and lay it for $40 @ $2.50 I'll make a small profit.

[Shaun]

where is it $170

[Benny]

it's meant to be $1.70 not $170, sorry

[Shaun]

If the lay price is higher than the back price no profit possible.

[Benny]

I'm new at trading, so how do I make a profit.

[goty0405]

Back price ALWAYS must be higher than lay price. The bigger the difference the bigger the profit. Follow the example...

Step 1: Back $100 @ 3.0
If it wins = +200
If it loses = -100

Step 2: Lay $100 @ 2.0
If it wins = -100
If it loses = +100

Combined
If it wins = 100 (200 - 100)
If it loses = 0 (-100 + 100)

So there you have a "win:break-even" situation. If the horse wins you make $100, if it loses you break even. If you want to take trading one step further you can spread that winning situation around so that you make a smaller profit on each horse. You do this by laying a little extra.

The formula to figure out how much to lay is:
AmountToLay = CurrentPossibleProfitIfHorseWins / CurrentLayOdds

So in the above situation...
AmountToLay = 100 / 2.0 = 50

Step 3: Spread the risk (lay $50 @ 2.0)
If it wins = -50
If it loses = +50


Overall traded result
If it wins = 50 (200 - 100 - 50)
if it loses = 50 (-100 + 100 + 50)

A guaranteed $50 no matter which horse wins!

[Benny]

Thanks. It explains it lot.

Now here's a another bet from the same race.

I'm not sure if this correct using the example

#1 to win $50 @ $3.90 = $195
#1 to lose $50 @ $2.50 = $125

Overall result

If it wins $50-(100-50)
If it loses $50-(100+50)

[Shaun]

Take a look at this

[Benny]

Just out of interest of the 2 bets. #8 won and #1 lost.