Hi all,
I've done some research on how the actual chasing of prices to lay horses on Betfair impacts the bottom line.
While bettors are clambering over themselves to snip a few cents here and there, I've come up with some amazing research.
Notwithstanding my hypothesis does not extend to those laying to a book or arbing or hedging, just those that are straight out laying.
As I've mentioned before, generally weight of money indicates a horse will win. Therefore getting "unders" about your lay price actually means less profit and more risk. On the flip side getting more "overs" on your win bets means less profit and more risk.
I have identified that this is where part of my profit is evaporating.
Here is my hypothesis:
The worse the win price on Betfair, the more profit. (to a point)
The better the lay price on Betfair, the less profit. (to a point)
This flies in the face of every mathematical solution we've been familiar with in the past.
Why is it so?
a) Betfair is an exchange, it is not a pari mutual pool, therefore the price on other runners is not necessarily influenced by movements on one particular runner.
b) Seasoned exchange users know where to get accurate pre post prices and know if they deduct or add on X percentage, they will make a profit.
c) UK pools are up to Caulfield Cup financial level at some meetings, so the weight of money (speculation) is greater with professional market setters offloading huge amounts into the pools. (Sometimes up to 100K on a single horse at a single price).
d) As there is as much as 5% takeout (commission) and as low as 5% minus 60% commission, there is a greater margin for error and still profit versus 14.5% takeout from the start.
I would appreciate any other ideas on this.
The proof
I took my last 500 win bets and my last 500 lay bets,which were staggered from Opening Bookie prices to greater percentages of profit or better prices.
These bets were left sitting in the market with no manual intervention.
Here is the proof by list, with the rank of 1 being the opening price and 2 onwards being better:
RANK LAYPROFIT
1 14.07
2 2.30
3 4.30
4 4.72
5 1.98
6 0.64
7 1.80
8 2.48
9 4.07
10 4.18
11 3.76
12 1.83
The exact opposite of normal expectation!
The figures correspond almost exactly on the Bet side of the ledger as well.
So why is it so?
I will answer this one after some feedback - I think I have an angle on why
