Quote:
On 2004-04-29 12:28, Mark wrote:
Horse shows $3.60 for place therefore IAS would pay $3.78 (+5%), so payout is $37800 not $36000.
Bets back $5000, now paying $3.30, IAS to pay $3.46. (This is what I'm getting at, backing a horse at $3.30, & laying it at $3.46 as part of the same bet, to reduce the exposure???.)
I understand that the original exposure was a potential loss of $23800 (hold $14000 less pay $37800), new exposure $8300 (hold now $9000, less pay $17300), BUT the hold is down $5000 therefore lowering potential profits. So what has happened is loss limited by $15300, and profit lowered by $5000, effectively a place bet @ $3.06 ($15300/$5000), on a horse showing $3.30.
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Mark,
My example was on a win market.
Using your example,
$3.78 payout $37,800 loss $27,800
Bet back $5,000 new odds $3.46 payout $34,600 less bet $24,600
Less $5,000 @ $3.30 $11,500 profit
So if Horse A loses I win $5,000 on race for that horse.
If horse A wins I payout $34,600 less $11,500 $23,100, so my loss is $13,100
Scenario 1 I don't layoff and I either win $10,000 or lose $17,800
Scenario 2 I layoff and either win $5,000 or lose $13,100
By taking scenario 2 I have either lost $5,000 in profit or saved $4,700 in payouts depending on the outcome.
I see what you're getting at, by betting my profit goes down 50% but my risk is greatly reduced.
In scenario 1 I'm betting $10,000 @ $1.78
In scenario 2 I'm betting $ 5,000 @ $2.62
BUT my loss risk is reduced by $4,700
It only makes sense to do this where you are overexposed.