Hi JFC,
Could you please provide some assistance with the following problem:

Team A can be layed at $1.40
Team B can be backed at $11
Team C can be backed at $5.1

If i wager $50 on both Team A and Team B to win, i have an average price of $8.05. Am i correct to suggest that i have an edge of approx 16% if i back both Team B and C over laying Team A.

I am of the opinion that Team A will not win. So if i am correct and Team A does not win, then obviously the "play" here is to back both the other teams to win.

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I think i've figured it out.

Thanks.

P.S No is the answer.

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Mad,

If you stake $50 on both B & C then your outcomes are:

-$100 A wins
+$450 B wins
+$155 C wins


Instead you should be staking so that you get a near identical outcome irrespective of whether B or C wins.

In rough figures the odds imply that a C win is twice as probable as B, so the B:C stakes should be 2:1 or 67:33.

The combined $100 stake thus produces:

-$100 A wins
+$263 B wins
+$242 C wins

Not too far away from identical wins for B & C.

Your Edge cannot be quantified unless you have both True Odds and Available Odds.

If you think that in this ~100% market that A is bad value, then the B & C combination would present you with good value.

So your correct strategies are:

- Back B&C as above.
- Lay A

On Betfair I would probably offer both correct strategy Lays and Backs but at minimum stakes. Then after matches I would adjust my positions to try and end up close to :

-$100 A wins
+$250 B or C wins

Thanks for the reply JFC.

Was just tinkering around with a few figures. I remember doing something along these lines in Finance at Uni, a few moons ago now. However, after several hours it finally dawned on me, "Solver" was the key. But it seems as if a quick look at the returns at $50, should of tipped me off much earlier. I'm like the tortoise, slow but i'll eventually get there.

As for getting set in the market, the example represents Champ League soccer, you probably guessed that, so liquidity is not an issue and the correct position is easily attainable, assuming the strategy is indeed correct.

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