Monday, 21 February 2011

Golfing God

My last post was apparently a little confusing in that I didn't make it clear that I had layed Everton at 1.16 with one kick to come. That was my insurance premium. In two outcome events, I tend to focus on the side where the price is between 1.01 and 2.0 and as a result I talk of laying (Everton) at 1.16 rather than backing (Chelsea) at 7.2.

My PC comment also caused some confusion, and the best explanation of the logic here is the comment from Ben back in December, when he patiently spelled out to me (a slow-learner) how this can work:

Imagine someone who pays the premium charge, and also is on 5% commission, betting on the new Betfair 'virtual coin flip' exchange games markets (I really wouldn't be surprised if they introduced this... anything to make BF more money!)

The gambler backs £100 at 2.06, and being an evens shot, they can expect to win as often as they lose. So we'll look at the results after one win and one loss:

Gross profit from the win: £106. Commission at 5%: £5.30, profit: £100.70.
Losing bet: £100 loss. Gross win from both bets: £6. Total profit: £0.70

This punter has paid a massive 88% of their winnings in commission!

But wait, the premium charge comes to the rescue...

Let's say this gambler already has £1000 gross win for the week, with £100 paid in normal commission: £1000 gross win, £100 commission, that's 10% and so BF add on a £100 PC charge => £800 net profit.

Now, add in the two coin flip bets: £1006 gross win, £105.30 normal commission. That's 10.47%. Betfair will still want their 20%, which is £201.20. Net profit now is £1006 - £201.20 => £804.80

Do you see? If this person DID NOT pay PC, they would have made £0.70 from their bets. But because they pay PC, their additional profit is actually £4.80

Paying PC has meant that the gambler has made *more* profit from these bets. In other words, they have a bigger profit margin, and could be making money from these coin flip bets by backing as low as 2.02.
A final comment from Paul had me scratching my head to be honest - and the splinters took time to remove. He asked:
Hi...I have a question. If i trade at match odds before game starts, the big traders figure that I placed 1k? They will go in the opposite direction of what I buyed? Please answer :(
With millions traded on the more liquid markets, 1k is not going to move the Match Odds market, but I guess on a Bulgarian Third Division match (if there is a Bulgarian Third Division) it might.

No joy in the draw bets today, with goals in the 82' and 86' taking away two wins. C'est la vie. Football Elite had Chievo to win, but the draw seemed a better bet to me, and Genoa's 86' winner v AS Roma was the decider in a 4-3 shoot-out - not the low scoring game I was looking for. Once I was able to log in to Betfair (what the hell are they doing?) for the Leyton Orient v Arsenal game, I was able to recover most of those losses on the Under 2.5 market, and then moved into profit on the day with Under 2.5 coming in on the Napoli v Catania match.

The final action of the week was the golf where third-round leader Aaron Baddeley made me a small profit after Fred Couples tied the lead early in the final round. His religious views are ridiculous unfortunately,
"I'm one to quote scripture a lot, especially when I'm out there. One of my favourites is 2 Timothy 1:8. It says, "For God did not give us a spirit of fear but of power and of love and a sound mind. I'm a Christian, born-again Christian. Grew up in a Christian home. Gave my heart to the time Lord when I was 12. At about age of 19 was when I really started growing in my relationship with Christ, that I understood it was a relationship and not a religion. It's a relationship of being close to Him and growing in the knowledge of the Bible and sort of a changing of the person."
- A sound mind? For crying out loud, use it man! No surprise that he 'grew up' (debatable) in a Christian home though - funny how most people inherit their religion. With views like that, it's true to say Baddeley is "out there", but I agree with him that "God did not give us blah blah blah". He certainly didn't. Anyway, moving on and for the second post in a row, I have no stats on this, but the third round leader by two or less rarely climbs aboard the 1.01 express. Not the greatest of weeks overall though, and the Total Charges could be close to 20%. Even if they're not, the charge will be less than usual.


David said...

The example is good but it presents PC as an advantage which could be a bit confusing! Without the 'value coin-tossing game', the PC-payer would be charged £100 at the end of the week, whereas the non PC-payer would not. So with PC you are forced to find these small value bets each week just to avoid losing money, and then as soon as your charges reach 20%, the 'advantage' is lost.

Mets said...

Thanks for the example - still clear as mud though. I must be an even slower learner!