Monday, 26 March 2012

Recharging

Another good read over at Centre Court Trading's blog:

I often hear about traders taking a break for a few weeks after a bad spell. As far as I'm concerned, that's just running away from the problem. These traders mistakenly believe that when they return, they will magically have eradicated whatever the issue was that caused them to have such severe losses in the first place. Whilst a short break can be excellent for re-charging the batteries, settling the mind and rejuvenating confidence, unless you were away actually swotting up about trading, a long break isn't going to fix anything. I know I keep re-iterating this a lot but the only way to improve at trading is to keep working hard - and if that's not helping, then you need to work even harder! Too many people think trading will come easy to them and are not willing to go the extra mile, especially if it means doing anything that might intrude on their social life or seem too much like having a second job. But only by putting the hours in will anyone improve at anything.
Personally, after a bad loss, the last thing that is going to rejuvenate my confidence is taking a short break. I agree that it is often a good idea to take a very short break until the danger of chasing / tilting has passed, but a break of a few weeks makes no sense. I'm much happier taking a break after finishing on a positive note than I am after a bad loss.

For me, a bad loss stays with me until I have a decent win. The win doesn't necessarily need to erase the loss in financial terms, but it's the step to recovery that frees up the mind, and the importance of a free mind when making betting decisions can't be overstated. While a mind still pondering a bad loss is a bad thing, it can be just as dangerous for the mind to be over-confident. Both states of mind will lead to poor decisions, the former most likely leading to closing profitable trades out too early (the thought being "I can't risk another big loss") while the latter can lead to recklessness ("I am untouchable - I can't do a thing wrong - this will turn around").

As The Sultan says, the belief that returning from a break will have somehow magically fixed the problem is unrealistic. It reminds me of the people who believe that a new year or new season or big tournament is going to make a difference to their results. If you keep doing the same thing, you will keep getting the same results. If you keep taking losses, you need to adjust your methods. Keep records so that you can see where your losses occur, and make changes.

Friday, 23 March 2012

Departing Thoughts

Joker Joe gets it, writing

Being off a maths bent, Kelly all the way for me. As you say, never full Kelly unless you can explicitly calculate the probabilities (as in casino games). Using a statistical model optimal kelly fraction is roughly the actual winnings over expected winnings when betting kelly stakes, and probably safest doing a fraction of that. Patience is the key.
Certainly with the XX Draws, fractional (half) Kelly would have been the more lucrative, and less stressful, option compared to the full version.

Starting on 1.Jan.2011 with a £1,000 bank, the full Kelly bets would have seen a high of £3,169.47 followed by a low of £576.96 and a current bank size of £1,079.45. Not too impressive when compared with a level stakes profit of 21.5 points. The chart for 2011-12 season (full-Kelly) is below:
By comparison, the half-Kelly would have seen a high of £1,980.21, a low of £920.76 and a current bank of £1,367.60. The chart for 2011-12 season (half-Kelly) is below:
The highlight though has been the performance of these selections in the Under 2.5 market. Here, assuming a conservative 3% edge, a £1,000 bank at the start of the season would now be sitting at £1,625.85. Losing runs have yet to exceed 4 on these, although I expect that to be broken at some point, but whereas with the draws, the variance is such that we see lengthy hot and cold streaks, (as is to be expected given the average prices), for the Unders, we see a much smoother progression. Here's this season full-Kelly chart:
Level stakes on the Unders would be 17.8 points.

Food for thought. BigAl continues to play the Riddler to my Batman writing [my comments in parentheses]:
Cassini, you write very well and your blog is an interesting read but so many of your posts are full of gross inaccuracies.
[Sentence would have been better if it had ended at 'read'.]
Firstly, the blackjack example was used to show the principle behind your statement being false. i.e. that a system can have many negative value bets but using a correct staking plan can produce a profit.
[Fair enough, but it's akin to discussing the IQ of five year olds, and suddenly saying 'but what about chimpanzees?' - Blackjack, or conditional probabilities, have no place in the sports betting debate.]
The same principle can clearly be applied to sports betting, the difference being that you won't purposely have negative ev bets.
[That is one big difference]
But if you do - and almost everyone will
[there are actually occasions when someone might do this, but for the most part no one purposely places a negative EV bet] -
then a decent staking plan can still produce a profit.
[Only if level stakes returns a profit, assuming independent probabilities of course].
If you honestly think that each individual xx draw bet of yours is value then you're living in a different world.
[If I didn't, I wouldn't place the bets. Sure, some turn out not to be value, but I don't know ahead of time what those poor bets are. You know that 'on average' each qualifier will return a certain percentage, and you go with it.]
Stick all the bets together and maybe you have found enough total value to make it profitable. Your results haven't hit the long run yet - time will tell
[Long run is subjective. Three seasons is a reasonable length of time, and with the markets changing constantly, it could be argued that much beyond three years is of limited use.]
You say "How someone's edge could possibly "always be 3% lower than he thinks" is, again, a statement that defies mathematical principles. If his value is 1%, it is 1%, not -2%! 2 plus 2 always equals 4, even in Blackjack."

Christ, you so don't get it. Read things properly man! "LOWER THAN HE THINKS" What part of that is difficult to understand.
[Mea culpa - misread that line! No need to take the Lord's name in vain though. I'm a very religious man!]
By the way, nobody knows their precise edge in sports betting - FACT.
[Agreed, on any individual game]
I might think a one-off two way sporting event is 50-50 but the price is 11-10. I think I have a 5% edge. The reality is that I will very often have over-estimated my edge. Unless you are betting on shit like roulette you don't know your edge. A professional gambler is really attempting to quantify the unquantifiable given that no two sporting events are the same.

Instead of sticking to your guns in your normal pompous way, you really should occasionally take a step back sometimes and think things through properly. Your logic and reasoning is often way off and your overall understanding of what you talk about is limited to say the least. But fair play, you have a great knack for wrapping up untruths in such a way as to convince the average reader you're correct.
[My logic and reasoning seem to work quite well for me. Pompous? Never heard that before...]

And Part 2 of BigAl's comment was this:
Three questions for you Cassini (I don't expect a reply to the above post).
[Sorry to disappoint]
When you started selling your xx draw picks how big did you think your edge was?
[Previous results / percentages as of that time, were laid out openly in the prospectus]
At this moment in time how big do you think your edge is?
[All time, the strike rate is 32.4%, 2011-12 it is 30%, 2012 is 34.5% - and the average draw price of selections is 2011-12 is 3.58, so the edge is 7.5% or so which matches up well with the ROI seen since recording the prices. Bear in mind too that with the draw price where it is, one or two wins can make a big difference on a day-to-day basis.]
Do you believe you under-estimated your edge, over-estimated your edge, or correctly stated your edge?
[The edge was correct at the time the prospectus was created. Of course it will change from one week to the next, but as shown above, the numbers are holding up fairly well]
Make it 4 actually. How have the picks done since you first advertised your service?
[To level stakes this season, the Draws are up 8.05 points, the Unders 17.8 points and the progress since the start of the season is shown in the below two charts for Draws and Unders respectively. The XX Draws were offered for subscription around September I believe - at mid-September (the 15th) the RTs were 3.95 points and -0.15 points for the Unders, which admittedly were an afterthought, albeit a logical one since the selections are looking for draws. People signed up starting around this time as I recall.

I was thinking this morning about the BTTS bet - how does the Over 2.5 goals bet in these matches work out?

BigAl's questions do remind me of a good point, which is the importance of not getting too comfortable with a system. Reviewing too often is a mistake, it's easy to overreact to a blip, but if there is an area for improvement, then it's important to act when it appears to be more than a blip. For example, after 192 selections, the French matches are performing better than the German matches, but after 15 months, the Bundesliga isn't faring too poorly, and while slightly in the red, it's nothing a couple of wins won't fix. But definitely something to keep an eye on.

And on that note, I leave you all for a couple of weeks. I shall be taking my lap-top so I may brighten your days with a post or two from paradise, although I'm not expecting betting or value or conditional probability to be high on my list. The XX Draw selections will continue without interruption. I don't see any midweek games other than the usual Friday / Monday schedule, but I'll check for any surprise re-arranged fixtures.

Aloha.

Conditional Probability

Referencing my earlier example of Roulette, BigAl suggests that I
“Cross the floor from your roulette table and take a seat at the blackjack table.

How do you think the professionals win? They plug away all day taking hundreds of negative EV bets before pouncing when the deck is favourable with large bets.

"If a system cannot show profits at level stakes over an extended period of time, then no alternate staking plan in the long term can produce a profit."

If they play level stakes all the time, they lose in the long-term. Their alternate staking plan produces a profit.

Any arguments? Presumably you'll attempt to come up with some sort of different interpretation of your statement."
I think the different interpretation comes from BigAl here, since he is quite possibly the only reader to take this discussion away from the world of sports betting, or at least on bets where the probabilities are independent.

This clearly doesn't apply to a game such as Blackjack, where the probability of winning is conditional on the outcome of previous events, a whole new ball game you might say.

Yes, in a game such as Blackjack, the edge can vary, and an expert player will know when there is an edge in his favour. If you play to level stakes you will lose at Blackjack, but if you are fortunate enough to be able to find a venue that will let you vary your stakes, and not decline your business, there are times when you can have a positive edge, and know that you have an edge. The edge is dependent on previous events, but this line of thought has nothing to do with sports betting.

With sports, the edge on each bet is independent.

Tony commented:
a) "someone with an edge misjudging the size of their edge" - if they have an edge, Cassini has already said that to level stakes they sbould be in profit, so a system that is in profit to level stakes is correct from what I can see? Just because the person with the edge misjudges that they can make profit to level stakes by playing a system of some kind of "revolutionary" staking system is not Cassini's fault.

b) Why use a staking plan if your edge is profitable to level stakes?

c) The fact the edge or perceived edge will vary depending on the odds available.

Available prices determine the edge, so if the prices are not there, the edge is not there, so the bet is therefore not there.

To summarise I think you are picking arguments with Cassini for the sake of arguing.

On to your second statment regarding blackjack. Blackjack is a game of skill, not chance, so i personally dont see how an edge is sports betting is comparable? Predicting the outcome of a set deck of cards based on what cards you have previosly seen dealt is different to predicting the winner/loser of a particular sporting event based on the previous number of minutes/plays viewed in the game? E.g., the dealer rarely fumbles a King making the play void after 10 consecutive low cards compared to a quarterback throwing an interception for a returned touchdown after an 11 play 90 yard drive.
BigAl picking an argument for the sake of it? Who ever heard of such a thing!

Of course comparing Blackjack to sports betting is false. Confusing the debate on sports betting (independent) with a game featuring conditional probabilities (e.g. Blackjack) might give me a post to write about, but it's of academic interest only to most readers.

Regarding Tony's mention of using a staking plan once you are confident that you have an edge, use of Kelly has been mathematically proven to maximise the growth of your bank over time, although a fractional version is more practical.

BigAl is misleading when he suggests:
That said, almost every successful sports bettor will misjudge their edge. Basically this is because there is almost always someone who knows more, or is simply superior at estimating prices every time you have a bet (not the same person every time of course).

So, to make it simple, let's assume his edge is always 3% lower than he thinks.

His bets at what he perceives to be 1% value are actually -2%. His bets at 5% are actually +2% etc. etc.
With historical data, it is a simple process mathematically to calculate your edge. How someone's edge could possibly "always be 3% lower than he thinks" is, again, a statement that defies mathematical principles. If his value is 1%, it is 1%, not -2%! 2 plus 2 always equals 4, even in Blackjack.

Example, the XX Draws hit at 33% over three years plus. I need a price above 3.0 to have an edge. Not all matches are the same of course, and the beauty of sports is that two teams can play each other on consecutive days and the result may well be different, but if I know that 'on average' the probability of a game resulting in a draw is 0.33, (3.0), then if I can back above this price, then all things being equal, I have value. I work with the knowledge that pre-game, there are lots of people who know more than me, and if the weight of all that money from gamblers in the know pushes the price below my value threshold, then there is no bet. Knowing when not to bet is as important as knowing when to bet.

As for the statement that
Basically this is because there is almost always someone who knows more, or is simply superior at estimating prices every time you have a bet (not the same person every time of course)
this statement should probably be qualified to specify pre-game on the more popular sports, but if you specialise on in-play trading on some of the less popular sports, you can learn to estimate the 'true' price as well as anyone else out there.

Thursday, 22 March 2012

A Thousand Words

Marky stopped by, as he always does on my anniversary, to post a comment on the subject of P&L blogs - why he never drops off a gift while he's here, I don't know. He wrote:

I agree that P&L blogs can be tedious but I think a readership often like to have an idea of what the author is aiming for from the blog.

I had a comment on mine today alluding to this and it reminded me of what people liked to read when I started. They wanted to follow my journey and it's hard for them to do that if there's no roadmap.
I probably should have made it a little clearer that I have nothing against blogs that INCLUDE some P&L, it's the blogs that are comprised solely of this that bore me to tears. For example:
Next month I am aiming for 20% profit. I`ve had a great start this month (September) 16% so far. Using only my own system.
For me, some kind of reasoning about how this 20% profit next month is going to be achieved would be interesting. One of the better blogs out there, the Football Trader's Path, touches on this subject with this post, but while SoccerDude's blog does include his P&L, it is by no means what I would call, or what I mean by, a P&L blog. Do the P&L postscripts add anything to the blog? Not in my opinion - in fact, I don't even look at the numbers, but the text preceding it is usually worth a read, and the numbers are quite innocuous.

The big problem with actual numbers is that they are meaningful only to the writer, not to the readers. we are not all equal. Some of us are hobbyists, some of us are full-timers, some of us are young, some of us are old, and £10 means more to some than to others, so if you post up a profit, or a loss, of £10, some readers swoon, others roll their eyes, and others don't even notice.
Is the above more interesting than "Detroit may have lost their game at Denver last night, but in decent form this month and getting 8.5, a price of 1.95 represented value against a team who recently lost at home to Cleveland (on a par with Detroit) and were blown out last time out at home to Dallas"?

Wednesday, 21 March 2012

Happy Birthday To Me

This blog has now been running for four years, with a total of 1,274 posts before today. Not all have been hugely interesting admittedly, but the other 1,272 have been...

If you think you've read that before, you are close - I edited the third anniversary post. Blog post number one was written on the first day of Spring 2008. Will the blog make it to five years? Possibly, if the (sensible) comments keep coming, and I can somehow find inspiration, and readers keep hitting. A year ago, I was looking forward to 250,000 hits. Today the count is 50% over that, 375,000 and counting. Next stop, half a million? Why not?

The blog continues to steer clear of P&Ls, which really don't make for an interesting read, and it will continue to seek out ideas from the news, forums, or other blogs. Speaking of which, if you are going to blog, and comment on other blogs, have the decency to be honest and not treat the reader as an idiot.

Average Guy wrote:
Damn right you are doing something right, best blog out there in my really important opinion. I'm just amazed that someone as knowledgeable as you appear to be, pays so much heed to the young and the restless.
Well, here I go again, because again Mr. 500, whose hit count must be through the roof after the recent publicity, is not being honest on his blog, and worse, suggesting that Cassini, middle name 'integrity', is not being honest.

The latest post, screenshot below, suggests I have invented 500's claim of being in profit for 2012. "Where exactly did you read that?" he asks.
Well, where did I read it. Hmmm. I know - here, a comment on my blog written just a few days ago, on Sunday, March 18th, 2012 to be precise:
I'm hoping my case is now rested permanently on this topic. It's getting a little old, but hopefully the blog will stay young and fresh for a while longer yet.

Like Cassini himself in fact.

Tuesday, 20 March 2012

Wall Street Rigged

For a long time now, I have pointed out that the sports investing markets are much fairer and open to the majority of us than the financial markets. I’m excluding sports involving animals with four legs, and individual sports can be dodgy with players retiring, but when it comes to team sports in competitive leagues playing matches that are important to both teams, you can have a high level of confidence that the game is being played honestly. Sure, those close to teams with knowledge of injuries or line-ups have an edge, and this can be huge in a sport such as basketball where the absence of a star player will make a huge difference to the price, but if you bet pre-game, this is a risk you take, and it can work in your favour as well as against.

But I digress. Here is a story from the Yahoo! Finance pages that highlights how the game is rigged in favour of insiders.
The U.S. Labor Department's monthly employment report is one of the most-anticipated market-moving data points watched by investors and traders on Wall Street.

But ahead of Friday's February jobs data, CNBC reports that the Labor Department and other government agencies are concerned some traders are illegally accessing data ahead of its official release while others are jamming agencies' websites to give only a handful of people access to information, slowing it down for everyone else.

In an effort to prevent potential future data breaches, the Labor Department has asked the company responsible for securing the nation's nuclear stockpile to analyze its security protocols. The U.S. Energy Information Administration is also targeting and blocking certain computer IP addresses that seem to show "malicious intent," according to CNBC reporting.

Jane Callen, a spokeswoman in the Office of Economic Affairs at the Department of Commerce, told CNBC the cat-and-mouse game has been around for a long time. "And at each turn, the government is going to make sure they're doing their best to ensure the right protections are in place," she says

News of this brings us here at The Daily Ticker to ask again the age-old question: Are financial markets rigged against the individual investor?

"Absolutely," says Lance Roberts, CEO of Streettalk Advisors. "If you're trying to look at the economic data that is coming out and you're hitting refresh on your Internet browser you are so far behind Wall Street you'll never catch up."

But the information lag time is not the only problem facing individual investors.

High frequency trading also puts the little guy at a disadvantage. Traders who profit from this type of investing use powerful computers to react to market movements and patterns before any human possibly could. Along these same lines, major investing firms have moved their trading systems as close as possible to Wall Street to shave nanoseconds off the transaction time.

"The average investor really is at a disadvantage these days," says Roberts.

Then there's insider trading by members of Congress. Even our very own elected officials are using inside government information to profit at the expense of everyone else. The public outcry to ban this behavior, which has been going on for years, finally came to light after a CBS "60 Minutes" report last fall. Since then, a bill to prevent congressional insider trading has moved quickly through both the House and Senate, but likely still does not go far enough to make any real difference.

"The average American is starting to kind of be fed up with the way things are, the status quo," says Roberts. "The best that the average investor can do is play along with the game."

By that, he means old strategies like buy and hold, do not necessary hold up in today's market.

"Understand that buying something and trying to hold it for three years or four years or five years and getting long-term capital appreciation might work for you, but it probably won't because everybody else on Wall Street is trading all around you," he says. For example, while fundamentals of a company may look good, there may be a breaking news event that tanks a stock. Take Netflix.

"Fundamentals still work and fundamentals determine what you buy, but you need to add a technical analysis to your [portfolio] management," he says. "Timing and trends are going to be much more important in the short-term. The goal here is that long-term we can make money, but we have to avoid those short-term declines."
I’m not sure I agree with the suggestion that “old strategies like buy and hold, do not necessary hold up in today's market” – it seems to me that these are exactly the strategies that outsiders like myself should be employing. As outsiders, not playing the rigged game means not trying to time our entries and exits, and forgetting about looking for short-term gains. The stock exchange doesn't have a delay built in to protect those with delayed data. By investing for the long-term in index tracking funds, and holding the positions, we can at least expect to match the markets, and historically, you can do a lot worse with your money than that.

Meanwhile, as predicted, no details yet from BigAl on his ground-breaking mathematical proof that the statement “if you can’t show a profit to level stakes you don’t have an edge” is false, as he asserted. Reminiscent of the supposed ‘Holy Grail’ claim from Slicer, which had people coming together in work groups and wasting countless hours searching for the non-existent, this claim from BigAl is similarly deceptive. I’m not sure whether the claim is meant to convince others or himself, but either way, it is wrong. A simple example to clarify things - if you play Roulette on a single-zero wheel where the payout on an individual number is 37-1 you have an edge, and will show a profit long-term to level stakes. If the payout is the industry standard 35-1, you don’t have an edge, at least not a positive one, and you will show a loss long-term to level stakes. There are web sites that allow you to see this in practice for yourself.

And finally, Average Guy, who recently acknowledged
"I am one of theses bloggers, and sadly I am well aware how correct Cassini is"
and
"Whoops, Cassini was right, selective memory, Over €95 loss, and it was 3:00 am, mea culpa"
wrote:
Regarding 500-5000, don't pick on those less fortunate than you, after all the likes of him are probably paying for your little vacation. What really surprises me is the fact that his comments provoke you so much, are you a sensitive man ?
I think my track record of almost four years on here answers that last question. As for his comments being provocative, I have no control over what others write, and how they try to provoke me - all I can do is control my response to the provocation, and I do that, not in a negative way, but in a controlled, considered, respectful and polite way. Usually. Many comments do provide something to write about, and as regular readers know, comments are a rich source for many of my posts. In this specific instance, Mr. 500's post was misleading, and I wrote a generic post on the topic of how gamblers have a tendency to be selective in their recall of facts, using that post as an example. I clearly stated that my post was not intended to pick on Mr. 500 - he was merely the catalyst for the day's post. That would normally be the end of it, but when he then followed up by stating falsely that he was in profit for 2012, I quite politely pointed out to him using his own words from his own blog, that this wasn't exactly true, and at the same time, the fact that his loud protests confirmed my initial point was just a bonus.

You might also note that I completely ignored the rather rude part of his comment, (he's young, so a little immaturity is to be expected), and his blog is still present on the blog roll. Sensitive, I am not.

As for 500, how he reacts to my comments is up to him. I call it as I see it, and if he wants to take the advice on board and improve his trading and betting, he can. If he wants to blame the messenger, and carry on losing, that's fine too, it's a free world. He is not 'less fortunate' than me - he is a lot younger though, and has much to learn. Whether or not he chooses to take advice is completely up to him.

This blog is sometimes controversial, it has been referred to as the Marmite blog, but I hope it is seldom boring. The hit count continues to exceed 500 on days when there is a fresh post, so I must be doing something right.

Monday, 19 March 2012

Creative Accounting

After a weekend of football overshadowed by the events surrounding Fabrice Muamba, it feels a little dirty to look at our insignificant wins and losses, but life goes on and the Tipster Table as of tonight is shown above.

The XX Draws / Unders showed a small loss on the weekend - the draws were actually in profit after fluking a 2-2 draw courtesy of a 90' goal from Paris St Germain at Caen. While the losing draw pick at Nancy did at least finish 1-0 for a consolation win on the Unders, the third and final selection of the weekend wasn't ever close, with Juventus running out easy 5-0 winners at Fiorentina.

Football Elite's run of form continued, (12 winners and 6 losers in the last 18 picks), picking up a small profit on the weekend with a win for Augsburg (DNB) v Mainz '05 at 2.2, but a loser today with Bologna unable to beat Chievo.

Geoff's Draws took a miniscule loss, but dropped to fifth, and Peter Nordsted's Drawmaster had one selection (Wigan Athletic v West Bromwich Albion) yesterday which won. He has two more selections from the midweek schedule - Everton v Arsenal and QPR v Liverpool.

The Green Pullover is on a losing run of ten, and just one winner in the last sixteen. No selections from Mark J again, nor from Griff, probably due to the trimmed EPL schedule.

The fallout from my post illustrating how easy it is for punters to take a distorted view of their results continues. 500 to 5000 continues to protest too much, methinks, and he would be better served to look within himself rather than scream at me.

Pierre misses the small, but important, detail that we were talking about the 2012 results here. He writes:
well you can be in profit with losses in january and february. for instance mr500 may have lost 1 in january, 1 in february and actually making 3 in profit. The laws of mathematics are pretty clear about this.
Indeed, and just to clarify, if you lose in January, lose in February and are losing in March, (as 500 has written in his blog), you are not in profit for 2012. Fact.

If you want to look further back in time, then read the blog in question, and you will see that the likelihood of Mr. 500 being in profit since day one is pretty low. In February he wrote:
I am not going to be a complete fool and start off with a massive bank. I have made mistakes with a big bank before and so this time round (learning from my mistakes) I am going to give myself the princely sum of 100 pounds to begin with.
It's up to readers to make their own minds up on this, but to me it's a classic example of how someone paints a more flattering picture of their results than is actually warranted, and the absence of any updates to the P&L on the blog since May 2011 speaks volumes.

Al (little) gets the point, saying:
i don't understand the hostility towards Cass on the comments.

he is educating those new to gambling and may save them time and cash when they think they might have stumbled upon the holy grail (betfair).

symptoms of people with problems include hiding those losses from people around them and themselves.
Al (big), not for the first time, misses the point, writing:
Don't let that get in the way of a chance for the author to try and make someone feel small.

Just one of many completely inaccurate statements from Cassini. The most regular of which is "if you can't show a profit to level stakes you don't have an edge."
Interestingly, that last assertion is backed up with no evidence at all - and for good reason. It is not inaccurate on any level.

A system that profits long-term to level stakes has an edge. A system that loses to level stakes, doesn't.

This is understood by most gamblers, although the O'Dywer school of thought suggests that an edge is derived from bank size rather than from getting better odds on a selection than the true probability. Unfortunately, the O'Dwyer philosophy has been discredited in all academic circles, with only David Icke and his Babylonian Brotherhood continuing as adherents.
It would be most interesting to read Big Al's revolutionary theory on how you can show a level stakes profit without an edge, or a level stakes loss with an edge, but I fear we shall all be disappointed, and have to continue with the boring facts.

Depending on his age, Big Al's paper on this could put him in line for the 2014 Fields Medal! Perhaps this blog will be graced with a preview. Start checking flight prices to Seoul now. Meanwhile, a quick search of the Internet shows no end of support for the tried, tested and proven conventional wisdom:
Finally, once again the Cassini clan will be taking a break, and a well-deserved one at that if I do say so myself. My kids and Mrs. C will be accompanying me on a trip to Hawaii, Maui to be precise, and service will be much reduced for a couple of weeks starting this Saturday. The XX Draws for the weekend will be sent out ahead of departure, and I shall take the laptop with me and give up paradise time to keep my subscribers happy. The sacrifices I make for you all.

Sunday, 18 March 2012

Selective Recall

My recent "Profits Turn Negative" post included the disclaimer in the opening paragraph that "This isn't meant to pick on Mr 500". Apparently the author missed that line. As Al correctly noted:
500- Cass is providing valuable insight for his readership. I'm sure it is not personal.
The post was to highlight the rose-tinted view that many people have of their own activities. It's human nature. Losses are swept under the carpet, or dismissed as bad luck, while winnings are talked up as if they are the result of skill and the next Holy Grail, and there is definitely the tendency for people to recall winners more than losses. Here's a perfect example - included in his comment on the afore-mentioned post, Mr. 500 wrote:
Yes, I am still in profit since the start of 2012.
yet on March 13th this year, he wrote on his blog:
All I need to do now is not mess it up until the 31st and I'll have my first month of profit for a while.
Now if someone has not had a profitable month "for a while", how can 2012, less than three months into it, possibly be in profit? The laws of mathematics are pretty clear about this.

In the same post, he wrote:
I'm probably still spending too much time on betfair really, and my next aim is to try and cut that down
so why he is upset at me for agreeing with him that at this stage in his life, this might be a good plan, I'm not sure.

Interestingly, he has not requested the removal of his blog from my blog roll.

A case of shooting the messenger?

Lunch Time, Exit Trade

From the FTS Income web site comes this post titled Alli's Lay The Draw, which includes a link to a spreadsheet containing the results for 2012. After 114 matches, the result of laying every game and letting them run amounts to a loss of £637.50. However, when the operator applies subjective decisions to the process, e.g. sometimes letting the bet run after a goal, other times trading out, the result is a profit of £825.39. Incidentally, some of these decisions don't seem to be based on any logic, for example this comment (grammar error not mine):

Even though he felt, Maritimo would go on to win, he was happy to close this trade at HT, knowing that he would close up for the day
Making decisions based on how the match falls within the day is clearly very poor trading, but the thing about all this that struck me the most is that you could have made a nice profit simply backing the draw in these matches pre-game. Now this may not be quite as profitable as watching these games, and actively exiting positions, (or not, depending on the time of the day apparently) but the question is whether the extra time needed to monitor these games makes this worthwhile. A big advantage of punts is that you place your bets, and your time is your own, but for trading, let's say that of those 114 matches, you are only active for half of the game, that is still 43 hours of your life, and to my mind, for very little added benefit.

I'm not sure what the source of these matches is, but if they are e-mailed out to a number of people all ready to apply their versions of the Lay The Draw strategy, that may well explain why the prices make them value backs.

Finally, a quick mention of Fabrice Muamba who, by all accounts, appears to be a genuinely decent person, something of a rarity in the world of Premier League footballers. While the #PrayForMuamba thing on Twitter is frankly embarrassing, annoying and pointless, and I don't want this blog to go all sappy, it's hard to read stories about him, and the opinions of people who know him and stay totally detached. Here's wishing him a full recovery.

Saturday, 17 March 2012

Profits Turn Negative

The title of the latest post over at the 500 to 5000 blog sums up for me the nature of some gamblers who see their betting in a less than realistic way. This isn't meant to pick on Mr 500, but it does illustrate the, shall we say 'favourable'?, way in which many people see their betting activities.

The post title read:
Profits are down...slightly....a short break needed.
a statement that implies to me that while profits continue to be made, they are at a reduced level from earlier periods. For example in January you make profits of £500, in February profits of £250. You can legitimately describe this state of affairs as "profits are down", but for 500 to 5000, the details turn out to be a little different. Admittedly, he is not producing a financial report for a publicly traded compmpany, but when he writes:
Due to a few mistakes on my part, namely straying from rules I'm meant to follow religously, I am down slightly for the month. I got involved in the 'To Qualify' markets and made some silly mistakes in them. My confidence with the trading has taken a bit of a knock, so I m going to give it a break for 10 days or so. I'm gearing up to continue my studies in the next month or so, so it'll give me time to prepare for that.
I think that is a little misleading, and perhaps shows how the mind of a gambler somehow distorts reality. There is a reason why P&L is so named, rather than P&P - Ls do happen. For 500, there are no profits this month, there are losses. It happens to all of us, strike that, it happens to MOST of us - Mark Iverson has managed to avoid the dreaded losing month since he pulled on his first pair of long trousers many years ago - but it's important to accept the fact that you have losses. Now, quite possibly, 500 to 5000 is referring to the fact that he is still in profit for say 2012, but just not by as much as he was at the end of February, but if this is the case, I wouldn't imagine that a 10 day break would be needed. A break of this length due to being 'down slightly' makes no sense. I'm doing a lot of reading between the lines here, but that's how I see things here.

I might also offer the advice that completing his studies might be a better area to focus on for the next few months anyway. Never mind the next 10 days. It's hard enough to concentrate on investing at the best of times, let alone when you have other things going on in your life such as upcoming exams. Life is about priorities. Betting has been around for many years, and will be available for many years to come. The window of opportunity for acquiring life-changing qualifications is narrow.

Magic Minutes

Cloppa asked:
What is your view on putting a bet in on a football match after 20 mins, i.e. laying U1.5 after 20 mins. Surely if you have identified value pre KO then the bet should be placed pre KO?
Yes, that is indeed my opinion on this. Any system that suggests that a specific minute has a magical property about it, is just propagating nonsense. If the price wasn't value before kick-off, why would it be value after 20 minutes, 35 minutes, 62 minutes or any minutes?

In the absence of any game-altering events (a sending off, perhaps injury to a star player), prices on all the markets move very predictably from that kick-off starting price. They do not suddenly deviate at 20 minutes offering momentary value. And if there HAS been a game-changing event, or even perhaps the game is being played in a style which either makes the probability of goals less or more likely than the pre-game prices suggested, it's always worth considering that it is highly unlikely that your reading of the game is more accurate than that of possibly many thousand other people also watching the game. The bigger the game, the less likely you are to find in-play value.

There is something of a dichotomy here - the bigger the game, the more liquidity, but the less likely that any one person has an in-play edge - the lower profile the game, the more chance that you have an in-play edge, but the lower liquidity limits your opportunity to take advantage of the edge.

I believe a popular method of applying the 'Lay The Draw' strategy calls for a loss to be taken if the game is still drawn at 70 minutes. I doubt very much if this makes any more sense than exiting after any other specified number of minutes. The last 15 minutes of a game see more goals than any other 15 minute period of a game for one thing, but again, why should backing the draw be value at 70 minutes if laying the draw was value at zero minutes? If the draw price was a value lay pre-game, then it is more likely to remain a value lay at 70 minutes, so the correct decision would be to let the bet run.

If you feel the need to take a red at this stage, then perhaps you should consider staking a little less, and letting the bet run?

Friday, 16 March 2012

Comparing Apples

Mark Iverson wrote a couple of days ago:
Yikes! I've mentioned recently that I haven't had a losing month for 5 and a half years but after a few things going against me recently, I'm in danger of losing this record. It's a bit of a long story but the shortened version is that I've dabbled with the stock markets along the way for small amounts and always included any profits or losses in my monthly figures. Until recently the amounts involved have been insignificant (less than 1% of my bank) but unluckily for me a few of my shares have taken a big hit this month. Add to this a couple of decent size losses on the cricket and a couple of premium charges to boot and I'm now staring at the biggest monthly deficit I've ever faced. To get back to level for the month will be a big task.
I'm not sure I agree with the philosophy of including stock market investments along with sports trades. Don't get me wrong, I track my share and index fund prices on a daily basis - 'obsessive' was the word used just yesterday by Mrs. Cassini to describe this activity - and while they comprise part of my net worth spreadsheet totals, they are certainly completely different in nature from 'betting' trades, unless of course one is day-trading, but since I have strongly suggested that day-trading is not a good idea for most of us (outsider trading is not a long-term winning strategy), I doubt that Mark is engaged in this activity (although exactly what 'dabbled with stock markets means, I'm not sure). The bottom line for me is that my net-worth spreadsheet includes everything, of which betting is just a small piece, while my betting spreadsheet cover my betting - punts and trades, all broken down by sport, as well as arbs and the Premium Charge. This makes it an honest reflection of my betting history. To my mind, if the stock market is up 10% in a month, and you include those numbers as 'betting profit', you are at risk of fooling yourself into thinking your betting is profitable when it is not (and vice-versa). In my opinion, Mark, would be better served by keeping track of the two separately.

So why track long-term share investments in the same way as short term betting trades? We have no control over the former - yes, we could keep selling and buying, but that makes no sense when you factor in the transaction costs. Losses or gains in the financial markets are essentially beyond our control. I'm invested in shares, and add to them every month, knowing that in ten years time, I have a high probability of coming out ahead. In ten years - not at the end of this week or month. It's all very different to calculating the probability that Chelsea will beat Napoli or that with two minutes left in a close game, the price on the Dallas Mavericks or Green Bay Packers is too short.

Gains or losses on the stock market are only paper losses until you close the position. Gains or losses from betting are not, at least once the market is settled. And while an up day in the stock market (such as today) is generally welcome news, because it is out of my control it means far less to me than a decent win on the exchanges that might be a fraction of the gain from shares. Similarly with losses. When the stock market has a bad day, and it has its very bad days, it doesn't have nearly the same effect as a much smaller loss from betting will have. One gain or loss is something I own, the other is just something going on in the background. To my mind, merging the two makes as much sense as including the equity in your home, or the value of your antique car collection, art collection, private jet or luxury yacht. Not that have I have any of that list, although the car is getting on a bit, and misfiring on the number three cylinder so I was told yesterday. I was told a lot of things yesterday, now I think about it.

Having opened this post with examples of the worst days in London Stock market history, I'll now end on a high note with the list of its better days:

Thursday, 15 March 2012

Second Legs

Two posts (links below) today on other blogs on the subject of football's 'To Qualify' market, something that has come to the fore in recent days after Arsenal's strong comeback from a 0-4 first leg deficit, and Chelsea's perhaps less impressive, but successful, comeback from 1-3 down versus Napoli.

One of the negatives, or positives - depending on how you look at it, is that in a 90 minute football game, not too much changes from the perspective of player personnel or tactics. With the number of substitutes limited, there is only so much a team can change if things don't go according to plan, and once changes have been made, they are permanent. The manager has one official opportunity, at half-time, to rally the troops, and at the end of the game, there may well not be a winner.

Contrast this with the NFL, NHL or basketball, where players switch in and out constantly, coaches have several time-outs at their disposal, can configure their teams depending on the opposition's line-up and, at the end of the game, there is one winner.

In other words, there are fewer variables in a football match than there are in other sports, and one reason why in my opinion trading the non-football sports is a purer form of trading, than trading football, where as I have written before, the markets move in a predictable way and if you haven't identified value before the game, you will be unlikely to find it during the game.

Other sports offer the trader far more opportunities. Time-outs in the NBA for example, are a key part of the game, serving to stop the opponents momentum not only by stopping the game, but also my the coach making changes to the five on the floor, as well as to make changes to the game strategy, or late in games, to advance the ball and draw up the next play. This is not something you get in football. When a team trails by one, and has a late free-kick just outside the area, there's not too much the manager can do.

But back to football, and the "To Qualify" markets effectively offer a one winner market, for a football game over at least three hours - sometimes more, and sometimes with a penalty shoot-out. With half-time often lasting two weeks, and the opportunity for managers to make wholesale changes to their teams depending on the state of the tie, time to study what worked, and what didn't in the first game, and with a change of venue, this is, for me, a much preferable trading environment than the 90 minute league game. There will be more goals over 180 (210) minutes, and the lack of goals is one main reason why 'trading' football is so predictable, and thus that much harder for anyone to find an edge - well, that and the fact that a million plus people think they know the game better than the other 999,999 trading the market!

Check out the two posts at Sports Trading Life and Lay Away For A Profitable Day for more thoughts on these markets.

(Just found a third post on these markets: 500 to 5000).

As a football fan, it's perhaps hard to understand why some people, notably Americans, aren't necessarily enthralled by it, and I found an article on why "Soccer Sucks" that some of you might find interesting.

City Promoted

I am going to have to close the quiz from this post in October 2008, as no one got the answer right, (the prize was a cruise on the Costa Concordia, so it'll be a rollover), and after yesterday's Jubilee Announcement, there is no longer an answer. So Chelmsford is now a city, which many probably thought was already the case given that the (former) town's football team has been called Chelmsford City since 1938. Have these tons no shame? I'm still unhappy with Elgin and Brechin nearly four years on. It appears that someone is also unhappy with Chelmsford's rise in status, as the Wikipedia entry included the following line:

Very immature.

Marky 'Sparky' Iverson twittered yesterday that he had
"Just done some analysis and realised that I rarely have a single win worth over 3% of my betting bank - is that poor for traders?"
As I have written before, and nothing has changed, I have never requested the default liability of £5,000 in my Betfair account to be raised, even though I typically keep a lot more than that in my account. Why, you may ask. Well, I won't ever deposit into the account again, so if the account should ever go to zero, that would be it, so I guess I am just giving myself a few safety cushions, which in all likelihood will never be needed. If my account drops into four figures again, that would set off any alarm bells that weren't already clanging, and some serious decisions would need to be made.

Which is all a long-winded way of explaining why I consider my betting bank to be £5,000, 3% of which is by my calculations, £150. Looking only at 2012, the percentage of markets where I have won and exceeded this amount is approximately 10%, but as this includes my punt figures, as a percentage of trade-only markets, it is probably closer to 20%. Mark uses the word 'rarely' to describe the frequency of his 3% wins, and even though 'rarely' is a relative term, I doubt that many people would consider 1 in 5 a rare event.

No doubt, Mark will be letting us know just exactly how rare his 3% wins are.

Update from Mark: "By rarely I was thinking more like under 5%, but I do take all funds at my disposal into account when determining the size of my bank (not just what I have in Betfair)."

Monday, 12 March 2012

EPL Final Lap

I have a small interest on Manchester United winning the Premier League, more of an accident than the result of any serious planning (the market doesn't Suspend when there's a goal, and I happened to be looking at it when a goal of some significance was scored a few weeks back). Looking at the price on United today, I see they are at 1.66 / 1.67 which at first sight seemed too short. Surely there's a twist in the road ahead, he thought, but looking at United's remaining fixtures, I'm not so sure there is. They do face an away trip to City at the end of April, but aside from that the highest placed team they face is Sunderland. City play hosts to Chelsea and visit Arsenal. If they can come out of those games on top and hang in there with United, that derby game will be nicely set up, but that's a big IF.

Arsenal v Newcastle United this evening, and there is little value. I have the Over 2.5 goals priced at 1.53, with 1.64 available, while Arsenal are priced at 1.49 versus my 1.36 calculation. Arsenal -1 at 1.78 on the Asian Handicap looks like being my play here. The Elo based ratings suggest they should win by 1.4.

Super Slots

While I am not a big fan of the Betfair Forum, aka Community, I do occasionally wander over there during a quiet moment to see if I can find anything worth reading, but more often than not I leave having been unable to do so. Take away the pointless threads about 1.01s being turned over, (as if that doesn't happen approximately 1 in every 70 or so markets, and is hardly news), futile challenges, threads about the Premium Charge, lies about having found Holy Grails, occasional rampers and of course after-timing threads, and there isn't much left. As Greg Wood wrote in the Guardian in October 2008:
Like any community, of course, it has its share of members with personality disorders: the bullies, the fantasists and barefaced liars, and the ones with such deep-seated anger-management issues that they should probably be under lock and key.
Some people are so prolific on there that one wonders how they find the time to place all these bets they reportedly make. So if Betfair decided to discontinue the Forum, I wouldn't miss it - the problem with the idea of a 'Community' is that betting is an individual activity, and no one sharp enough to develop a long-term edge is going to be simultaneously stupid enough to reveal, and thus remove, their advantage. Dr J's inspirational post was a rare exception to the rule that there is nothing worth reading there - of course there occasionally there is, but not often. Anyway, the 'Community' tab disappeared a couple of days ago, replaced with, as you can see from the image below, one for "Super Slots".
Of course, I rushed over there to join in the fun... Well, not exactly. In Betfair's own words
This change is a trial which we have implemented ahead of the upcoming Cheltenham Festival as it allows us to use the tab to promote other key content on Betfair.com.
Key content? Since when has the key content for the exchange been 'Super Slots'? The sharp minds they were encouraging to join a few years ago are now playing slots? And quite what the upcoming Cheltenham Festival has to do with Super Slots I'm not quite sure.

Anyway, of ten tabs, we have four which are, quite reasonably, Sports, In-Play, Football and Horse Racing. The other six, rather sadly, are dedicated to Casino, Live Casino, Poker, Exchange Games, Arcade and Super Slots. I'm not sure this is what Betfair's founding fathers envisioned when they came up with their revolutionary idea.

How about replacing these with Tennis, Golf, Cricket and Basketball, with the other two available for special events or seasonal sports - tabs that lead a user to markets where his sharp mind might actually help him to win money rather than throw it away? Just a thought. It can't be that Betfair want to attract blunter minds these days, can it?

Sunday, 11 March 2012

A Fine Line

A frustrating opening selection for the XX Draw selections today, with a 90+1' goal taking away winners on both the draw (which traded as low as 1.03) and the Unders. It seems like this happens a lot, but in fact this is only the second 90' goal of 2012, and the fifth of the season from 117 games. The second selection finished 1-0 to Novara, a win for the Under, but a loss of 2.2 points on the weekend. No point crying over spilt milk, but it's a fine line between a decent win and an indecent loss!

Opposing Ian Erskine has meant a good weekend as his Lay The Draw selections included two perfect 0-0s (Stuttgart v Kaiserslautern and Borussia Moenchengladbach v Freiburg) and a 2-2 draw between Valencia and Mallorca, a set of results that sees these selections move to within a whisker of the top of the Friendly Tipster Table. What followers of the Lay The Draw thought of two 0-0 results on consecutive days, one can only imagine. It would be interesting to know whether backing the Overs on these selections is profitable, as logic suggests should be the case. If anyone has this data, it would be interesting to see.

Football Elite is in fine form right now, with six winners from the last eight selections since last weekend, and moves up to third with an ROI now back in double figures.

Geoff's Draws slip from second to fifth after finding no winners from eight selections this weekend, but still in profit overall. You may recall that just a week ago, he had five winners from eight.

Peter Nordsted's Drawmaster was another victim of a 90' goal, as Aston Villa left it late to beat Fulham, and these selections drop into the red just below Mark J's selections, for which there were none this week.

There was one Value Under tweeted on Friday, Chievo Verona v Internazionale, which was a winner at 0-2, although both goals came late to make it a slightly tense finish.

The full table is shown here (commission not included):

There were a couple of comments on my last post questioning what was meant by "being 75% certain of an even money shot". Webbo wrote that
The shorter the odds the less likely the selection is to have value long term. It's so much easier to price up clear favourites and you will make more money backing the even money shot but the 1/5 shot will have less variance.

I did some calculations recently and the price that shows the most value based on odds alone in English football are selections around the 1.9 mark.

I guess it all depends on your style of betting and stakes etc. If I was a big stakes player like this John Wilson geezer I would prefer to go for the 1/5 shots. The ROI would be less but so would the variance and betting at such huge amounts you only need a very small edge to make a lot of money.
I remember Matt from Football Elite gracing the comments on this blog a couple of years ago on this subject, saying how hard he found it to find value bets at odds-on. Big Al concurs, writing:
Would have thought it's pretty obvious to anyone what he's trying to get at to be honest. More fun to mock though I suppose.

Anyway, and there are different ways of looking at this, I don't often think there's much value in, say, 1.0x shots. As someone who looks for 5% value minimum on any bet, simple maths dictates it's not easy to find sufficient value for me at those prices. Perhaps other people work out value differently though.
From the two comments, I am guessing that the understanding is that the original blogger was comparing a selection available at even money (2.0) where the calculated probability is 75% (1.33) with a selection available at 1/5 (1.2) where the calculated probability is 99% (1.01) and questioning which bet offered the better value. If this is the case, then indeed, as the comments from BigAl and Webbo imply, the better value bet is the 75% shot available at evens - by some distance. What the "conundrum" is, I'm not sure - it's mathematics.

1/5 Banker - 99% Certainty - Eh?

I read some strange stuff on blogs from time to time, and came across one recent post titled Can A Value Bet Ever Be Too Short A Price? which contains the following ramblings:
I often find myself facing this sort of conundrum, where I strongly fancy something, but short odds put me off. But if it is a so called banker (I am aware nothing is certain), then surely it’s worth doing, is it not?

Is a 1/5 banker I’m 99% certain off, a worse bet or worse value than an even money shot that I’m about 75% certain off, but carries more risk?

This is the kind of situation that I really seem to struggle with. When does a short price become too short? And what is value?
Is it just me who finds all that complete nonsense? If something is available at a price, and the true price is less, then it is value. What does being 75% certain of an even money shot mean? All this 'banker' talk, and '99% / 75% certainty' stuff suggests a complete misunderstanding of how to calculate probabilities and from that, value. It appears that he has some way to go before achieving his mission statement of
my attempts to go from mug punter, to serious gambler

Wednesday, 7 March 2012

John Wilson

I must admit that I don't often read the TARGET 100k AUSSIE PUNT blog, (the world of Australian Horse Racing is of limited interest to me), but the latest post was of interest. I mentioned 'big gamblers' in my last post, and many readers will probably be aware of John Wilson, aka Zeljko Ranogajec, who is "a professional gambler from Australia, with an annual, global betting turnover that is claimed to be over $1 billion" - and by most peoples definition would qualify as a 'big gambler'.

According to the Wikipedia entry, he dropped out of university to concentrate fully on advantage gambling. (Sports and horse betting can be beaten in the long run by skillful handicappers who only bet when they believe the line offers them an advantage). Indeed.

While reading this article, I came across a piece that sums up the big fish / small fish problem faced by the exchanges:
The nature of racing is also such that not everyone can win - it's a zero sum gain. In fact, the more Ranogajec won, the less was left for other punters. This is McIlwain's main gripe. "They are giving money back in rebates to punters so they can screw over the betting pools," he says.

"The ordinary punter is subsidising these guys." The result has been a devastating one for the weekend gambler. The sheer weight of money from Ranogajec, facilitated by rebates, has flattened out the odds and means that any wins enjoyed by punters are far smaller than in years past. It should be remembered that Ranogajec bets in all states, it's just that TT was the biggest provider of rebates." The recreational gambler is losing their money faster," McIlwain says." And if you take their money away from them too quickly, then they lose interest. "Taken to its logical end, it could mean smaller betting pools and less money to fund the racing industry.

Small Fish

Peter Webb again writes an interesting post, which I would have commented on, except for the fact that comments are closed for some reason. The core of the post was this:
On Saturday I was working a position into the Liverpool vs Arsenal match. I’ve often maintained there can’t be many big gamblers / traders out there as I rarely see big amounts in the market. OK there are reasons why I may not be able to see them, but even then, I rarely see anything that looks like a bigger player.

In total my bet was taken by 49 different opposing bets. There was an £800 a £280 but those were the largest bets taken. Most of them were pretty small. 95% were below £100 and 90% below £50, 75% below £25. You have to get to below £10 before the balance tips over 50% . Even if people were trading the the price I was at, it wasn’t with much money it would seem.

From a commercial perspective, much fuss it made about how premium charge payers ‘take out’ money from the ‘exchange ecosystem’ but my bet appears to deeply contradict that statement. My bet cost the same, from an infrastructure perspective, on it’s own as any one of those 49 bets. Therefore I conclude that my business was 49 times more efficient as it only took one transaction to place. As I offered money to be taken, I would classify that as providing liquidity as well. I didn’t nick a few quid off somebody else, beat a clock and nobody was under any obligation to take the counter-side of my bet. I fully exposed myself to the market.

So there you have it, I placed more volume, with less overhead to the exchange than all those 49 other people and created liquidity to boot. Not exactly the sort of customer you would encourage to take there business elsewhere? No, you would think you would want to encourage them into your fold. You get the feeling to put people off doing this would definitely be a strategic error, don’t you?
It has occurred to me in the past, and this post reminded me again, that it's perhaps a little strange that Betfair treat makers and takers in the same way regarding commission and charges. There's certainly a strong argument that making an offer should be encouraged by the exchange, perhaps in the form of lower commission relative to that paid by bet takers. As Peter mentions in his example, it is not unusual for a decent sized bet to be matched by close to 100 smaller bets.

Peter's reference to 'big gamblers' is of course relative, but relative to the financial markets, it is true that there are no big players on the exchanges, but when you are a £2 to £10 player, and there are many of those out there as evidenced by the size of bets matched, anyone putting four figures into the market probably seems a big player.