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Author Topic: Trading on Betfair  (Read 2924 times)

Bundy

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Trading on Betfair
« on: October 09, 2013, 02:53:28 PM »

Following are some methods to use when trading on Betfair.
There are many ways and I have not covered them all here.
The calculations as examples below do not take Betfair Commission into consideration.

1. The "Free Bet"
The theory to gain a free bet is simple enough.

First off you BACK the runner for example @ $10 for $100 That is a nett profit of $900
You now place a LAY bet @ $9.40 for the same amount of $100 That is a liability of $840
Now subtract the liability of 840 from the nett profit of 900 and you have a free bet of $60 going for you. (Subject to the LAY bet being matched of course).

The secret here is not to be greedy and set your LAY bet to low. In fact I mostly just use one tick increments and get matched many times where possible.

You can then decide either beforehand or during the run if you want to hedge the bet or not. Hedging is explained further on.

The free bet also works in reverse ie you can LAY first then BACK if you feel the runner is going to drift rather than shorten.

2. Trading to increase the odds.

A simple but slightly more volatile approach to gain overs on your runners is to first place a BACK bet, again @ $10 for $100 giving a nett profit of 900.

Now you place a LAY bet @ $9.40 for $90, a liability of 756 leaving you with a bet of 144 to 10. That is now odds of around 15.4/1 Massive overs. Do not let these trades go in play if you do not wish to risk losing the $100. It is better to take a small loss pre in that situation by hedging out or taking a scratch trade.

3. "Standard In Play" Trading

A method used by many simply to ensure profit when your selection firms in running. Again $100 @ $10 for a nett profit of $900.

Now you pick a price where you can get some or all of your stake back and be assured of a profit. In this example we are confident of our selection trading well so we choose $7 to return all our outlay which is then a free bet of 300 but we want to ensure a profit when it trades lower so we now lock in a LAY of 100 @ $2.30 (I did say we were confident).

Now here are the scenarios:
Our runner trades to $7 and our 100 stake is returned but trades no lower so we break even.
Our runner trades to $2.30 but no lower we now win 100
Our runner wins the event we now win $170

It is up to you to decide what exit points and what amounts to use. I base them on my confidence in the selection but always leave the option open to bail out in play for a small loss or to break even if you feel the runner is not performing to your expectations.

4. Hedging

This is an example of how to calculate a Hedge bet. There are various software programs that can be used to do this for you with a single click. If you would like to know more about them then send me a PM.

Hedging is simple mathematics.
Again we have a BACK bet of 100 @ 10 for a nett profit of 900 and a theoretical LAY @ $9 for 100 leaving a profit of 100
You now divide that 100 by the lay odds of 9 so it is 100/9 = 11.11 Your hedge LAY is now $111.11 leaving you with a profit of 11.11 across all runners when the bet is matched.

These are just some examples and many would choose different exit points and amounts. It is up to you to decide how you would like to play it.

I regularly exit trades early for a small loss if I feel the price is going against me. Every trade left to work in play becomes a gamble.

Feel free to add your own methods and thoughts.
« Last Edit: October 09, 2013, 03:17:10 PM by Bundy »
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Bundy

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Re: Trading on Betfair
« Reply #1 on: October 09, 2013, 03:14:53 PM »

That liability under Para 2. should of course read "Now you place a LAY bet @ $9.40 for $90, a liability of 756" not 144. My apologies.
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