The ways to make sure losing is not an option.
How odds move The most common question when trading is, "which way are the odds are going to go?" In horseracing, this can be tricky as the odds can be very volatile, but in sports like football it is not that difficult.
In this example we are looking at the World Cup match between Brazil and North Korea. My first bet is to back 0-0 in the correct score market for pounds 100. This seems odd as you would think there wasn't much chance of this happening. But as the match progresses without a goal, I know that a 0-0 scoreline will become more certain. By backing at the current odds and laying it back into the market at lower odds we can make a profit. I backed it at 25 and then put a lay order in at 24 using a pounds 100 bet.
We will now win pounds 100 if the match ends 0-0 and have no risk in the market if anything else happens. How did we know the odds would move like this? We didn't, this trade was completed before the match started and we simply backed at the current lay price, waited for this order to get filled and then laid at the current back price.
If we had to close our trade in play, Brazil took until the 55th minute to score. In that time the odds on 0-0 came in to around 5-1, meaning your trade would have been completed easily. We knew how the odds would move and have taken advantage of that. Some odds move in mysterious ways, though. So we created a sister product to Bet Angel called Soccer Mystic. Use this to understand and exploit how the odds move when a match is in play.
Win whatever the result While we can now win pounds 100 if the match ends 0-0, this result is unlikely. It would be much better if we could guarantee a profit whatever the result.
One thing that all traders search for is a green book. The 'green' comes from the status of your profit and loss display after you have successfully completed this type of bet.
When you 'green out', your entire profit and loss displayed for the event you are trading will be green, hence the name. The upshot of this means you will win money whatever happens in the underlying event. But how is it achieved? When you green up, what you are effectively doing is transferring profit from one selection to the rest of the field. You do this by laying slightly more than you back on a traded position.
In the Brazil v North Korea match we feel that 0-0 is an unlikely score, so after completing two trades we would green up. You would then have a profit whatever the final score. That profit is much less than the pounds 100 we had on 0-0 but now our profit is 100 per cent guaranteed whatever the result.
Rather than do the hedging yourself it's best to use software to perform the greening transaction, just click a button on the screen and it will spread the profit out across all selections. Being able to win money regardless of who prevails has obvious attractions.
How to make a loss, but not lose any money One of the real oddities about trading on betting exchanges is that it is possible to get your trade wrong and make a loss, but still not lose money. The reason for this odd situation is due to the unique way in which markets are settled on betting exchanges.
When you place a bet on a betting exchange you will either win or lose, that is fairly obvious. But betting exchanges only settle a market on whoever wins that market. That is a fairly logical way to settle a market but, when trading, this aspect takes on a whole new characteristic.
In the graphic (left) we have lost money on Thundering Home. The curious thing is that our loss on him will only be recognised as a loss if he actually thunders home!
To reiterate my point, only if that horse wins we will make a pounds 25 loss, if this horse fails to win then we will lose nothing. The reason for this is that none of the other horses have a loss on them. None of them have a winning amount on them either, so if any horse other than Thundering Home goes on to win, we will win nothing; but we will also lose nothing! Strange but true.
Recycle your money Another factor that works well in your favour if you trade on an exchange is the ability to recycle your money through the market. By recycling what we mean is that, if you trade, you are able to use the same money again and again in the same event. The benefit is that you can potentially earn multiple profits from using small amounts of money repeatedly.
In traditional gambling you place a bet and that's it. You have used your stake and now have to wait until the event is over before you know if you have won or lost any money.
When trading, you either win or lose money on that particular trade. At that point your stake is returned to you in a process called 'instant settlement'. The practical upshot of this is that you can re-use the money immediately.
If you have just pounds 100 in your account you can open a trade on the betting exchange and close it seconds later, hopefully for a profit, and at that point you can immediately put it back through the market again for another trade.
You can see in the graphic (top left) that we have combined all the elements into one neat profit.
First we traded Thundering Home with pounds 100. The first trade went well and made us pounds 5 but the next made us a loss. We let this loss stand and then decided to trade Keenes Royale. We did better on him and managed to put through five trades of pounds 100 each, making a total of pounds 500 traded on the back and lay side.
In total, using only stakes of pounds 100, we managed to bet over pounds 1400 in the market. The final bet was a greening up bet and this ensured we won whoever went on to win the race - Keenes Royale went on to win. All this was done just a few minutes before the start of the race. I recorded this trade live to capture the illustrations, so a video of this is available on betangel.com.
That shows the appeal of trading rather than traditional betting on an exchange.
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|Publication:||The Racing Post (London, England)|
|Date:||Jun 26, 2010|
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