Tricky maths question – betting related

[RaverDrew]

Easy way...

Get a copy of Bet Trader it's a free program that connects directly to betfair's servers. Use the hedge button to trade out of a race you think you may lose.

 

[London_Calling]

Do think about this bet. Is it really necessary to equalise your selections? Because it may cost you money to do so. You could instead, simply, just back Horse 1 up to the level of 'Im Katalin' and save yourself that (bad value) bet. You still have a juicy profit on ANP should it come in! There's various staking strategies you might use here, but I would only consider lays of the initial picks and backs of the first horse.

I understand what you're saying. This is a scenario for markets where it appears a two runner strategy is appropriate - that's all, there are other scenario's for different markets and different race conditions.

Also, within this two runner strategy I am looking at different ways to mitigate on Stage One (which is, I think, what you're talking about), as well as optons for what to do, if anything, to enhance the initial strategy. I'm just exploring the strategy at the moment.

That aside, I've wanted to properly understand the maths in relation to 'greening up' for a while - and thankfully kabbes has helped with that enormously.

Your problem is...whoever is offering you the odds has already thought about this.

The people in the market at the relevant point (say about a furlong out) fall into two main categories, I believe:
1. The race readers
2. The statistical/maths based types

Towards the end the market become chaotic as people take different views on different runners at the same instance. And a very few second later, it all changes again as the runners themselves move around the field. Really, it's a far more dynamic and chaotic market that you might think.

 

[London_Calling]

Easy way...

Get a copy of Bet Trader it's a free program that connects directly to betfair's servers. Use the hedge button to trade out of a race you think you may lose.

Bit beyond that now, but cheers

 

[Jazzz]

I understand what you're saying. This is a scenario for markets where it appears a two runner strategy is appropriate - that's all, there are other scenario's for different markets and different race conditions.

Also, within this two runner strategy I am looking at different ways to mitigate on Stage One (which is, I think, what you're talking about), as well as optons for what to do, if anything, to enhance the initial strategy. I'm just exploring the strategy at the moment.

Well carry on! I confess you have lost me a little, however it is highly worthwhile to play around, examine the mathematics and get the feel for these things, good luck!

 

[London_Calling]

Here we go again . . . the power of maths, Part II

I've coded the equalisation strategy for 2 and 3 horses so it fires automatically when a criteria is met. The help for the maths on that is hugely appreciated! The next issue appears to be one of when is it appropriate to use the startegy. For example:

Scenario One:
Two runners A and B in the odds range 2.0 to 2.8
The third is above 5.0 (C)
The fourth is above 9.0 (D)
100 yards to go, it is effectively a two horse race, the two runners have a roughly equal chance

Q: In what circumstances do I equalise A and B?

Example: A is £30.00 in profit, B is losing £15, it would seem I am better off letting A and B take their chances (on the basis that, over time, events will even out and I will profit)


But what if: Scenario Two

A = +£15
B = -£30

Here, I must surely equalise, or must I?

The issue becomes more interesting when three horses are involved . . .


Fwiw, on the three horse problem, I’m currently deciding if the correct starting point (for this question) is to think in terms of, from here am I maximising, am I minimising, or am I playing it safe (by equalising)?

 

[fen_boy]

Can I ask an incredibly dumbass question?
In your opening email you said 5.0 was 4/1 in old money. I'd always thought 4/1 was 4.0 - I'm guessing I'm doing it wrong, but wanted to check it wasn't a typo on your part.

 

[London_Calling]

No worries, it's not a typo.

 

[fen_boy]

No worries, it's not a typo.

OK, ta.

 

[kabbes]

Here we go again . . . the power of maths, Part II

I've coded the equalisation strategy for 2 and 3 horses so it fires automatically when a criteria is met. The help for the maths on that is hugely appreciated! The next issue appears to be one of when is it appropriate to use the startegy. For example:

Scenario One:
Two runners A and B in the odds range 2.0 to 2.8
The third is above 5.0 (C)
The fourth is above 9.0 (D)
100 yards to go, it is effectively a two horse race, the two runners have a roughly equal chance

Q: In what circumstances do I equalise A and B?

Example: A is £30.00 in profit, B is losing £15, it would seem I am better off letting A and B take their chances (on the basis that, over time, events will even out and I will profit)


But what if: Scenario Two

A = +£15
B = -£30

Here, I must surely equalise, or must I?

The issue becomes more interesting when three horses are involved . . .


Fwiw, on the three horse problem, I’m currently deciding if the correct starting point (for this question) is to think in terms of, from here am I maximising, am I minimising, or am I playing it safe (by equalising)?

Bear in mind that all you are doing is reducing the spread of results at this point. You aren't increasing expected profit. If A is +15 and B is -30 and they are basically 50/50 then your expected profit is zero and equalising them will simply result in a bet of 15 on B, meaning that you definitely win nothing. So it simply comes down to whether you prefer a fair gamble.

Economically speaking, in order to know whether you should equalise your bet, you need some idea of your utility curve.

 

[kabbes]

Sorry, I think I got that wrong. If it is +15 and -30 then your expected profit is -15. Equalising instead guarantees that you win zero. If you are risk-neutral then you would equalise ASAP.

 

[London_Calling]

I've got some sense of the maths now, I suppose what I'm moving on to consider is the most efficient solution in any given circumstance - that's important as this process will be automated (due to the speed at which markets move in the closing stages).

By efficient, I presumably mean - depending on the circs of the moment - the least costly, the most profitable, or the best compromise ('compromise' would be to equalise).

I'll google 'utility curve' a little later as that sounds the right kind of thing. Cheers again.

 

[Jazzz]

Here we go again . . . the power of maths, Part II

I've coded the equalisation strategy for 2 and 3 horses so it fires automatically when a criteria is met. The help for the maths on that is hugely appreciated! The next issue appears to be one of when is it appropriate to use the startegy. For example:

Scenario One:
Two runners A and B in the odds range 2.0 to 2.8
The third is above 5.0 (C)
The fourth is above 9.0 (D)
100 yards to go, it is effectively a two horse race, the two runners have a roughly equal chance

Q: In what circumstances do I equalise A and B?

Example: A is £30.00 in profit, B is losing £15, it would seem I am better off letting A and B take their chances (on the basis that, over time, events will even out and I will profit)


But what if: Scenario Two

A = +£15
B = -£30

Here, I must surely equalise, or must I?

The issue becomes more interesting when three horses are involved . . .


Fwiw, on the three horse problem, I’m currently deciding if the correct starting point (for this question) is to think in terms of, from here am I maximising, am I minimising, or am I playing it safe (by equalising)?

These are essentially exactly the same scenario, London Calling.

Think of it this way. Suppose you have a bankroll of £1000 in addition to the bets placed. So in scenario 1, you have £1000 plus your positions of +£30 and -£15. Now take scenario 2. your situation is exactly the same as a bankroll of £985 plus the positions of scenario 1.

So really your decision to equalise is very similar in both instances.