Odds and Probabilities

[Super_Dash]

So its no secret odds are supposed to reflect the probabilities of events to occur as perceived by individuals (on an exchange), traders, organizations or whatever.

If it has a 1 in 2 chance of happening the odds are supposed to be 1/(1/2) = 2 or a 2 in 3 chance of happening 1/(2/3) = 1.5 so on and so forth.

The driving force is supposed to be probabilities being reflected in the odds.

In practice I have generally found it often works the other way, the odds often drive my perceived probabilty of things occuring.

I.e. I think Blackpool have a decent chance against Newcastle, so I wake up with the intention to find an arb where I can make money if blackpool win; I find such an arb but Newcastle are considered long at 4/7 and are available at 1.52 to lay on the exchange.

The amount of money I had to play with was £400 worth of arb profit on all outcomes so I could easily lay to lose £300 and be up £400 + about £600 but instead I decide Newcastle will wipe the floor with them and underlay to make £100 if Newcastle don't win or £550 if Newcastle win.

The odds completely changed my own decision (which you can debate to be sensible or not by studying championship form all you want, how I came to that decision is a completely different discussion).

After a series of successful "spin-ups" I had came to a halt and decided to bank the profit and start again, my first tip was going to be Villa +0.5 vs Stoke at about 1.575ish early last week, however by the time I came to place the bet the odds available were closer to 1.72ish, this should mean I'm getting even more value and that the bet should definitely be a go from my point of view.

Instead the shortening odds altered my perceived probabilities and Stoke (who were between 2.3 and 2.4 at the time if I remember rightly) seemed to be the ones I thought would win and I decided to underlay in their favour.

Once again, some one elses perceived probability became mine without them even having to try and convince me, if the markets would have remained as they had I'd of had more belief in my selection but I always feel like dramatic market shifts are being caused by other peoples information inflows being greater than mine, even if that was true, should somebody elses information that I don't have affect my perceived probability? Probably not.

Does any one else let the odds effect their perceived probabilities or am I alone in this backwards, counter intuitive phenomenom?

[nish81]

Interesting post Super. I do let odds affect my perceived probabilities - only the betfair exchange odds because imo since it's a (reasonably well functioning) 'free market', odds there have the best chance of being 'right'.

However, I question myself as to how smart this is. Do betfair odds actually reflect the probability of something happening, or are they inflated on either side by matched bettors, traders, and other people who throw sums of money into the market without actually considering the probabilities. One example of what I mean is to do with the PRS offer - Andy mentioned (I think it was Andy!) in one of his diary posts that he would lay a prs pick straight after it was announced and then reback because it would drift out with all the people laying it. Obviously here nothing has changed to do with the horse or the form, the odds have only drifted because of all the people laying off their prs bets. And since all the bookies seem to follow betfair these days (cut when betfair price falls, etc) then I'm not sure if any bookie actually looks at the probability of an event happening, or whether they just follow the betfair price, which in turn might be meaningless.

And about your first blackpool vs newcastle arb example. The high probability of newcastle winning (at least as implied by the odds) is reflected in how your profit changes as you over/underlay - if you underlay, you lose more if newcastle dont win than you gain if they do win, because the odds are in favour of them. Like how underlaying is better at high odds.

I hope the above made at least some sense :x

[Odysseus]

And since all the bookies seem to follow betfair these days (cut when betfair price falls, etc) then I'm not sure if any bookie actually looks at the probability of an event happening, or whether they just follow the betfair price, which in turn might be meaningless.

I'm not sure about that theory. It seems to me that with horse racing odds, it's Betfair that follows the industry price, not the other way round.
I don't pretend to be a great horse racing expert but I've been doing the B365 4/1 offer for well over a year now and watching the odds just before the race, it seems clear that you often see a very sudden shift downwards at BF immediately after B365 cut their odds. I always assumed that when they're on board prices immediately before a race, the odds are determined more by what's happening on the course, rather than at the bookies, who all seem to cut at the same time.

[RudolphUcker]

A couple of months ago I read an interview with one of the top horse-racing tipsters (possibly Nigel Twiston-Davies? ).

He said that these days you don't really need to study form and going to profit from horses, all you have to do is closely watch the betfair market for the 10-15 minutes before the race, wait until right before the off, and bet on the horse that had steamed the most in that time. Makes sense as people with inside info want to get their bets down, and lots of them will use betfair.

I intended to trial that over a period of time with smallish bets, but haven't got around to it yet. Anyone else think there's mileage in that?

[wobbler]

A couple of months ago I read an interview with one of the top horse-racing tipsters (possibly Nigel Twiston-Davies? ).

He said that these days you don't really need to study form and going to profit from horses, all you have to do is closely watch the betfair market for the 10-15 minutes before the race, wait until right before the off, and bet on the horse that had steamed the most in that time. Makes sense as people with inside info want to get their bets down, and lots of them will use betfair.

I intended to trial that over a period of time with smallish bets, but haven't got around to it yet. Anyone else think there's mileage in that?

Interesting thoughts there but I recall that in my 365 4/1 days I managed to jump on some right steamers (leading me to believe that it was going to be easy as that all the time ) but I'll be honest the majority of the time they lost.

The reason I know this is because (as a little side bet for me as well as the bonus offer) I used to stick a couple of quid back bet on it because I thought that it "had" to be a real chance of it winning as it was being so heavily backed steaming in as it was.

That turned out to be a load of bollocks of course lol.

[Odysseus]

A couple of months ago I read an interview with one of the top horse-racing tipsters (possibly Nigel Twiston-Davies? ).

He said that these days you don't really need to study form and going to profit from horses, all you have to do is closely watch the betfair market for the 10-15 minutes before the race, wait until right before the off, and bet on the horse that had steamed the most in that time. Makes sense as people with inside info want to get their bets down, and lots of them will use betfair.

I intended to trial that over a period of time with smallish bets, but haven't got around to it yet. Anyone else think there's mileage in that?

I think so. I was actually musing about this this the other day and was wondering whether to float the idea on here to get other peeps experiences.

Essentially, just doing the B365 4/1 offer and watching the odds in the last 20 mins or so. I guess any evidence could be skewed as I only look at the C4 races on some saturdays (a minority as I usually don't have the time) and the Feature races on other days - usually 2 per day. Perhaps these races are influenced by all the folks looking to lay the best match with B365 so all could be laying the same horse. Not sure how much effect this will have in the overall market.
But my experience over the last 12 - 18 months is that overall and allowing for variance, I always win at B365 and have to keep withdrawing money. If I hadn't layed, I would be up to the tune of thousands!
I was wondering how other people who operate in the same way fare and whether it would be EV+ in the long run not to lay?
I realise that the to lay or not to lay discussion has been aired many times but not sure if it has specifically been directed at these races in particular.

[Landprofits]

A couple of months ago I read an interview with one of the top horse-racing tipsters (possibly Nigel Twiston-Davies? ).

He said that these days you don't really need to study form and going to profit from horses, all you have to do is closely watch the betfair market for the 10-15 minutes before the race, wait until right before the off, and bet on the horse that had steamed the most in that time. Makes sense as people with inside info want to get their bets down, and lots of them will use betfair.

I intended to trial that over a period of time with smallish bets, but haven't got around to it yet. Anyone else think there's mileage in that?

I don't think there is really any mileage in betting on a horse after it has steamed - the value of the selection has gone at that point. Perhaps if you were able to recognise the price movement and get on it as it drops.

[Diamondgeezer]

A couple of months ago I read an interview with one of the top horse-racing tipsters (possibly Nigel Twiston-Davies? ).

He said that these days you don't really need to study form and going to profit from horses, all you have to do is closely watch the betfair market for the 10-15 minutes before the race, wait until right before the off, and bet on the horse that had steamed the most in that time. Makes sense as people with inside info want to get their bets down, and lots of them will use betfair.

I intended to trial that over a period of time with smallish bets, but haven't got around to it yet. Anyone else think there's mileage in that?

Sounds like total rubbish to me. No doubt he has the big bets already down and is looking to lay some off as the price contracts on BF.

Actually this is exactly what mug punters do - they see the 'smart money' is on and follow thinking it must be a winner. I did this once at a racecourse some years ago when the guy infront of me had £100 on a horse so I had a fiver on thinking he knew something. Never occurred to me at the time the guy could just as easily be chasing losses. The point is seeing money go down is a powerful factor for mug punters. But following the money is always a mistake because the value or edge will have gone at this point.

[frankbutcher]

I ran a bot a while back that that backed steamers of a certain % and layed drifters likewise in the 30 mins before the off. Nothing of any conclusive value came from backing but I lost a fair bit laying drifters. All sorts of reasons for that I guess, but the only way you could really find out is to paper trade 1 or 2 theories over an extended period of time looking for trends.

[swanbet]

I ran a bot a while back that that backed steamers of a certain % and layed drifters likewise in the 30 mins before the off. Nothing of any conclusive value came from backing but I lost a fair bit laying drifters. All sorts of reasons for that I guess, but the only way you could really find out is to paper trade 1 or 2 theories over an extended period of time looking for trends.

any thoughts on backing drifters? could there be some value in that? overreaction giving a good price?