Laying off at various odds
I thought I might give some examples of how you can use these calculations in situations that are commonly encountered. One of these that I will show here is when the odds change on you when you once you have made a bet at the bookie. It could be that the odds have changed completely or when you suddenly see the liquidity disappear before making the lay bet.
First I will work out the calculation needed for this, though unless you are really keen to understand them then they may not mean anything to you, just skip to the practice session below. However, the final calculation and how it is used is one that you may find useful in these situations.
So, if we look at the first situation we have when we have made our bet, your profit and loss on a fully matched bet from the Bet Table will be as follows:-
Pb + (-Ll) = (-Sb) + (R'l)Assuming we will have two stakes (Sl1, Sl2) to lay at two different odds (Ol1,ol2) lets rearrange the above equation to give use the second stake needed, Sl2 on odds of ol2.
Pb + Sb = R'l + LlThis gives us a way of working out our stake and even though it may look complicated at first glance it is easily worked out. Well worth practising a few times for when it is needed.
Rb = R'l + Ll
(split each of the returns and liabilities into 2)
Rb = [ Sl1(ol1-1) + Sl2(ol2-1)] + [Sl1(1-cl) + Sl2(1-cl)]
= Sl1(ol1-cl) + Sl2(ol2-cl)
Sl2(ol2-cl) = Rb - Sl1(ol1-cl)
(finally gives us)
Sl2 = [Rb - Sl1(ol1-cl) ] / (ol2-cl)
Here is a practical example of how it can be used
For this example I have bet at a bookie £20 @ 2.2 on Pakistan
At the exchange I can see the odds of 2.12, a small arb
I can us the spreadsheet to work out the lay stake for me but for this example lets use the calcs.
From the table earlier in the thread I can see that to work out the lay stake I can use the (no commission on bet) Matching Lay Stake equation.
Sl = SbOb / (Ol-cl)For this I will use a lay commission of 4.9%, so the lay stake needed will be
Sl = ( £20 x 2.2 ) / (2.12 - 0.049)So I go to the exchange and try to lay it off, except I only manage to lay off £12.94
= £44 / 2.071
= £21.25 rounded to nearest penny
You of course could queue and wait for it, if you think it will come in, but let's get this sorted out.
The calculation is
Sl2 = [Rb - Sl1(ol1-cl) ] / (ol2-cl)Now Rb is your back return, its the same as bet stake x bet odds (SbOb) and it isn't going to change. We worked it out earlier to be you return of £44 at the bookie.
Just throw the stake and odds you have managed to do into the equation together with the next available odds you can use to lay off, in this case 2.14.
Sl2 = [Rb - Sl1(ol1-cl) ] / (ol2-cl)Becomes
= [£44 - (£12.94 x (2.12-0.049))] / (2.14-0.049)Now that looks a lot of work to do when you are panicking but practise it a few times and you will see it is quite quick and easy. A tip here is to work out the top bit and write it down (or stick it in your calculator memory, because it will not change even if the odds still do). For example, I work out the Rb - Sl1(ol1-cl) bit (becomes 17.20126) and it tells me what liability is left to cover, if the odds jump out again you can just divide it by the new odds minus the commission.
= (44 - 26.79874) / 2.091
= 17.20126 / 2.091
= £8.23 rounded to nearest penny
Say it becomes 2.18,
It becomes 17.20126 / (2.18-0.049) = 17.20126 / 2.131 = £8.07
Anyway, the next thing to do here is remove your unmatched bet, in this case, in the image above, click on the little white cross in the red box next to Pakistan
Enter in the new lay stake
This is the result
If Pakistan wins I gain £24 at the bookie and lose £23.88 at the exchange - profit £0.12 (Happy days...)
If New Zealand wins I lose by £20 at the bookie and gain £20.13 at the exchange - profit £0.13
Note the image above gives the profit figures net of commission - you can turn this on and off in the options link on the exchange market page.
A point you might want to double check your figures before you submit the bet, to make sure you have done everything right is just before you confirm the bet. You will see the exchange show you the result of your changes and you can compare them against you bet at the bookie then to see what the profit and loss would be. Just before I submitted I got this:-
I double checked the New Zealand £20.13 - Book Stake £20 was OK
Then checked Pakistan -£23.87 + Book Profit £24 was OK
I hope you didn't find that too long winded - I want to make sure that there were no areas that could cause any confusion. I respect there are many experienced here, Andy etc who do this without thinking too much about it, but for those of us who need crutches like this I hope it is of some use.