I’ve mentioned a few times in the comments about my involvement in ‘betting on horses’ and have often been asked exactly what I do. Well since one poster suggested it may make an interesting article, I thought I’d give it a whirl, see if anyone thought the same.
Since the porn business took a terminal nosedive around the same time as, and as a result of, the banking crash, I began looking for something else to do, and seeing as most of my working life has been in the vices (casino pit boss, porn producer) I naturally looked that way again. For several years I scratched a living as an online poker player, right up until the FBI shut down Full Tilt Poker, and took my £12,000 bankroll with it. (I eventually got it back)
Around this time I’d also discovered the betting exchanges, and had been dabbling with some success, at low stakes, trading tennis matches. However, suitable games to trade are few and far between, and at inconvenient times (US and Australian Open, for example)
I needed something more life friendly, and that’s when horse racing markets began looking attractive. They happen in the afternoon, they’re every 10 minutes or so, and there’s always another one along shortly.
A betting exchange (Betfair is the biggest and usually the only game in town) is where people place bets against each other rather than with a traditional bookmaker, and this introduces the concept of LAY betting. You can place a BACK bet, that is you’re betting something will happen, or you can place a LAY bet, which is a bet that something won’t happen.
Most of the time, in a binary market, a LAY bet is the opposite of a BACK bet, for example in a tennis game, say Federer v Nadal, backing Federer is the same as laying Nadal. However, in a market with more than one outcome, that changes. For example, with Liverpool v Arsenal, backing Liverpool is NOT the same as laying Arsenal, laying Arsenal is betting that they won’t win, so a winning LAY bet will also include the draw.
Now what I and my peers do is called ‘trading’. There’s a difference between betting and trading, yes, a small part of it is snobbery, but generally, a bettor places a bet on an event in the hope of a specific outcome, a trader places a series of bets in order to generate a profit regardless of the outcome, and (as In my case) often before the event even starts.
Now, how do I make money from all this, you ask? Well, by placing a series of BACK and LAY bets on the same market, it’s possible to generate a tiny amount of profit each time the cycle is successful. If you BACK a horse at 5/1, then LAY it for the same amount at 4/1, you get a small amount of money left over, which is yours to keep! And best of all, Betfair give you your stake back (you don’t have to wait for the race to be settled to get your stake back, just your profit) and you can do it all over again! And again, and again!
Remember, we’re not betting on any particular horse, we’re trading on the shifting betting patterns of the horses in that market. And that’s where the skill comes in, identifying which market is likely to move in which direction is the key to getting this right. Skill, knowledge and practice is what is needed, I’m afraid there are no easy answers or magic systems to this (Most readers will stop here!)
There are a few bits of trading software available in order to facilitate this trading, notably BetAngel and GeeksToy. ( I use the latter). Now the general idea behind being a trader as opposed to a gambler is to generate modest profits on a regular basis, rather than scoring a big win every now and again. This is where the software comes in especially handy. Once you have generated a profit on a market (horse) you still only have a free bet on that horse. If it goes on to win, fine, if it doesn’t, you don’t lose anything, but all your trading was for nothing. This is where the ‘greening’ function comes in. (It’s called greening because profits are shown in green ink.)
Once you have your profit locked in on one horse, the greening function will calculate how to divide up that money and place a bet on every horse in the race at its respective odds, in order to guarantee the same return regardless of the winner. If you get it all right, you have a winning bet on every horse before the race starts! And that is the essence of trading.
I’ll run through a couple of examples;
Key: The numbers in the centre column are the odds displayed in a decimal format.
The blue boxes are where BACK bets are placed, the numbers represent currently unmatched bets.
The pink boxes are where LAY bets are placed, again, the numbers are unmatched bets.
The numbers on the left show the amount of profit after greening. Numbers on the right are how much money has been matched at that price.
Here, after taking all the information into account, I’ve decide to take a position laying STORMINGIN at odds of 6.0 for £200.
Here, the bet has been matched, this means my liability (the most I can lose) is £1000. The green and red numbers on the left show the amount of profit or loss to be made every time the odds shift up or down. (each change in odds is known as a ‘tick’)
Now I know most of you will be thinking, “What? Is he mad? Risking £1000 to win £6?”. But the liability is the maximum we could lose if we let the race run its course without further intervention. In reality, I’ll be running a stop loss at around 5.5, which means if the trade goes against me, I’ll exit the trade for a loss of £18.18.
(This is where most traders fail, and inability and stubbornness to admit they got it wrong, letting the race run in the belief that the market will correct itself and prove their decision right, and taking a huge loss when it doesn’t)
As you can see here, my decision was correct, the horse’s price began to drift, and I decided to end the trade at 8.2. The greening function has calculated that placing a back bet of £146 at 8.2 will give me a profit of £53.66 whichever horse wins.
And there we are, the odds have reached 8.2, the BACK Bet has been matched, I have my profit locked in, and there’s still 2m 33s before the race starts. That’s me done for this trade, no need to see how it turns out, time to move on to the next race and (hopefully) repeat.
As you can see, the green number shows how much I win should that horse win the race. I have the same profit to come on every horse.
Here’s another one. In this race I placed a series of LAY and BACK bets in order to generate a profit
And here’s an example of tennis trading. Here I was ‘backing the server’ in order to generate a profit. This was trading ‘In Play’ whilst the game was taking place.
Murray v Goffin
I’ve just given you a basic overview of the traders ways as I play it, there are numerous other ways to trade, and you can trade on any sport or event (some genuinely trade Strictly and I’m a Celebrity). Hope you found it interesting.
Disclaimer: Despite my assertion that trading is different to betting, it’s still gambling. Most gamblers lose. Most people who try to trade will lose. Don’t do it. If you do, start with small stakes for fun only.
When the fun stops, STOP.
© Porn Baron 2018