Avoiding the Big Mistake at Betfair – Forgetting to Hedge (By Betfair.com)

Betfair.com · Jan 18, 2009

<o:smarttagtype namespaceuri="urn:schemas-microsoft-com

ffice:smarttags" name="place"></o:smarttagtype><o:smarttagtype namespaceuri="urn:schemas-microsoft-com

ffice:smarttags" name="City"></o:smarttagtype><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w

unctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w

oNotPromoteQF/> <w:LidThemeOther>EN-GB</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w

ontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w

ontVertAlignCellWithSp/> <w

ontBreakConstrainedForcedTables/> <w

ontVertAlignInTxbx/> <w:Word11KerningPairs/> <w:CachedColBalance/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><o

></o

> Placing wagers at Betfair compared to other sportsbooks offers two major advantages. The first obvious advantage is the ability for the bettor to get higher odds on a team/horse/player that he wants to back. Because there is no vigorish built into the prices at Betfair the odds offered on games are always higher for backers than it would be at a traditional sportsbook.

For example, the AFC Championship at Betfair offers the Pittsburgh Steelers at 1.46 on the buy and 1.47 on the lay. This equates to a line of approximately -215 if one wanted to bet on <st1:city w:st="on">Pittsburgh</st1:city> and +212 if one wanted to bet on <st1:city w:st="on"><st1

lace w:st="on">Baltimore</st1

lace></st1:city>. Most other sportsbooks have a line on the game offering +200 if one wanted to bet on Baltimore and -250 if one wanted to bet on <st1:city w:st="on"><st1

lace w:st="on">Pittsburgh</st1

lace></st1:city>. Needless to say the extra 8-15% can be quite important when determining whether the player will be in a profit position by year end.
<o

> </o

>
The second advantage is the ability to lay off bets once a game, tournament or race goes into play. Where bettors often make a huge error in judgement is not hedging on a bet they planned to. It happens to everyone and invariably leaves the bettor banging their head against a wall when they lose.

For example say a player bets on Zach Johnson at 30/1 odds for $20; the potential payout is $600. The bettor may decide that if Johnson ever gets to 3/1 odds they’ll lay $60 guaranteeing a $40 profit at worst and $340 if he wins. Here is the inevitable downfall of so many. Say Johnson is leading by a stroke after day 2 with Tiger Woods and Phil Mickelson 6 shots back. The odds being offered for Johnson on the lay is 3/1 (dividend of 4.0) dictating they should lay off the bet as planned. There are generally 3 reasons why the bettor may decide not to lay him off in the end and all are folly.
<o

> </o

>
First, the player could just forget. Perhaps the player has to go to a family function or other event and just forgets he had the bet. This is predictable; after all everyone’s life can’t be controlled by gambling. This situation can be overcome very easily which will be described shortly. Second, the person could change his mind and decide to let the bet ride out. If they are confident that the player/game is in hand there is really no reason to give back some of the action. As most gambling books will attest though, never second guess yourself. The third and most common reason is that they believe they are not getting full value for the bet. The thinking in the scenario described above will probably be something like “Tiger and Phil are so far back and my guy is ahead. I should be getting at worst 2/1 on him so I won’t sell. Of course 3/1 probably is fair value but bettors always overestimate the value of their bet.

The following is almost always the outcome. On day 3, Tiger Woods starts to make a bit of a run and seeing this the Zach Johnson bettor decides maybe he’d better take the 3/1 odds after all. Of course, everyone else at Betfair sees the same thing and Tiger’s odds plummet while Johnson’s odds soar. So the 3/1 odds now becomes 5/1. Of course once again the Johnson bettor thinks he’s being ripped off so he doesn’t take the wager and lets it ride. Then on the first hole Johnson gets a bogey.

Now the Johnson bettor thinks he’d better take the 5/1 odds but naturally those odds are now 10/1. And the cycle goes on until the Johnson bet becomes virtually worthless.
<o

> </o

>
In past years there was really nothing the Johnson bettor could have done to avoid this situation if he didn’t have self discipline but Betfair implemented a new feature last year to combat this scenario. When one places a bet on a market that will be going into play, there are 3 bet options as soon as the market is turned in play. These include “cancel”, “keep” or “take sp”.

“Cancel” means that the bettor just wants the bet cancelled. “Take sp” means the bettor is willing to take whatever the starting price is. And “keep” means they want the bet to remain until it is either taken or lapsed. The keep option is invaluable for the situation described above. One can back Johnson at 30/1 prior to the start of the tournament and immediately put in a lay option on Johnson at 3/1 (4.0 dividend) for the amount requested and just leave it. When the market is turned on the bet remains. If Johnson ever does reach the 4.0 dividend the bet will be matched and the profit guaranteed and if Johnson doesn’t get to the 4.0 dividend then the bet just lapses. The great thing is it takes away the emotional aspect of the bet which invariably results in the bettor not hedging as he expects.

As well if the bettor is ever in a situation where he can’t follow the action, perhaps because he is at a family function, he can be assured that the bet will be taken if the odds get to the amount he is willing to take thereby providing an easy mind as he doesn’t have to fret about the bet while at the family function.
<o

> </o

>
Take it from experience from almost everyone who has made the same mistake at Betfair. If you plan to hedge, fail to do so and lose when you had the opportunity you will be kicking yourself. If you hedge and the bet wins you will not feel upset about having hedged realizing in the long run it is the only way to make a profit. The “keep” option was a great initiative on the part of Betfair. Don’t forget to use it.
<o

> </o

>
<o

> </o

>
<o

> </o

>

By
www.betfair.com/NA/

As for Canadians (and other currently accepted players):

Account Help is available 24/7.
By Email: info@betfair.com ('Canada' in the Subject Line)
By Phone: 1-866-381-7119 (Free from Canadian landlines)

More Betting Tips on the Betfair Canada Blog

((Betfair does not currently allow US Citizens to play on Betfair.com))

BetConsensus · Jan 24, 2009

Great article! Thanks for taking the time to post this up. There are lots of advantages to using betting exchanges. I'm really happy they came along.

Betfair.com · Jan 24, 2009

Things to understand about exchanges

Thanks BC!!

There are some really good articles on
Betfair Blog

US Sports are in the Canada Blog

The trouble is people are a bit afraid to use them at first cause it's not what they are used to!!

I've been an Rxer almost since the beginning and a Sports Gambler for longer...

It took me a little while but once I started to use Betfair, I was hooked!! I think they call it the "Betfair Eureka Moment" when a light goes on and you "get it"!

I think a big thing that people need to understand is that an exchange allows people to bet against each other.

1. Therefore, you can bet the traditional way (Back betting)
2. You can be the bookie! (Lay betting)
3. Every game is in-play so you can get out of a bet anytime or enter the betting at any time.

Also in Canada, our government lottery uses decimal odds (you can only bet 3-6 game parlays). So does betfair - so this shouldn't be too much of a stretch for Canucks!

Thanks,

Rob