Just How To identify value in your bets? That is the big question. My friend, Alex Napier who operates the best online sports bet Soccer website, has asked me to write this article to describe how bookmakers' percentages are calculated and how they provide a guide to assessment of value in the odds on offer. He has asked me to look at soccer betting, where, because of the few possible outcomes (three choices - win, lose or draw) the odds offered are short in any event.
A perfectly "balanced book" where the odds offered exactly reflect the possibility of each team winning or the draw would produce an overall total of 100.00%. Theoretically the bookmaker will profit by the total percentage on the match less 100.00%. In the above table bookmaker 1 should profit by 11.89% of turnover on the match and bookmaker 2 by 11.23%. At first sight there will not seem to be much between them but whenever we compare the theoretical profit of each the margin on the bookmaker 1 odds (i.e. 111.89 - 100.00 = 11.89%) is 5.84% higher than the 11.23% margin on the bookmaker 2 odds! Where the odds on offer produce a theoretical profit for the bookmaker the book is said to be "over round". The bookmaker 1 book is over round by 11.89% and the bookmaker 2 book by 11.23%.
Where the odds on offer total less than 100.00%, which never actually occurs with the odds provided by anyone bookmaker as they'd in theory make sure to lose on the event, they are "under round" . The losing percentage could be 100.00% less the total odds percentage. Not surprisingly this will not happen. Individual bookmakers do not offer odds on the possible outcomes that would give them a loss. What does happen, although very infrequently, is that the odds provided by a selection of bookmakers may differ to the extent that one can find a combination where those for the 3 possible outcomes are under round. Therefore you may bet on all three possibilities - win, lose and draw - and provided you allocate your total stake within the correct proportion you will make a profit of the percentage by that you just can bet at under round odds.
Identifying value
From the above data it's pretty obvious that the 4 - 1 offered by bookmaker 1 in respect of the home team winning is the best price, there's no difference within the odds offered for the draw but bookmaker 2 offers the top odds for the away win. The question then arises, which is the greatest value? Obviously the 20.00% provided by bookmaker 1 on the home win will be the lowest percentage so could be the top value, but this is too simplistic. There has to be a yardstick to measure the odds against. That is your own assessment or your advised assessment of the chance of each outcome. If you give each possibility your own percentage rating you may compare this with the bookmaker odds percentage to establish where the value lies. The way you study the probability of each outcome is not due to this article. It deserves more comprehensive treatment than can be given here where we have been dealing with bookmakers' margins and value bets.
Assuming that the true reflection of the chances on the aforementioned match were home win 20% (bookmaker 1 had that about right and bookmaker 2 was under priced), a 20% chance of a draw (although these were the bookmakers offering the best odds on the draw they were still under priced) and also a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should be given to an away win bet with bookmaker 2.
Stake allocation
There may be occasions when it truly is necessary to allocate your stake between different outcomes. This could be the situation where a selection of bookmakers odds produce an under round opportunity or where there is a strong reason to include 2 of the 3 possible outcomes so it's essential to allocate the stake between them. Within the illustration below the odds happen to be exaggerated. It's very seldom in reality that an under round opportunity arises however the illustration is a great one to show how exactly to use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the top odds. All you will need do is compare them. Identifying value is yet another matter. For this you need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the chances of each outcome. By comparing the available percentages with your assessment you may identify where the value lies and make your selections accordingly - and possibly now and again identify a no lose position where a selection of the odds provided by the various bookmakers produce an under round position! Disciplined usage of percentages should form a major part of your strategy in identifying value in the odds offered and leading to your betting profits.
A perfectly "balanced book" where the odds offered exactly reflect the possibility of each team winning or the draw would produce an overall total of 100.00%. Theoretically the bookmaker will profit by the total percentage on the match less 100.00%. In the above table bookmaker 1 should profit by 11.89% of turnover on the match and bookmaker 2 by 11.23%. At first sight there will not seem to be much between them but whenever we compare the theoretical profit of each the margin on the bookmaker 1 odds (i.e. 111.89 - 100.00 = 11.89%) is 5.84% higher than the 11.23% margin on the bookmaker 2 odds! Where the odds on offer produce a theoretical profit for the bookmaker the book is said to be "over round". The bookmaker 1 book is over round by 11.89% and the bookmaker 2 book by 11.23%.
Where the odds on offer total less than 100.00%, which never actually occurs with the odds provided by anyone bookmaker as they'd in theory make sure to lose on the event, they are "under round" . The losing percentage could be 100.00% less the total odds percentage. Not surprisingly this will not happen. Individual bookmakers do not offer odds on the possible outcomes that would give them a loss. What does happen, although very infrequently, is that the odds provided by a selection of bookmakers may differ to the extent that one can find a combination where those for the 3 possible outcomes are under round. Therefore you may bet on all three possibilities - win, lose and draw - and provided you allocate your total stake within the correct proportion you will make a profit of the percentage by that you just can bet at under round odds.
Identifying value
From the above data it's pretty obvious that the 4 - 1 offered by bookmaker 1 in respect of the home team winning is the best price, there's no difference within the odds offered for the draw but bookmaker 2 offers the top odds for the away win. The question then arises, which is the greatest value? Obviously the 20.00% provided by bookmaker 1 on the home win will be the lowest percentage so could be the top value, but this is too simplistic. There has to be a yardstick to measure the odds against. That is your own assessment or your advised assessment of the chance of each outcome. If you give each possibility your own percentage rating you may compare this with the bookmaker odds percentage to establish where the value lies. The way you study the probability of each outcome is not due to this article. It deserves more comprehensive treatment than can be given here where we have been dealing with bookmakers' margins and value bets.
Assuming that the true reflection of the chances on the aforementioned match were home win 20% (bookmaker 1 had that about right and bookmaker 2 was under priced), a 20% chance of a draw (although these were the bookmakers offering the best odds on the draw they were still under priced) and also a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should be given to an away win bet with bookmaker 2.
Stake allocation
There may be occasions when it truly is necessary to allocate your stake between different outcomes. This could be the situation where a selection of bookmakers odds produce an under round opportunity or where there is a strong reason to include 2 of the 3 possible outcomes so it's essential to allocate the stake between them. Within the illustration below the odds happen to be exaggerated. It's very seldom in reality that an under round opportunity arises however the illustration is a great one to show how exactly to use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the top odds. All you will need do is compare them. Identifying value is yet another matter. For this you need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the chances of each outcome. By comparing the available percentages with your assessment you may identify where the value lies and make your selections accordingly - and possibly now and again identify a no lose position where a selection of the odds provided by the various bookmakers produce an under round position! Disciplined usage of percentages should form a major part of your strategy in identifying value in the odds offered and leading to your betting profits.