How Exactly To identify value in your bets? That's the big question. my homepage friend, Alex Napier who operates the best Bet Soccer website, has asked me to write this article to explain how bookmakers' percentages are calculated and just how they provide a guide to assessment of value within the odds on offer. He has asked me to look at soccer betting, where, as a result 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 opportunity of each team winning or the draw would produce an overall of 100.00%. Theoretically the bookmaker will profit through the total percentage on the match less 100.00%. Within 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 doesn't appear to be much between them but once 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 offered by any person bookmaker as they would in theory be certain to lose on the event, they're "under round" . The losing percentage would be 100.00% less the total odds percentage. Not surprisingly this doesn't happen. Individual bookmakers don't offer odds on the possible outcomes that could provide them with a loss. What does happen, although very infrequently, is that the odds offered by a selection of bookmakers may differ to the extent that you could find a combination where those for the 3 possible outcomes are under round. Consequently you can bet on all three possibilities - win, lose and draw - and provided you allocate your total stake in the correct proportion you is likely to make a profit of the percentage by that you just can bet at under round odds.
Identifying value
From the above mentioned data it's fairly obvious that the 4 - 1 offered by bookmaker 1 in respect of the home team winning is the greatest price, there's absolutely no difference within the odds offered for the draw but bookmaker 2 offers the best odds for the away win. The question then arises, which is the best value? Obviously the 20.00% provided by bookmaker 1 on the home win is the lowest percentage so could be the best value, but this really is too simplistic. There has to be a yardstick to measure the odds against. That's 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. How you study the probability of each outcome is just not for this article. It deserves more complete treatment than may be given here where we are working 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 very best odds on the draw they were still under priced) and a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should receive to an away win bet with bookmaker 2.
Stake allocation
There may be occasions when it is necessary to allocate your stake between different outcomes. This might 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. In the illustration below the odds happen to be exaggerated. It's very seldom in reality that an under round opportunity arises but the illustration is a good one to show just how to use percentages.
It's generally obvious which bookmaker is or bookmakers are offering the most effective odds. All you will need do is compare them. Identifying value is yet another matter. Because of 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 can identify where the value lies and make your selections accordingly - as well as perhaps now and again identify a no lose position where a selection of the odds offered by the different bookmakers produce an under round position! Disciplined usage of percentages should form a serious 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 opportunity of each team winning or the draw would produce an overall of 100.00%. Theoretically the bookmaker will profit through the total percentage on the match less 100.00%. Within 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 doesn't appear to be much between them but once 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 offered by any person bookmaker as they would in theory be certain to lose on the event, they're "under round" . The losing percentage would be 100.00% less the total odds percentage. Not surprisingly this doesn't happen. Individual bookmakers don't offer odds on the possible outcomes that could provide them with a loss. What does happen, although very infrequently, is that the odds offered by a selection of bookmakers may differ to the extent that you could find a combination where those for the 3 possible outcomes are under round. Consequently you can bet on all three possibilities - win, lose and draw - and provided you allocate your total stake in the correct proportion you is likely to make a profit of the percentage by that you just can bet at under round odds.
Identifying value
From the above mentioned data it's fairly obvious that the 4 - 1 offered by bookmaker 1 in respect of the home team winning is the greatest price, there's absolutely no difference within the odds offered for the draw but bookmaker 2 offers the best odds for the away win. The question then arises, which is the best value? Obviously the 20.00% provided by bookmaker 1 on the home win is the lowest percentage so could be the best value, but this really is too simplistic. There has to be a yardstick to measure the odds against. That's 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. How you study the probability of each outcome is just not for this article. It deserves more complete treatment than may be given here where we are working 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 very best odds on the draw they were still under priced) and a 60% chance of an away win (where bookmaker 2 quotes a price that gives a lower percentage chance so offers value) consideration should receive to an away win bet with bookmaker 2.
Stake allocation
There may be occasions when it is necessary to allocate your stake between different outcomes. This might 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. In the illustration below the odds happen to be exaggerated. It's very seldom in reality that an under round opportunity arises but the illustration is a good one to show just how to use percentages.
It's generally obvious which bookmaker is or bookmakers are offering the most effective odds. All you will need do is compare them. Identifying value is yet another matter. Because of 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 can identify where the value lies and make your selections accordingly - as well as perhaps now and again identify a no lose position where a selection of the odds offered by the different bookmakers produce an under round position! Disciplined usage of percentages should form a serious part of your strategy in identifying value in the odds offered and leading to your betting profits.