How to identify value within your bets? That is the big question. My friend, Alex Napier who operates the most effective Bet Soccer website, has asked me to write this article to describe how bookmakers' percentages are calculated and just how they supply a guide to assessment of value in the odds on offer. He has asked me to look-at online soccer agent 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 chance 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 does not appear to be much between them but as 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 also 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'd in theory be certain to lose on the event, they may be "under round" . The losing percentage will be 100.00% less the total odds percentage. Not surprisingly this doesn't happen. Individual bookmakers do not offer odds on the possible outcomes that could provide them with a loss. What does happen, although very infrequently, is the fact that the odds offered by a selection of bookmakers can vary to the extent you can 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 within the correct proportion you is likely to make a profit of the percentage by that you can bet at under round odds.
Identifying value
From the aforementioned 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 isn't any difference in the odds offered for the draw but bookmaker 2 offers the most effective 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 might be the very best value, but this is too simplistic. There must be a yardstick to measure the odds against. Which is your own assessment or your advised assessment of the opportunity 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 evaluate the probability of each outcome just isn't due to this article. It deserves more detailed treatment than can be given here where we are working with bookmakers' margins and value bets.
Assuming that the true reflection of the chances on the above 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 get 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 could be the case where a selection of bookmakers odds produce an under round opportunity or where there's 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 have been exaggerated. It is quite seldom in reality that an under round opportunity arises though the illustration is an excellent one to show the best way to use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the most effective odds. All you may need do is compare them. Identifying value is yet another matter. Due to this you may need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the prospects of each outcome. By comparing the available percentages with your assessment you can identify where the value lies and make your selections accordingly - and perhaps 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 utilization 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 chance 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 does not appear to be much between them but as 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 also 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'd in theory be certain to lose on the event, they may be "under round" . The losing percentage will be 100.00% less the total odds percentage. Not surprisingly this doesn't happen. Individual bookmakers do not offer odds on the possible outcomes that could provide them with a loss. What does happen, although very infrequently, is the fact that the odds offered by a selection of bookmakers can vary to the extent you can 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 within the correct proportion you is likely to make a profit of the percentage by that you can bet at under round odds.
Identifying value
From the aforementioned 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 isn't any difference in the odds offered for the draw but bookmaker 2 offers the most effective 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 might be the very best value, but this is too simplistic. There must be a yardstick to measure the odds against. Which is your own assessment or your advised assessment of the opportunity 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 evaluate the probability of each outcome just isn't due to this article. It deserves more detailed treatment than can be given here where we are working with bookmakers' margins and value bets.
Assuming that the true reflection of the chances on the above 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 get 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 could be the case where a selection of bookmakers odds produce an under round opportunity or where there's 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 have been exaggerated. It is quite seldom in reality that an under round opportunity arises though the illustration is an excellent one to show the best way to use percentages.
It is generally obvious which bookmaker is or bookmakers are offering the most effective odds. All you may need do is compare them. Identifying value is yet another matter. Due to this you may need to calculate the odds percentages to compare with your own, or your advised, perception or assessment of the prospects of each outcome. By comparing the available percentages with your assessment you can identify where the value lies and make your selections accordingly - and perhaps 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 utilization of percentages should form a major part of your strategy in identifying value in the odds offered and leading to your betting profits.