Arguably, the biggest revolution developed by the arrival of Betfair’s betting exchange was the ability for punters to trade.
Trading, for the inexperienced, is where a punter backs a horse at high odds, before later laying the same horse at lower odds, or vice versa, in order to guarantee a profit.
For example, you have $10 on a soft-ground specialist in the ante-post markets for a big race at 20.00. After a few days of persistent rain, the horse’s odds shorten to 10.00. You lay the same horse for $20.
If the horse wins, you pick up $190 profit on your back bet, but pay out $180 on your lay bet, for an overall profit of $10. If the horse loses, you lose your $10 back stake, but win the $20 you laid, again for a $10 overall profit. It’s the betting world’s version of merchants’ attempts to buy-low and sell-high.
Horse Trading Strategies
One strategy used by successful traders is to focus on only a few horses in any race and, more often than not, on just one. Short-priced favourites are especially popular because the majority of punting activity on the race will be solely back and lay bets on that one horse, to the virtual exclusion of other runners, which creates the small movements in odds that traders can profit from.
Another strategy these traders use is to look at how much money is “queuing up” to back or lay a particular horse. If a significant weight of money appears on the back side of the market, the odds can often shorten, whereas if a lot of punters are out to lay a horse, its odds will likely lengthen.
Information is key when assessing your trade opportunities. In much the same way that day traders will carefully monitor market reports, company results and world media – for any news that may affect the markets – the best Betfair traders will be listening and watching carefully for weather reports, jockey interviews and stable form: any of which may spark a movement in a horse’s odds.
Trading Small Price Movements
The changes in odds don’t need to be as significant as in the example above to make a profit, though. Some punters are able to make profits by trading on the smaller price movements that occur before any race.
If a horse trades at 2.10, then shortens to 2.04, then back to 2.08, before settling at 2.02 before the off, a punter is able to make a series of smaller bets that guarantee a profit, in much the same way that a financial market trader might speculate on market movements within a single day.
The challenge, of course, is in being able to accurately predict those market movements: if you lay a horse at 1.80 in the expectation of its odds lengthening, you can find yourself in trouble when it gets backed into 1.50.
Mitigating Risk & In-Play Benefits
Trading is not risk free, but for some punters – those who are prepared to put the time in – it does represent a less volatile way of betting.
That’s not to say that trading is only for those who are prepared to sit at their computers all day, buying and selling in each and every race for a $20 profit.
Even if that style of betting does not suit you, trading can still be a useful strategy to combine with in-play punting. If you know that a horse can race unenthusiastically, but can often find their stride in the final 400 metres, you might be able to lay the horse pre-race at shorter odds, before placing an in-play back at greater odds, which will be duly matched when the horse looks to be struggling in the early stages.
Conversely, if you know a horse can often race impressively, but finds little under pressure, a back pre-race can be laid in-play at much shorter odds when the horse appears to be cruising.
Getting Started Trading
As with any new betting strategy, the best advice is to “paper-trade” for a couple of weeks first. Make a note of bets you want to make and see – at the end of the trial period – whether you would have been profitable. And even if this period is successful, keep stakes to a bare minimum for a few weeks thereafter.
Only when you’ve demonstrated your profitability over a sustained period should you consider trading with a larger percentage of your betting bank.
Trading with Advanced Software
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