text: # Profitability math
  
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   Author Topic: Profitability math  (Read 1989 times)
  aperr
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  Posts: 3
  
  « on: June 09, 2014, 06:01:19 PM »
  
  Hi,
  
  can someone help me with calculating the profitability of surebet between betting exchange only?
  I am looking for a way to calculate for profitability from odds only.
  
  I will use an example:
  
  Commission on both sides is 5%
  o1 (odd1) :1,5
  o2 (odd2) : 3,5
  s1 (stake1) : € 160,17
  s2 (stake2): € 70,00
  Profit: € 6,08
  Profitability = Profit/(s1+s2) = 6,08 / 213,17 = 2,64%
  
  Now, if I try to do the math from the odds only, here is what I would do (but it is not working):
  
  Profitability = 1 - [1/(1+(1-5%)*(o1-1))] - [1/(1+(1-5%)*(o2-1))]= 2,57%
  
  Can someone tell me where I am doing a mistake?
  Best
  aperr
   « Last Edit: June 09, 2014, 06:17:46 PM by aperr » Logged
  Arbusers
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  « Reply #1 on: June 09, 2014, 06:13:39 PM »
  
  What is o1, o2, s1, s2?
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  aperr
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  « Reply #2 on: June 09, 2014, 06:18:20 PM »
  
  can you show me the formula?
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  qbet
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  Karma: 38
  Posts: 371
  
  « Reply #3 on: June 09, 2014, 07:46:25 PM »
  
  You formula is not correct. You also need to divide by the amount invested in order to get the arb percentage. Your formula reads as 1 - x where x is the amount invested in order to win 1. (without the stakes). 1 -x is just the profit. For percentage the correct one is  (1-x)/x.
  
  (Use 0.05 instead and multiply by 100 in the end to get the %. )
   « Last Edit: June 09, 2014, 07:50:52 PM by qbet » Logged
  ppintaluba
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  Karma: 34
  Posts: 623
  
  « Reply #4 on: June 09, 2014, 08:48:26 PM »
  
  Hi,
  
  can someone help me with calculating the profitability of surebet between betting exchange only?
  I am looking for a way to calculate for profitability from odds only.
  
  I will use an example:
  
  Commission on both sides is 5%
  o1 (odd1) :1,5
  o2 (odd2) : 3,5
  s1 (stake1) : € 160,17
  s2 (stake2): € 70,00
  Profit: € 6,08
  Profitability = Profit/(s1+s2) = 6,08 / 213,17 = 2,64%
  
  Now, if I try to do the math from the odds only, here is what I would do (but it is not working):
  
  Profitability = 1 - [1/(1+(1-5%)*(o1-1))] - [1/(1+(1-5%)*(o2-1))]= 2,57%
  
  Can someone tell me where I am doing a mistake?
  Best
  aperr
  
  Profit calculation without considering stake:
  
  o1 = 1.5
  o2 = 3.5
  comm = 5%
  
  You must adjust odds (with commission):
  o1.1 = 1+(o1-1)*(1-comm) = 1+(1.5-1)*(0.95) = 1+(0.5*0.95) = 1+0.475 = 1.475
  o2.1 = 1+(o2-1)*(1-comm) = 1+(3.5-1)*(0.95) = 1+(2.5*0.95) = 1+2.375 = 3.375
  Then sum 1/o1.1 + 1/o2.1 = 1/1.475 + 1/3.375 = 0.9743 = P (less than 1 means arbitrage)
  Your profit is (1-P)/P = (1-0.9743)/0.9743 = 0.026378 = 2.6378%
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  aperr
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  « Reply #5 on: June 10, 2014, 02:13:36 PM »
  
  What if Matchboook is involved?
  
  Let's say:
  
  comm betfair 5%
  o1 (odd betfair) :2,4
  s1: € 70
  
  comm matchbook 1%
  o2 (odd matchbook) : 2,1
  s2 (stake2): € 77,7
  
  Profit= € 14,62
  Profitability = 14,62 / (77,7+70) = 9,9%
  
  How do I calculate the profitability from odds only?
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  qbet
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  Posts: 371
  
  « Reply #6 on: June 10, 2014, 04:29:48 PM »
  
  The previous (correct) formula is valid here too but Matchbook's commission in this example is 2%.
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  doncht
  Newbie
  
  Karma: -1
  Posts: 40
  
  « Reply #7 on: June 10, 2014, 08:12:44 PM »
  
  I'd like to see please if there's a working formula for commission set to 5%
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  ppintaluba
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  Karma: 34
  Posts: 623
  
  « Reply #8 on: June 10, 2014, 08:48:16 PM »
  
  I'd like to see please if there's a working formula for commission set to 5%
  
  For matchbook or a normal exchange?
  My previous post has a general formula for any commission (not for matchbook)
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