When Trading using Value Racing Tips we back the horse with the bookies overnight, ideally using Best Odds Guaranteed Bookies, then Lay the horse the following day on the Exchanges.
It is very low risk and you are never likely to lose your full stake if you follow the guidelines.
Lets take a stake of £50 and an example of horse price of 6/1. Now we have to use decimals due to calculations so 6/1 becomes 7.00. In this first example for ease of explanation let’s assume no commission on Betfair or Betdaq but in reality this varies from 1-5% depending on where and who the trader is.
If the horse wins our back return is £350 (Profit of £300)
Now if the odds drop to 4.00 then by trading we have several options.
Option One – The Free Bet
The first and simplest is by taking a free bet which gives two separate outcomes.
To do this simply lay your stake at the new odds:
Lay the horse for £50 at 4.00
If the horse loses we win £50 at the exchange (stake returned)
If the horse wins we win £300 at bookies but only lose £150 at exchange (Liability is £50 x (4.0 – 1) = £150)
This is all or nothing but is giving us a free bet after all.
Option Two – Guaranteed Income
With this option we look to equalise the outcome, win or lose. This is my preferred method.
A small calculation is required but nothing too strenuous.
Take your back return from the win which will be £350 (Profit £300)
Divide this by the lay odds on the exchange – lets still use 4.00
This gives us £350 / 4.00 = £87.50
Lay the horse for £87.50 at 4.00
Now we have two potential outcomes…
Horse Wins = £37.50 Profit
Profit at Bookie = £300
Loss at Exchange = £262.50, calculated as £87.50 x (4.00 – 1)
Horse Loses -£37.50 Profit
Lose at Bookies = £-50, Gain at Exchange = £87.50
We have essentially hedged our position and taken advantage of the odds drop.
KEY TRADING HINTS AND TIPS
Firstly most important our aim is PROFIT no matter how big or small.
Secondly, take the odds as early as you can once you have the selections.