Price Boosts

Price boosts like this can offer opportunities for clever punters to make some cash. There are three method:

Method 1: Guaranteed profit

In this case you take the 6/1 for example available on Atletico and back the max stake of €10. You can then bet against the same horse on the exchange, i.e. lay the horse on the exchange. If you lay €12.17 at 5.8 which was available at the time of the boost (see betfair graph). Then either way if the horse wins or loses you are at least €1.56 up. Either you win at the bookie or you win on the exchange, guaranteed.

Method 2: Long term Profit

So you will notice that your win at the exchange is reduced due to commission, and you will also notice that the price that you lay off on the exchange is somewhat inflated with matched bettors clamouring to lay the boosted odds off for value. They push up the price. If you look at the graph of the history of matched prices on betfair you see a jump from about 4.8 to 6.2. This coincided with the time the boost was announced. When the boost "sold out" the price settled back to the normal odds about 4.8/5.0.  So in fact, with the guaranteed method you are getting very poor value on your lay bet.

We can use the betfair matched price to calculate the probability the horse wins. So now instead of laying off on the exchange we just use the exchange price to estimate the true probability. So you back on the bookie site. And your position is 20% chance you win (1 divided by true decimal odds = 1/5.0 = 20%). The value now becomes 20% chance you are up €60 and 80% chance you are down €10. Works out as .2*60 - .8*10 = €4. 

This is easily the more profitable approach compared to Method 1 (€1.56 vs €4.00). But it requires taking a risk and it requires a big enough bank roll to take some losses.

Method 3: Trade the price

The peak and trough can be predicted. The price will rise when the boost is live and will settle back to normal after the boosted price is sold out at the bookie. This gives you a chance to back high and lay low on the exchange. This time you don't place any bet on the bookie site. Instead you back when it is high (we saw it jump to 6.2, you will be lucky to get this price but imagine you can get 5.8). And then lay low when the price settles back to the true odds. So we can trade out here for say 5.0.

So on the same stake as Method 1 and 2, we back €10@5.8 and lay off for profit at 5.0. This way we can realise a profit of €1.13 minus about 5 commission on betfair. So what? This is less profitable than either Method 1 or 2. But the beauty of this approach is that there is no restriction on your stake, now that we are on the exchange. So ramp the stake up from €10 to €100 and your profit scales to €11.13 minus commission.

There are two major drawbacks with this final method. 1) There is no guarantee that the price will retract, if the bookies pick a horse already drifting then the opportunity to lay off at a lower price later might never materialise. 2) You are dealing in bigger stakes which means bigger risks. The advise is that as soon as you see a trade go wrong then trade out for a small loss and live to trade another day.

Hopefully there appears a germ of an idea here. Let's not get carried away with ourselves. So far we have been able to make money off bookie offers, and maybe it has boosted our confidence. The truth is that making money off the bookie's had nothing to do with our skill and everything to do with the generous offers from the bookies. Be careful not to bring that confidence into the world of betfair trading. Trading is a much harder skill.  I've been watching how the markets react to these boosts for only a short time and not always has it been a clear cut opportunity as presented here. Do the research yourself and best of luck!