The Virtual Grand National
For the Virtual Grand National you can see quite a big overround built into the win price (144% - fair is 100%), the overround on the place is not as big proportionally speaking (595% - fair is 500%). Will this give us an opportunity to find value in the each way market? First we have to decide how we believe the places are decided. For the win it is the consensus that the prices are fair. A simulation/algorithm based on the horses form and strengths will determine the probability of each horse winning. The prices will then directly represent this probability with a bit of margin built in. This works. For placing it is a bit more complicated. You can't have both a realistic simulation to generate the places probablities/prices and each way prices that represent the actual place price. Here is how the racingpost describes the simulation: The simulation itself is made up of mathematical algorithms using data taken from the horses' previou...