In Parts One and Two I've looked at making sure you have a sound reliable form assessment to work from-preferably your own but if not using a sound ratings service with a proven track record,the vital importance of money management,why you need trading software and a first class odds comparison site to accompany it and how using "leverage" can help boost your profit margins.
Before looking at how to approach getting into and out of any market let's look at what you can expect to achieve if you are a very good operator.As I mentioned earlier laying won't get you rich quickly but it does grow very steady consistent profits if you can learn to do it well.
Let's assume you start with a 10,000 unit bank.I suggest a 3% liability each "lay'bet.To simplify I'll assume 100 lays at odds of 4.0-3/1if your using fractional odds.Your analysis suggests that these runners really are true 5.0 -4/1 chances.A sample size of 100 is most likely going to be subject to variance either in your favour or against you but over time it will work out if you analysis and ratings are sound.
100 lays at 4.0 to win you 100 units if it loses and to cost you 300 units if it wins.
If it's "true' odds are 5.0 4/1 then you should be collecting in 80% of the races and losing in the other 20%.
80 x 100 8000 Profit from beaten runners
minus 520 Betfair commission at 6.5% on winnings (at the maximum rate-most pay less)
minus 6000 Losses from winning runners
Profit 1480 units
Finding those differentials between your rated odds and bookies early quotes is common but getting a lay bet matched on Betfair is much harder.The closer you get to the off the easier it is to get matched but by then the differential may have gone and the price may be the same as your analysis suggests it should be or bigger.
The better the quality of the racing the earlier markets develop and acquire liquidity.Bookies start betting on Saturday racing late on Wednesday.They use "risk management" software that quickly highlights if something is too high.If you want a $1000 on a 17.0 chance on Wednesday evening you'll be lucky to get set for much more than $100 unless the computer has you listed as an habitual "mug" punter.The amount anyone marked as "sharp" can get on is limited but by allowing you a morsel or two they quickly get a handle on any obvious errors in the initial pricing.These early markets usually have a massive vigourish (overound) and your playing before you know the final field,track conditions etc.Those all all real negatives to be aware of if you are a backer but they can work positively for you if you are laying and prepared to get in early and can manage to get matched.
The reality is that if you are going to profit as a layer you'll do best generally but not always (sorry, but it is gambling) by getting matched early and gradually as the market develops and by using leverage to take advantage of an initial discrepancy as the price trades north.
If you are relying on ratings done by an agency then your only likely to have those figures on busy days and not until around an hour before the first race.By then bookies have been betting for day's if it's a Saturday or Carnival card or all morning if it's midweek metro or a decent provincial meeting.
If you are doing the analysis for a Monday meeting at Donald and you are good at it you'll find some huge discrepancies but no real money around early to take advantage of them.In a nutshell better racing will have plenty of money around to get matched but the percentage differential will be generally much smaller as the market is much more developed and as a consequence less volatile.Conversely with country racing you can get matched at much bigger differentials but generally only for small money and the potential for volatility is much greater.
If your going to use "leverage" then you have to understand how badly the market can bite you if you allow it too.If your analysis is good then in most cases the market will begin to develop roughly around your expectations but often with quite notable individual exceptions.Sometimes, however "good" you are it will emphatically disagree with you.If you leverage too much and the market turns against you then you risk being left with no alternative but to take a loss irrespective of what happens in the race.There is nothing quite so frustrating as having overdone the leverage and had to abort with a loss only to see the runner get trounced and a nice potential profit lost and real loss a hard reality.
When you are trying to lay a runner the most important thing is to get your initial liability matched as economically as possible.I don't really like to show my hand first by offering anything as usually someone or some automated thing will automatically offer a bit better for much smaller.I prefer to let it come to me-wait for someone to ask for it and if it's in your target range take it or some of it.Pay very close attention to what the bookies and the totes are offering.If you are going into a market early you'll have to trade at a premium to them to get matched but don't go silly.You have to strike a balance between getting matched but doing so without giving away any more than you need too.Remember there is some serious competition out there and if everyone is desperate to "get" the same runner then the Betfair price can go very silly very quickly.Don't get sucked in to the chase-let it go.I work having one monitor showing the Dynamic Odds screen with what's on offer elsewhere and another with just the trading software running and I'm constantly aware of the premium you have to trade at on Betfair compared to the opposition.As you get closer to the off time that premium will gradually erode particularly, at the sharp end of the market and anything that firms up late will generally be the same on Betfair as the bookies in the last 90 seconds or so.Consequently sometimes a lay opportunity presents itself very late in betting as backers flock like lemmings to get on the "market mover" which is now ridiculously overbet and is often layable on Betfair a tick or so shorter than with the bookies.This seems to be an increasing occurrence of late and if you have reliable figures that you are operating from don't be afraid to take advantage of opportunities late that you didn't actually expect from early quotes.For example if you priced a runner at 2.50 and it opens around that mark and is crunched late into 2.0 then there is a hefty differential to your assessment.You'll need to exercise some real judgement in these circumstances though as the reality is generally the margins are likely to be much tighter than your initial figures suggest and there is no leverage opportunity so late in the piece.
With early markets posted on virtually all Australian racing now by the major bookies you should have a fair idea of where your possible lay opportunities are likely to be.Before attempting to get matched initially makes sure that there is a decent differential between the price you are laying at and your own rated price.In the example at the top I used 4.0 chances that your own ratings suggested should be 5.0.That's a big enough "spread" to make it worthwhile getting matched early but you wouldn't really want to offer 4.60/4.70 as the differential to your own rating is too small.The point at which you enter the market is crucial to your long term success.It simply isn't worth exposing yourself to the risk of the market moving against you unless you feel you are striking a sound bargain initially.If I had a runner rated 11.0 then I'd generally be happy to get involved around 8.50 or less but not at 9.50.One I rated 3.50 I'd take on at 2.90 or less but not at 3.20.As the market develops you may decide that you're happy to take on a genuine 5.0 chance at 4.50 close to the off but generally I like to be in early and feel that I've layed it at decent "unders".
Once you have got matched for your full liability you can then monitor the market and if you feel the runner will start to move closer too your rated price you can lay it for a bit more with a view to trading it out at a better price.Say you've got 100 units matched at 4.0 that's you 300 unit liability taken care off.Then lay the runner in smaller increments (20/30 units) and try to trade these back a tick or two higher -lay at 4.0 and back at 4.20.You may be able to do a few of these smaller trades as the price slowly moves north but you MUST keep your additional exposure low by offloading at a modest profit all the time.If you keep you exposure low you can still maybe trade an extra 100% or more of your initial lay bet.This will bring the actual price off your lay down from 4.0 to considerably less say 3.40.As you do more of these you will get a feel for the market and will become more skillful at managing your exposure and getting your counter trades in.Sometimes the price will keep heading north and the profits you have made from the trades are such that it's sometimes crazy not not just cash it all in at the inflated price and eliminate the risk and take the profits.
Momentum is a huge factor on Betfair and if runner begins to drift the overreaction can be massive.Conversely, if one starts to firm then all the layers and traders vanish and there is no money on the lay side.This is why you exposure has to be kept small so if it moves against you it's not destroying all your value in the initial lay.If you try to leverage by having another 20 units at 4.0 and the price firms to 3.70 then get out of the trade and accept the modest loss.In that scenario forget about leverage with this runner even if it gets back to 4.0 leave it and stay just with the original lay which will now be marginally less attractive as you will have negatively leveraged the price a tad from the original 4.0 to 4.15/4.20 but still well within your target range.
The important thing to remember is that you are operating as a LAYER but using trading techniques to try to improve your margins.
When you are operating in a market it is essential that you are constantly aware of what is happening to the runners at the head of the market.If you have layed the favourite and it's weak in betting then great but if you have layed the second favourite and the favourite is weak your probably in trouble.If you think the situation is moving against you and there are factors in play which are making your analysis look flakey don't be shy to bail out at a modest loss.This is a particularly important point to understand if you are getting involved in races on the country tracks where there can be massive negatives attached to a runner that only some people are aware of.These factors can make any early analysis virtually useless and if it starts to smell fishy get out.Experience and judgement count for a lot in these circumstances and unfortunately no one can get experience from a teaching manual.
It's taken me longer to write this article in three parts then I originally anticipated and I still feel that there are things I could add to it.
I hope it's been informative and helpful to some of you.Throughout the year I'll keep adding a bit more in depth stuff on some particular aspects so they build on the original article.
Thanks for reading.
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