Odds Wizard vs Betfair

[Alex]

Understanding basics of betting exchanges as well as best use of Odds Wizard for the bettors of Betfair is still a highly demanded topic in this forum. I would like to clarify some basic issues that Odds Wizard users must be awared of.

Designations:

F - fair odds computed by Odds Wizard (when profit margin setting is zero);
B - backing odds offered by Betfair, or proposed by bettor;
L - laying odds offered by Betfair, or proposed by bettor.

1. Backing odds
Backing odds is actually normal betting against some offered odds B, or proposal of own appropriate value of B.
Net profit margin per elementary bet when backing odds in the long run is

Pm = (B/F-1)*100%

There must be B > F to have a profit when backing odds.

To have all odds displayed by OW suitable for backing proposals, user must set an option Profit margin in the negative range -10..-50%. The higher absolute value, the greater profit can be expected, and less chances of that someone will match such proposal.

Backing odds amounts are subject to the normal Stake Wizard optimization.

2. Laying odds
Laying odds is acting as a bookmaker with the odds L.
Net profit margin per elementary bet when laying odds in the long run is

Pm = (1 - L/F)*100%

There must be L < F to have a profit when laying odds.

Similarly, to have all odds displayed by OW suitable for laying proposals, user must set an option Profit margin in the positive range +10..+50%. The higher absolute value, the greater profit can be expected, and less chances of that someone will match such proposal.

Laid odds L can be represented as the 'normal' odds with the following simple transformations of fair odds F, stake S, and odds L:

F' = 1/(1-1/F)
S' = (L-1)*S
B' = L/(L-1)

The pair B' > F' now can be used as an input for Stake Wizard bet optimizer. Afterwards, optimal stake value S' shoud be converted back to S = S'/(L-1).