In my previous blog post I mentioned the care needed when doing research to Betfair SP. This was courtesy of an alert by an observant member of the SmarterSig email forum.
Today I will demonstrate just how much difference this anomaly can make. At the moment I am tracking a betting method based on a combination of racing selection strategy and financial trading methods. At first glance the option of betting to BFSP seemed more attractive than taking a price provided you can find some sort of stake threshold by which you do not cannabalise your own BFSP with the size of your stake.
Using the odds displayed when you download your betting summary to calculate a level stake PL to BFSP I get the following results when comparing backing the selections to available price compared to BFSP.
Available price, Bets = 1717 PL = +27.3 points after comm
SP Price, Bets 1717 PL = +35.2 points after comm
A small increase using BFSP
Of course things are never that simple and the prices handed to me via the Betfair download do not account for R4’s. Now taking the the profit by calculating the winnings divided by the bet stake we get the following profit for the two categories
Available price Bets 1717 PL -3.04 points after comm
Bets 1717 PL = +22.1 points after comm
The profit from then live prices simply has not survived the R4’s occurred during the time from taking the bets in the last few minutes to off time. The BFSP’s however will have fewer R4’s, perhaps only being affected by markets that have not reformed perhaps due to a stall non entry. There was a 0.7% drop in ROI when the R4’s on BFSP were accounted for.
Conclusion – You need to make sure when calculating points profit on bet summaries that you use the profit divided by stake and not the price to calculate. Also when assessing new strategies retrospectively to BFSP you need to account for late R4’s. A reduction of 1% on ROI would seem prudent.