A couple of people have mentioned that they do this now, and I wondered what types of strategies are used. I assume some people just work out what the implied probability is from the odds and compare this with the historical data - this, for me, sounds like a bad idea.
I was watching the national a while ago (whenever it was), and something of a lightbulb went off. I would like some feedback from anyone who can be arsed:
When you bet on a horse to win, your bet could be be described a vertical spread where the two strikes are infinitesimally close... (bear with me!)
Now, when you go to the races, the bookies are making markets in these vertical spreads, and the prices change. If we assume that all the bookies have identical information, they should all offer equal prices if the stastical liklihood of winning is a factor - it doesn't, it's a risk-neutral arrangement.
The bookies offer different (but similar) prices. Of course, the price the bookies offer does not represent the odds of whichever horse winning, but the size of the liabilities that the bookie has on that particular outcome - the bookie wants to secure his 107% (or whatever), which you can basically consider his spread for making a market. He doesn't bet on the race, he has no edge there - he bets on the size of bets he is going to get (?).
Now - here comes the interesting part; Would it not be possible to front run "retail betting flow"? Lets say the market for a particular race opens 2 hrs before the event... the prices at the open should differ from the prices 10 mins befre the race, because the "retail" crowd will:
i) only care about the next race on the card, then come 1hr 50mins later...
"Weighed in, Weighed in"...
ii) bet on the horse that Franki Dettori is riding
iii) bet on the 200-1 shot with a cool-sounding name
all while sinking the plonk w/ hot pork+apple sauce rolls.
... comments welcomed.
I was watching the national a while ago (whenever it was), and something of a lightbulb went off. I would like some feedback from anyone who can be arsed:
When you bet on a horse to win, your bet could be be described a vertical spread where the two strikes are infinitesimally close... (bear with me!)
Now, when you go to the races, the bookies are making markets in these vertical spreads, and the prices change. If we assume that all the bookies have identical information, they should all offer equal prices if the stastical liklihood of winning is a factor - it doesn't, it's a risk-neutral arrangement.
The bookies offer different (but similar) prices. Of course, the price the bookies offer does not represent the odds of whichever horse winning, but the size of the liabilities that the bookie has on that particular outcome - the bookie wants to secure his 107% (or whatever), which you can basically consider his spread for making a market. He doesn't bet on the race, he has no edge there - he bets on the size of bets he is going to get (?).
Now - here comes the interesting part; Would it not be possible to front run "retail betting flow"? Lets say the market for a particular race opens 2 hrs before the event... the prices at the open should differ from the prices 10 mins befre the race, because the "retail" crowd will:
i) only care about the next race on the card, then come 1hr 50mins later...
"Weighed in, Weighed in"...
ii) bet on the horse that Franki Dettori is riding
iii) bet on the 200-1 shot with a cool-sounding name
all while sinking the plonk w/ hot pork+apple sauce rolls.
... comments welcomed.
