Eye Watering
I’ve been playing around with spreadsheets and a number of other strategies recently. With the increase in commission charges levied against me, I figured it would make sense to look outside my normal activity. While it’s flattering to know you are better than 99.9% of market participants have ever been, it’s less flattering to give away the majority of your profit! By ‘normal activity’ I am talking ‘active’ participation. I now have a very big incentive to find less manual ways of participating in the market.
One area I have been re-examining is that of value. The reason I am examining this area is that the market on Betfair is remarkable efficient now. In fact it is too efficient, I’m struggling to see how layers can make anything at some of the prices on offer! You can often get a pretty competitive big field handicap where the outcome on the race is very uncertain, yet the market is priced very close to 100% for a lot of the time. At this level, due to the variability in returns and more normal commission rates, I think it’s possible to overturn the margin lost to the other side of the book. This is actually what brought me to exchanges in the first place.
So I blundered in last week with a neat idea that would probably overturn this negligible percentage. I got lucky as, to my surprise, I managed to not only overturn that small percentage but pick a LOT of winners. This was unfortunate as you expect this now and again with a value strategy, not just right at the start. This is the second time this has happened to me.
The net upshot is that I now find myself back at square one. Because of the higher rate commission paid, I have to take a theoretical eye watering massive loss on these positions. I could wait for things to even out, but I am not sure that I can overcome the difference between normal commission and the super premium charge. I have quickly shuffled this strategy off to Betdaq. I tried this on Betfair because I though generating commission would help lower my charges. But when you look at the detail it seems you actually need to win and lose a huge amount of money to stand any chance of paying much lower commission. So much, it looks impossible to me.
I could be wrong, if any body has done the maths, please send me a spreadsheet!
