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Topic: Variable dutching formula for betting exchange.
Replies: 0

 Bobster Posts: 1 From: London Registered: 3/6/11
Variable dutching formula for betting exchange.
Posted: Mar 6, 2011 9:17 AM

I am trying to work out a formula that is used on this website http://www.chromaweb.com/bets/slider/slider.swf

The formula/website (free) is used for a betting exchange, this is what i come up with but is wrong as this formula doesn't work for all values entered.

Backing= betting on a selection to win

Laying = betting that a selection will lose, ie acting as a bookmaker.

Straight Hedge:

(Stake * Back Odds) / (Lay Odds) = (Lay Stake) = Equal green screen

eg: (£10 * 3.5) / (3.2) = £10.93 = £0.93 Green.

Hedging To A Percentage:

If you want to leave more green on the back then your lay stake would be anywhere between £10-£10.93, depending on what balance you require, to do this first you need to work out the unhedged profit:

Back Odds - Lay Odds = Profit Odds

3.5 - 3.2 = 0.3

Profit Odds * Stake = Unhedged Profit

0.3 * £10 = £3

So if you wanted your back bet winnings to be £1.50 (Required Back Bet Winnings), that would equate to 50% of your unhedged profit.

(£3 / 100) * 50 = £1.50

Required Back Bet Winnings (this figure can't be more than £3 in this example) / Lay Odds - 1

£1.50 / (3.2 - 1)

£1.50 / 2.2 = 0.68

Therefore if you layed £10.68 @ 3.2, your back bet will pay out £1.50 if it wins and £0.68 if it loses.

Hope this makes sense.