Best odds: The importance of price

You might have heard the punting mantra “it’s all about price”. Assuming you have a profitable set of tips and sound bank management, getting the best odds available is one of the most important factors you can focus on. And while we all know that $2.20 is better than $2, something most punters don’t realise is just how much of a difference getting the best odds actually makes to their bottom line.

In some cases, getting the best odds is the difference between winning and losing.

So using that example… how much better value do you receive when you back a horse at $2.20, instead of $2.00?

Profit on Turnover: What’s the expected PoT on this bet?

The formula to work out the overs you receive on a bet is:

Overs = (Price Received – Rated Price) / Rated Price

For example, if a horse is rated a $2 chance and you receive $2.20 as your price, your overs are calculated as follows:

Overs = (Price Received – Rated Price) / Rated Price

Overs = ($2.20 – $2) / $2

Overs = $0.20 / $2

Overs = 10.0% Profit on turnover (PoT)

What’s the expected PoT at the best odds?

The above formula is certainly useful and one I use all the time. However, a more interesting formula is a formula I derived recently that tells you the new PoT you receive when you back a tip at the best odds. So let’s look at it:

N = B [ ( O + 1 ) / T ] – 1

where

N = New PoT

B = Better price

O = Old PoT

T = Tipped price

That’s complicated, but let me run you through an example. Let’s say you receive a tip @ $3 from a pro who has a 10% PoT. record. You’re lucky enough to back it at $3.20. What is the new PoT you have now received?

N = B [ ( O + 1 ) / T ] – 1

N = $3.20 x [ ( 0.10 + 1 ) / $3.00 ] – 1

N = $3.20 x [ ( 1.10 ) / $3.00 ] – 1

N = $3.20 x 0.3666 – 1

N = 1.1733 – 1

N = 17.33% PoT

For a measly $0.20 difference in price, you’ve increased the punter’s PoT from 10% to 17.3%. That’s a massive difference.

We tend to see the difference between $3.20 and $3.00 as minimal, because $0.20 is a small amount relative to $3.00 (just 6.6%). However, as punters, the key is profit. When you consider the breakeven price is $2.72 and $3 is the price at which you will make 10% PoT, then $3.20 is a significant jump.

20 cents is pocket change in daily life. When it comes to the punt, small differences in price can have a significant effect on your bottom line.

Click here to find out more about the effect that marginal changes in price can have on your bottom line.