Calculating Your Edge

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Michael5482
Posts: 110
Joined: Fri Jan 14, 2022 8:11 pm

So after honing my Excel skills over the past few months I've completely revamped my football P&L spreadsheet but I think something maybe not quite right. If someone can offer some advice that's be appreciated

I've done the following calculations for each market:

Lay Bets Total - Back Bets Total = Market P&L (I lay then back to hedge)
Market P&L - Commission = Net P&L
Lay Bets Total + Back Bets Total = Market Turnover

Net P&L / Market Turnover * 100 = Edge

Issue I'm having is when I divide my Total Net P&L with my Total Market Turnover for all markets it shows a positive edge of 0.13% but when I sum the edge form each individual market it show's -2.47% but my P&L is positive

Hope that makes sense!
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Derek27
Posts: 18573
Joined: Wed Aug 30, 2017 11:44 am
Location: UK

Michael5482 wrote:
Tue Jan 24, 2023 5:02 pm
So after honing my Excel skills over the past few months I've completely revamped my football P&L spreadsheet but I think something maybe not quite right. If someone can offer some advice that's be appreciated

I've done the following calculations for each market:

Lay Bets Total - Back Bets Total = Market P&L (I lay then back to hedge)
Market P&L - Commission = Net P&L
Lay Bets Total + Back Bets Total = Market Turnover

Net P&L / Market Turnover * 100 = Edge

Issue I'm having is when I divide my Total Net P&L with my Total Market Turnover for all markets it shows a positive edge of 0.13% but when I sum the edge form each individual market it show's -2.47% but my P&L is positive

Hope that makes sense!
Summing the edges for each individual market is erroneous. Only a weighted average would be accurate.

For example, you could make a 3% loss when your turnover was just £10, but a 0.5% profit when your turnover was £1000. (10 * 3 + 1000 * 0.5) / (10 + 1000) = 0.525% approx, but a straight market average would give -1.25%.
Michael5482
Posts: 110
Joined: Fri Jan 14, 2022 8:11 pm

Derek27 wrote:
Tue Jan 24, 2023 5:36 pm
Michael5482 wrote:
Tue Jan 24, 2023 5:02 pm
So after honing my Excel skills over the past few months I've completely revamped my football P&L spreadsheet but I think something maybe not quite right. If someone can offer some advice that's be appreciated

I've done the following calculations for each market:

Lay Bets Total - Back Bets Total = Market P&L (I lay then back to hedge)
Market P&L - Commission = Net P&L
Lay Bets Total + Back Bets Total = Market Turnover

Net P&L / Market Turnover * 100 = Edge

Issue I'm having is when I divide my Total Net P&L with my Total Market Turnover for all markets it shows a positive edge of 0.13% but when I sum the edge form each individual market it show's -2.47% but my P&L is positive

Hope that makes sense!
Summing the edges for each individual market is erroneous. Only a weighted average would be accurate.

For example, you could make a 3% loss when your turnover was just £10, but a 0.5% profit when your turnover was £1000. (10 * 3 + 1000 * 0.5) / (10 + 1000) = 0.525% approx, but a straight market average would give -1.25%.
Yep that makes sense now you've explained it! Appreciate you assistance.
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