Effect on WOM of money at 1.01

[mikesalter]

Its quite common for there to be a large sum, say 5-8 k sat at 1.01 on the lay side. How do people calculate the effect of this never to be matched money sitting there and does it mean that the WOM graph is generally biased to show more on the lay side.

[SpikeyBob]

Hi Mike,

As far as I know, the WOM% in BA is only calculated on the three nearest prices on either side of the book, so 1.01 prices would only affect the BA WOM% if you are trading at 1.03 or lower.

Spikey

Edit: Sorry, just to clarify, if there are gaps in the market then any gaps are ignored, though when you are getting to 1.01 there are not normally gaps in prices.

[dan_payne182]

SpikeyBob is spot on, WOM is calculated from the money in the first 3 prices each way, excluding gaps. So you can effectively ignore money placed at low odds such as 1.01

[CaerMyrddin]

I'd just add that you can fine tune the contributionof each of the 3 prices, which is very helpful if you are using a WOM based strategy.