Anbell wrote: ↑Thu Jul 09, 2020 4:07 am
Of course, we have to remember that the commission is only on winnings/race, so if you have a successful 'small margin' system that wins 1% POT net of 8% commission, it would still be valuable at 10% commission.
Anbell don't forget that you effectively pay commission on your losses with the winnings that cover them! So if you made a profit of 1 point after 8% commission on total stakes of 100 points and let's say you have a 25% strike rate so you would have enjoyed 25 winning bets at 1 point stakes returning 82.61 gross winnings which net down to 76 points after 8% commission, offset the 75 losing bets gives you a 1 point profit. But if the commission rate was increased to 10% your commission deduction would be 8.26 points giving net winnings of 74.35 points which after deducting the 75 losing stakes gives the system a loss of 0.65 points!
It's a common misunderstanding of the effect of commission when using an exchange. "You only pay commission on your winnings" depends on how you define your winnings! "commission is only on winnings/race" is of course correct but because a long term profit is produced at X% commission does not mean there will still be a profit at a higher Y% rate. Your long term commission is effectively …
total commission = (system profit
+ losing stakes) x Comm%
