40% premium charges and arb

[Derek27]

Dont think I will ever be in that league and dont know if I would want to just about scrape into it.

You become a 40% tax payer, you take all the risk, you dont get any benefits like holiday pay/ sick pay/ pension benefits etc. I know that for some that does not really matter as they are way way up there, but for those that just scrape over its a pretty hefty tax rate?

I know for some its a trade off for lifestyle etc, but you really have to be in the top tier to make it worth the while.

Braced for some feedback............. but I think its something that needs to be considered.

If you're doing okay while paying 20%, the big question when you're nearing 40% is, if you don't want to pay it, what are you going to do instead?

Get a nighttime job stacking shelves in a supermarket. And what do you put on your C.V.?

[Morbius]

Does betting some (or all) of your profits at the end of the week generate more commission but give you the same long term expectancy?

E.g you make £1k in a week and bet it all at evens near SP before PC is taken, statistically every second week you have £0 profit and £0 PC, every other week you have £2k profit and double PC but have generated more commission?

If it did work I suppose the inconvenience of variance would probably outweigh the difference it actually makes

If you're confident you've found a 50% chance even money bet, it might we worth using it to churn commission but it doesn't have to be either, as much as or limited to your weekly profit. You would pay a lot more commission but wouldn't be paying double PC every other week because your profit would be offset by your losses (your lifetime profits goes over 20% when you lose).

But it would be disheartening to lose 3-4 weeks profit on the trot, when it happens. It's similar to the conundrum of whether you should be better off with Betfair outages. I firmly believe that if you're a profitable trader the odds are slightly in your favour, but many traders claim they're on the receiving end of outages. But even if I'm right, it's a big risk to take and a lot of money to lose if you come out worse.

Derek, how often are these outages happening?? That would be disastrous surely to a trader who was working on a tiny profit margin and a trade inadvertently turning into a punt. I am assuming that when you hit a certain level of trade size then hedging it off on Betdaq would be the option???

[Derek27]

Does betting some (or all) of your profits at the end of the week generate more commission but give you the same long term expectancy?

E.g you make £1k in a week and bet it all at evens near SP before PC is taken, statistically every second week you have £0 profit and £0 PC, every other week you have £2k profit and double PC but have generated more commission?

If it did work I suppose the inconvenience of variance would probably outweigh the difference it actually makes

If you're confident you've found a 50% chance even money bet, it might we worth using it to churn commission but it doesn't have to be either, as much as or limited to your weekly profit. You would pay a lot more commission but wouldn't be paying double PC every other week because your profit would be offset by your losses (your lifetime profits goes over 20% when you lose).

But it would be disheartening to lose 3-4 weeks profit on the trot, when it happens. It's similar to the conundrum of whether you should be better off with Betfair outages. I firmly believe that if you're a profitable trader the odds are slightly in your favour, but many traders claim they're on the receiving end of outages. But even if I'm right, it's a big risk to take and a lot of money to lose if you come out worse.

Derek, how often are these outages happening?? That would be disastrous surely to a trader who was working on a tiny profit margin and a trade inadvertently turning into a punt. I am assuming that when you hit a certain level of trade size then hedging it off on Betdaq would be the option???

An outage can be disastrous to any trader of any size and any margin. I was just saying if you're in a position to green when the exchange goes down, although it's pot luck, the odds are slightly in your favour.

[rik]

Dont think I will ever be in that league and dont know if I would want to just about scrape into it.

You become a 40% tax payer, you take all the risk, you dont get any benefits like holiday pay/ sick pay/ pension benefits etc. I know that for some that does not really matter as they are way way up there, but for those that just scrape over its a pretty hefty tax rate?

I know for some its a trade off for lifestyle etc, but you really have to be in the top tier to make it worth the while.

Braced for some feedback............. but I think its something that needs to be considered.

If you're doing okay while paying 20%, the big question when you're nearing 40% is, if you don't want to pay it, what are you going to do instead?

Get a nighttime job stacking shelves in a supermarket. And what do you put on your C.V.?

supermarket? who says you need to have a dead end job just because you dont want to bet anymore. Im sure most people that do well already do other things on the side

[Derek27]

Dont think I will ever be in that league and dont know if I would want to just about scrape into it.

You become a 40% tax payer, you take all the risk, you dont get any benefits like holiday pay/ sick pay/ pension benefits etc. I know that for some that does not really matter as they are way way up there, but for those that just scrape over its a pretty hefty tax rate?

I know for some its a trade off for lifestyle etc, but you really have to be in the top tier to make it worth the while.

Braced for some feedback............. but I think its something that needs to be considered.

If you're doing okay while paying 20%, the big question when you're nearing 40% is, if you don't want to pay it, what are you going to do instead?

Get a nighttime job stacking shelves in a supermarket. And what do you put on your C.V.?

supermarket? who says you need to have a dead end job just because you dont want to bet anymore. Im sure most people that do well already do other things on the side

I was really referring to myself and what would be on my C.V.: I was a successful sports trader but quit because I didn't want to pay the expenses of my trade even though I wasn't paying income tax. Previously small-time gambler but was barred by all bookies for inappropriate behaviour. Hobbies: drinking, and of course, gambling.

By the way, working in a supermarket is not a dead end job. If you saw the young beauties working in the supermarket I used to frequent before I moved a couple of years ago, you'd want to work there.

[Morbius]

If you're confident you've found a 50% chance even money bet, it might we worth using it to churn commission but it doesn't have to be either, as much as or limited to your weekly profit. You would pay a lot more commission but wouldn't be paying double PC every other week because your profit would be offset by your losses (your lifetime profits goes over 20% when you lose).

But it would be disheartening to lose 3-4 weeks profit on the trot, when it happens. It's similar to the conundrum of whether you should be better off with Betfair outages. I firmly believe that if you're a profitable trader the odds are slightly in your favour, but many traders claim they're on the receiving end of outages. But even if I'm right, it's a big risk to take and a lot of money to lose if you come out worse.

Derek, how often are these outages happening?? That would be disastrous surely to a trader who was working on a tiny profit margin and a trade inadvertently turning into a punt. I am assuming that when you hit a certain level of trade size then hedging it off on Betdaq would be the option???

An outage can be disastrous to any trader of any size and any margin. I was just saying if you're in a position to green when the exchange goes down, although it's pot luck, the odds are slightly in your favour.

Yes I can understand that and I can see why that would tilt things slightly in your favour somewhat.

[deestar]

Try cross market arbing on Betfair as all you would lose is the commission and therefore you effectively don't lose the commission as you have already paid it.

for example under limit with correct score, both markets on betfair? The problem is that Correct score has low liquidity. it's easy to match 5k in under limit, but very hard to do it in correct score. What other kind of markets do you recommend? thanks

A few options out there, but no golden bullet. Have tinkered with all of the following with mixed success

u0.5 goals with 0-0 correct score
Tournament winners with final head to head win market
A little more complicated 1X2 market with corresponding off set dutch lay or back in correct score market
A lot more complicated 3 way off set win - place - each way

In all cases read the market rules carefully. A key thing to remember is that you don't need both sides of the bet to breakeven. You can make a small loss on both bets and still be ahead financially as the offset in PC payable can be greater than the net cash loss. But at the end of the day the effort may simply not be worth it - you may be better expending that energy in making your systems more profitable and live with the 40% PC.

[Andriy]

A few options out there, but no golden bullet. Have tinkered with all of the following with mixed success

u0.5 goals with 0-0 correct score
Tournament winners with final head to head win market
A little more complicated 1X2 market with corresponding off set dutch lay or back in correct score market
A lot more complicated 3 way off set win - place - each way

If you want bigger liquidity, Match Odds vs Asians
Match Odds Team 1; Asian H/C Team 2 + 0.5

Also, this is bulletproof, since the other scenarios can theoretically leave you with an incredibly small chance of a straight gamble (big win v big loss) if game started but not completed. eg back under 0.5, lay 0-0 on CS market / early goal then game called off due to weather, pitch invasion etc / 0.5 goals market is final (you lose), but CS market is voided.

[Derek27]

eg back under 0.5, lay 0-0 on CS market / early goal then game called off due to weather, pitch invasion etc / 0.5 goals market is final (you lose), but CS market is voided.

Never thought of that!!

[deestar]

[/quote]

If you want bigger liquidity, Match Odds vs Asians
Match Odds Team 1; Asian H/C Team 2 + 0.5

Also, this is bulletproof, since the other scenarios can theoretically leave you with an incredibly small chance of a straight gamble (big win v big loss) if game started but not completed. eg back under 0.5, lay 0-0 on CS market / early goal then game called off due to weather, pitch invasion etc / 0.5 goals market is final (you lose), but CS market is voided.
[/quote]

Thanks. Excellent overlooked (at least by me) point! Never had much success managing the 0-0 and u0.5 anyway to be fair. I seem to get better opportunities with the Match Odds - Dutch Correct scores. Hadn't thought about the Asian markets - yet now you mention it, so obvious. Everyday is a learning day!

[MarkA68]

Does betting some (or all) of your profits at the end of the week generate more commission but give you the same long term expectancy?

E.g you make £1k in a week and bet it all at evens near SP before PC is taken, statistically every second week you have £0 profit and £0 PC, every other week you have £2k profit and double PC but have generated more commission?

If it did work I suppose the inconvenience of variance would probably outweigh the difference it actually makes

Thanks for putting my idea out there Alex Ya cheeky bugger Hahahah This is what I came up with as an idea and we were talking about in our group

My idea was not to purely punt the winnings at the end of the week though it was to choose a runner around evens and then lay that on another exchange (you could do this daily or weekly, whatever suited really) and this idea was to avoid or moreover delay getting to 40% commission (I believe from my brief calculations that you would eventually be in a position where you would end up paying 40% but it should prolong 20% for a considerable time - but I could be wrong and may have missed something really obvious).

As Alex mentioned it would reduce your total winnings for the day / week to £0 on BF roughly 50% of the time and on the times you won at BF you would be paying extra commission. But this is not the end of it. It's easy and cheap to get 0% commission on Smarkets and liquidity on the horses has been very good recently so using a matched betting strategy you could do this:

For the sake of keeping it fairly straight forward I'm going to say we can back and lay at 2.00 (use our reading skills in the market and pray for a 1 tick movement lol).

Weekly profit: £1000
Betfair win Stake £1000 @ 2.00
Smarkets Lay Stake £900 @ 2.00

Win on betfair you net £900 and have paid 20% commission thus helping your commission paid statistic, plus you had already paid 5% commission on the initial £1000 profit.
Win on Smarkets you net £900 and pay zero commission but also have the added benefit of showing weekly profits on BF of £0 (plus you have also paid 5% commission when you won the £1000 before you "gambled" it).

So basically you are paying extra commission on BF when you win there and when you lose you show net £0 for the week but get 90% of your weekly profits back on Smarkets.

One thing I have heard is that people can lose their 0% commission if it's not used for matched betting purposes on Smarkets, but I believe it only then goes up to 5% anyway, so if this is the case you would simply increase the lay stake in the above example to £123.08 resulting in:

Weekly profit: £1000
Stake £1000 @ 2.00
Lay Stake: £923.08 @ 2.00

Win on BF net £876.92
Win on Smarkets net £876.93

Obviously if these were your figures it would be easier to get matched daily at around the £150 mark than it would weekly at £1000 - any slippage on odds could prove costly if you are trying to get big amounts matched. If you did do it weekly though you could do it in batches of a smaller amount to give something of a safety net (back £100 / lay £100 wait for liquidity and go again etc).

Now a disclaimer lol my maths is not brilliant, it's not bad but it's not great and I only looked at this very briefly as I am a country mile off of being anywhere near worried about any form of PC charge, it was something I put on the "to-do" list to look at for when the time comes.

If anyone can confirm if it would work in principle or give any reasons why it wouldn't that would be awesome

[jamesedwards]

Weekly profit: £1000
Betfair win Stake £1000 @ 2.00
Smarkets Lay Stake £900 @ 2.00

Win on betfair you net £900 and have paid 20% commission thus helping your commission paid statistic, plus you had already paid 5% commission on the initial £1000 profit.
Win on Smarkets you net £900 and pay zero commission but also have the added benefit of showing weekly profits on BF of £0 (plus you have also paid 5% commission when you won the £1000 before you "gambled" it).

So basically you are paying extra commission on BF when you win there and when you lose you show net £0 for the week but get 90% of your weekly profits back on Smarkets.

I think I have this right, but happy for anyone to pick apart my workings:

> £1k Win on Betfair would return you net £790 profit. 2% commission = -£20. 20% PC = -£190 (-£200 due to £1k gross win but +£10 due to commission generated).
> £1k Loss on Betfair would return you a net £785 loss. 20% PC = +£215 (+£200 due to £1k gross loss, +£15 due to generation of implied commission).

So if you were able to match L4L on Smarkets to win/lose £787.50 you would on average be £2.50 better off every time. Plus you would very slightly improve your lifetime commission % which could in very specific circumstances reduce your higher rate band in the future.

But the time spent finding matches plus the huge issues with runs of wins/losses on one site I can't see how this could work in practise.

[MarkA68]

I think I have this right, but happy for anyone to pick apart my workings:

£1k Win on Betfair would return you net £790 profit. 2% commission = -£20. 20% PC = -£190 (-£200 due to £1k gross win but +£10 due to commission generated).
Lose on Betfair would return you a net £785 loss. 20% PC = +£215 (+£200 due to £1k gross loss, +£15 due to generation of implied commission).

So if you were able to match L4L on Smarkets to win/lose £787.50 you would on average be £2.50 better off every time. Plus you would very slightly improve your lifetime commission % which could in very specific circumstances reduce your higher rate band in the future.

But the time spent finding matches plus the huge issues with runs of wins/losses on one site I can't see how this could work in practise.

Could well be right there James, my workings were on a net profit of £1000 after the initial 5% had been paid but I'm not sure that would make a difference (or how much of one).

"20% PC = -£190 (-£200 due to £1k gross win but +£10 due to commission generated" This bit though? would you pay 20% commission on the initial £1000 if you already layed it off and lost? surely not? they don't take 20% of all winnings do they regardless of your overall net position at the end of the week? To be fair I haven't even looked at PC in that much depth yet so if that is the case well that's seriously put a spanner in the works and I'd find it hard to see how anyone could profit consistently under these circumstances....?!?!

[jamesedwards]

I think I have this right, but happy for anyone to pick apart my workings:

£1k Win on Betfair would return you net £790 profit. 2% commission = -£20. 20% PC = -£190 (-£200 due to £1k gross win but +£10 due to commission generated).
Lose on Betfair would return you a net £785 loss. 20% PC = +£215 (+£200 due to £1k gross loss, +£15 due to generation of implied commission).

So if you were able to match L4L on Smarkets to win/lose £787.50 you would on average be £2.50 better off every time. Plus you would very slightly improve your lifetime commission % which could in very specific circumstances reduce your higher rate band in the future.

But the time spent finding matches plus the huge issues with runs of wins/losses on one site I can't see how this could work in practise.

Could well be right there James, my workings were on a net profit of £1000 after the initial 5% had been paid but I'm not sure that would make a difference (or how much of one).

"20% PC = -£190 (-£200 due to £1k gross win but +£10 due to commission generated" This bit though? would you pay 20% commission on the initial £1000 if you already layed it off and lost? surely not? they don't take 20% of all winnings do they regardless of your overall net position at the end of the week? To be fair I haven't even looked at PC in that much depth yet so if that is the case well that's seriously put a spanner in the works and I'd find it hard to see how anyone could profit consistently under these circumstances....?!?!

Assuming you expect to continue to be long-term profitable then (once the criteria for entry rate PC is triggered), any win is a positive contribution towards future charges and every loss is a contribution away from future charges.

You only get charged based on a combined week's profit but if you lose you build a 'bank' against future winnings. eg if you were to lose £5k in one week then you would be able to profit £1k per week for the next 5 weeks without paying any further PC.

[MarkA68]

Assuming you expect to continue to be long-term profitable then (once the criteria for entry rate PC is triggered), any win is a positive contribution towards future charges and every loss is a contribution away from future charges.

You only get charged based on a combined week's profit but if you lose you build a 'bank' against future winnings. eg if you were to lose £5k in one week then you would be able to profit £1k per week for the next 5 weeks without paying any further PC.

Ah that makes sense thank you buddy, so I doubt actually 'losing' the money you have already won trading (to another exchange) would help make much difference because it's not going to show as an actual deficit on your account, just that you haven't added anything to the profit side of things.