Can someone explain to me in simple terms what happens when a horse is withdrawn to the odds and how it affects current positions in the market?
On an earlier race today I had both BF and BD open and a horse was withdrawn. The odds on the favourite (sorry cant remember which race or horse) was shown on BF came in from around 4s to 3.4 on the favourite. However, on BD it was not yet showing as withdrawn and the money on the lay side was still at around 4s for around 15-20 seconds. I therefore backed it for around 50 pound expecting that once the odds reflected the withdrawal that the odds had to come in as it was offering up quite a big arb. When the odds did come in, instead of seeing an expected green I had a red of about 7 quid and curious as to why it was?
Horse withdrawn rule
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JollyGreen
- Posts: 2047
- Joined: Sat Mar 21, 2009 10:06 am
Basically the price of the withdrawn horse creates the difference in the the new market. If a horse is priced >40 there will be no reduction. If a price is 11.0 then the reduction is 10% which is applied to the winnings. I cannot comment on BD as I never use it but I can only assume they were slow making the adjustment so you effectively placed a bet and then they reduced the odds.
Here is how Betfair explain it
How the Reductions are applied for Exchange markets
In the win market, reductions will be made on the traded price.
For example: if the non-runner's final reduction factor is 25% the traded price on all previously matched bets on other horses will be reduced by 25% - traded price of 8.0 would become 6.0 etc. And these might be further reduced if another horse is subsequently declared a non-runner.
In the place market, reductions will be made to the potential winnings on the bet only, and not the traded price.
For example: if the non-runner's final reduction factor is 25% the potential winnings on all previously matched bets on the other horses will be reduced by 25% - a traded price of 8.0 would become 6.25. For example a £10 bet on a horse to be placed at a traded price of 8.0 would provide winnings of £70. If there is a non-runner with a reduction factor of 25% in the race, that factor will be applied to the £70 of potential winnings leaving potential winnings of £52.50. Therefore the revised traded price will be 6.25.
The traded price may be further reduced if any other horse(s) is subsequently declared a non-runner, however odds cannot be reduced below 1.01.
Reserves: A reserve runner may appear in the relevant markets but will have a non-applicable reduction factor until Betfair has received confirmation that it is a confirmed runner, in which case an applicable reduction factor may apply to it.
For the avoidance of doubt, any reduction factor applicable to a non-runner replaced by a reserve, will be applied to all bets struck on the relevant markets, prior to the removal from those markets of such non-runner by Betfair. Likewise, should a reserve runner become a confirmed runner but subsequently become a non-runner, any reduction factor applicable to such non-runner will be applied to all bets struck on the relevant markets, prior to the removal from those markets of such non-runner by Betfair.
Here is how Betfair explain it
How the Reductions are applied for Exchange markets
In the win market, reductions will be made on the traded price.
For example: if the non-runner's final reduction factor is 25% the traded price on all previously matched bets on other horses will be reduced by 25% - traded price of 8.0 would become 6.0 etc. And these might be further reduced if another horse is subsequently declared a non-runner.
In the place market, reductions will be made to the potential winnings on the bet only, and not the traded price.
For example: if the non-runner's final reduction factor is 25% the potential winnings on all previously matched bets on the other horses will be reduced by 25% - a traded price of 8.0 would become 6.25. For example a £10 bet on a horse to be placed at a traded price of 8.0 would provide winnings of £70. If there is a non-runner with a reduction factor of 25% in the race, that factor will be applied to the £70 of potential winnings leaving potential winnings of £52.50. Therefore the revised traded price will be 6.25.
The traded price may be further reduced if any other horse(s) is subsequently declared a non-runner, however odds cannot be reduced below 1.01.
Reserves: A reserve runner may appear in the relevant markets but will have a non-applicable reduction factor until Betfair has received confirmation that it is a confirmed runner, in which case an applicable reduction factor may apply to it.
For the avoidance of doubt, any reduction factor applicable to a non-runner replaced by a reserve, will be applied to all bets struck on the relevant markets, prior to the removal from those markets of such non-runner by Betfair. Likewise, should a reserve runner become a confirmed runner but subsequently become a non-runner, any reduction factor applicable to such non-runner will be applied to all bets struck on the relevant markets, prior to the removal from those markets of such non-runner by Betfair.
Last edited by JollyGreen on Sun Jun 02, 2013 3:41 pm, edited 1 time in total.
When any horse is withdrawen, whatever percentage of the book that that runner made up is subtracted from all bets that have previously been struck in the market.
So when you took those odds at 4, the withdrawal hadn't been applied yet on the daq. While you took 4, after the reduction your back odds are adjusted in this case to around 3.4. Then the odds have drifted back out slightly and you've closed for a loss.
The reduction applies equally to all bets back or lay, so any trades you've already carried out and the profit from those are unaffected, but if you haven't yet closed the trade your entry point will be changed automatically after the suspension is lifted.
It does throw up some nice opportunities to profit from in the moments of madness after the suspension. In this race I was trading the 3rd favourite and managed to grab the same odds AFTER the reduction factor so when the price settled at where it should be I was showing a nice green. If you had managed to get 4's when the market is temporarily empty just after the suspension then you would have got the profit you were expecting.
I realise that was quite longwinded, haven't tried to explain this process before, I hope it answers your question.
So when you took those odds at 4, the withdrawal hadn't been applied yet on the daq. While you took 4, after the reduction your back odds are adjusted in this case to around 3.4. Then the odds have drifted back out slightly and you've closed for a loss.
The reduction applies equally to all bets back or lay, so any trades you've already carried out and the profit from those are unaffected, but if you haven't yet closed the trade your entry point will be changed automatically after the suspension is lifted.
It does throw up some nice opportunities to profit from in the moments of madness after the suspension. In this race I was trading the 3rd favourite and managed to grab the same odds AFTER the reduction factor so when the price settled at where it should be I was showing a nice green. If you had managed to get 4's when the market is temporarily empty just after the suspension then you would have got the profit you were expecting.
I realise that was quite longwinded, haven't tried to explain this process before, I hope it answers your question.