I read some old blogs where ROI is talked about, I was just wondering how I would go about working this out.
With traditional betting I can do this more easily.
ie I have 100 bets for £100 each. 10 winners all at 12/1.
So I stake £10,000. The returns are £13,000. Leaving a profit of £3000.
That gives an ROI of 30%.
How do I work out a comparison for trading? What are my stakes?
e.g. If I back a horse for £100 @4 and lay off at 3.8. ( giving £5.26 profit).
And in the same race lay a horse for £100 @4, then back at 4.3. (giving profit of £ 6.98)
My total profit for this race is £12.24 (minus commission). But how much have I turned over?
Is it simply £200? (the back and lay amounts added together?)
Is it £ 400? The most that I could lose in a worst case scenario? ( -£100 from the back losing + -£300 from the lay winning).
Though as I would take a loss, the £400 is never really at risk?
Any ideas on how the turnover and ROI figures should be calculated? I have seen that betfair will provide 'volume' figures on how much is being turned over, how are these figures calculated?
How to work out ROI ?
Others views may differ but I view my return on percentage of turnover which for trading is usually tiny. I download my betting history from Betfair add up all the stakes and divide the profit into that. If you do the same calculation on stakes it can be misleading as the figures are often enourmous, so using total turnover gives me a more consistant view.
I just downloaded my p+l from betfair and only had the columns with the p+l in. I didnt have any stakes.
I suppose its a grey area, and it doesnt really matter how you calculate the figure, as long as you calculate it in a consistent way for future comparisons.
Comparing my traditional betting ROI to my trading ROI isnt really possible, as they cannot really be calculated in the same way.
I suppose its a grey area, and it doesnt really matter how you calculate the figure, as long as you calculate it in a consistent way for future comparisons.
Comparing my traditional betting ROI to my trading ROI isnt really possible, as they cannot really be calculated in the same way.
ROI is used as profitability of an investment. Profit seems to be easy to measure when putting in to betting context as it's merely net return (after your commission and initial bet) but investment is what causes most issue. As a regular better or trader you put more than money. In that you're investing your time which could be more than say you may spend on deciding which shares to buy. Therefore to work out ROI in betting context is to take opportunity cost of your time spent in achieving that profit. I would use the following formula:
net profit - (hours x £/hrs)
________________________ x 100 = ROI
Investment
So to apply to your example if you achieved a net return of £12.24 using £100 & your wage is £10/hour & you have spent 10 minutes executing this transaction then:
£12.24 - (£10 x 1/6)
__________ = 11% for this particular transactions
£100
If you spend spend 8 hours in a day using £1000 bank & you achieve say £100 then your ROI will be 2%.
It seems to me, having spent some in this area, that it takes more than money to achieve result and therefore ROI may be not a good measure of return in this context.
net profit - (hours x £/hrs)
________________________ x 100 = ROI
Investment
So to apply to your example if you achieved a net return of £12.24 using £100 & your wage is £10/hour & you have spent 10 minutes executing this transaction then:
£12.24 - (£10 x 1/6)
__________ = 11% for this particular transactions
£100
If you spend spend 8 hours in a day using £1000 bank & you achieve say £100 then your ROI will be 2%.
It seems to me, having spent some in this area, that it takes more than money to achieve result and therefore ROI may be not a good measure of return in this context.
Here is how I would assess my return.
I went to Betfair visited the 'my account' area and downloaded my 'bet history' for yesterday. I totalled up all the stakes in the J column on the spreadsheet. This totalled £236,000. I made £652 net yesterday so my return on turnover before commission was just short of 0.30%.
However, you could also look at it a different way. My net exposure in the market never breached £2000 yesterday so I could have traded with only £2k in my account and still returned £652 which would have been a 32% return on my bank. I prefer the former measure though.
I went to Betfair visited the 'my account' area and downloaded my 'bet history' for yesterday. I totalled up all the stakes in the J column on the spreadsheet. This totalled £236,000. I made £652 net yesterday so my return on turnover before commission was just short of 0.30%.
However, you could also look at it a different way. My net exposure in the market never breached £2000 yesterday so I could have traded with only £2k in my account and still returned £652 which would have been a 32% return on my bank. I prefer the former measure though.
Thanks for the working example.
When i download the figures from betfair I have nothing in the J column, so cannot access the stakes.
I go My Account>Betting Profit & Loss> Get P&L, then click the download to spreadsheet link.
I just get 4 columns opening in excel, Market, Start Time, Settled date and P/L.
How do I get the stake data in the spreadsheet too?
When i download the figures from betfair I have nothing in the J column, so cannot access the stakes.
I go My Account>Betting Profit & Loss> Get P&L, then click the download to spreadsheet link.
I just get 4 columns opening in excel, Market, Start Time, Settled date and P/L.
How do I get the stake data in the spreadsheet too?
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
oscar123 wrote:I go My Account>Betting Profit & Loss> Get P&L
How do I get the stake data
Bet Angel wrote:I went to Betfair and downloaded my bet history
My hunch is, you need to consider 2 factors independently:
a) the risk capital you need for your strategy
b) the maximum amount of money you need to cover your stakes in order to allow your participation on BFair (this would be the 400 you mentioned, as long as the first bet and the second lay are open simultaneously and not yet covered by the corresponding opposite transactions)
Now, assuming that you are running a maximum of 10 equal strategies in parallel. According to criterion b, you need to hold 4000 on your bet fair account in order to cover those bets. This is the minimum amount you need in order to be allowed to participate in BFair.
On the other hand, you will need some risk capital for your strategy to cushion potential extended downward trends in your time series of profits. If that number is higher than 4000 then this is the amount you need to relate your ROI to.
Obviously, this is a largely simplified example, as you will not have exactly the same quotes on all of the horses and neither will there be exact simultaneousness. In order to come up with a good understanding of the actual amount needed, you will need to come up with some good proxies or even Monte Carlo simulations and according VaR calculations.
Hope that makes sense.
Cheers, Fidibus
a) the risk capital you need for your strategy
b) the maximum amount of money you need to cover your stakes in order to allow your participation on BFair (this would be the 400 you mentioned, as long as the first bet and the second lay are open simultaneously and not yet covered by the corresponding opposite transactions)
Now, assuming that you are running a maximum of 10 equal strategies in parallel. According to criterion b, you need to hold 4000 on your bet fair account in order to cover those bets. This is the minimum amount you need in order to be allowed to participate in BFair.
On the other hand, you will need some risk capital for your strategy to cushion potential extended downward trends in your time series of profits. If that number is higher than 4000 then this is the amount you need to relate your ROI to.
Obviously, this is a largely simplified example, as you will not have exactly the same quotes on all of the horses and neither will there be exact simultaneousness. In order to come up with a good understanding of the actual amount needed, you will need to come up with some good proxies or even Monte Carlo simulations and according VaR calculations.
Hope that makes sense.
Cheers, Fidibus
Sorry about this,
And I have tried google, but I cant get it to work.
How do I get excel to add up the numbers in column J ?
Ive tried clicking on the cell underneath, then typing =SUM(J3:J1382)
But it just comes out as 0.
Anybody help by pointing out the obvious here?!
And I have tried google, but I cant get it to work.
How do I get excel to add up the numbers in column J ?
Ive tried clicking on the cell underneath, then typing =SUM(J3:J1382)
But it just comes out as 0.
Anybody help by pointing out the obvious here?!
I don't believe this statistic is very useful for traders (by which I mean anyone who both backs and lays in a market) as it's not a reflection of the risk you are taking. For traditional gamblers, who are only backing, they can work out what they are making per unit invested by looking at the ROI. As a trader you cannot do this.
For instance, someone who has backed at 1.01 for £10,000 has added £10,000 to what Betfair call 'bet volume' (turnover), but someone who lays at 101 risking the same amount has added £100. They are essentially making the same bet with the same risk/reward.
This bias also exists in Betfair's own amount matched figures used to show how much has been matched per market.
If you take the inverse of your lay bets to work out what odds you would have backed at (even if no such back bet exists), and add this to the total stakes of your back bets, you get a more accurate reflection of the amount risked. However this still doesn't take into account trading. For instance, with a bank of £2,000, you could 'risk' £50,000 on a market by trading.
NET risk (your maximum liability at any point in a market) is much more difficult to work out after the fact. Should you factor in unmatched bets? Does anyone use a macro or something else to work this out from the account statement?
The most important metric for me is percentage growth of my bank per year as I aim to compound profits.
Having said that, this bias might not matter that much for some of you. As I place a lot of bets at the extreme side of the odds, my figures get heavily skewed.
For instance, someone who has backed at 1.01 for £10,000 has added £10,000 to what Betfair call 'bet volume' (turnover), but someone who lays at 101 risking the same amount has added £100. They are essentially making the same bet with the same risk/reward.
This bias also exists in Betfair's own amount matched figures used to show how much has been matched per market.
If you take the inverse of your lay bets to work out what odds you would have backed at (even if no such back bet exists), and add this to the total stakes of your back bets, you get a more accurate reflection of the amount risked. However this still doesn't take into account trading. For instance, with a bank of £2,000, you could 'risk' £50,000 on a market by trading.
NET risk (your maximum liability at any point in a market) is much more difficult to work out after the fact. Should you factor in unmatched bets? Does anyone use a macro or something else to work this out from the account statement?
The most important metric for me is percentage growth of my bank per year as I aim to compound profits.
Having said that, this bias might not matter that much for some of you. As I place a lot of bets at the extreme side of the odds, my figures get heavily skewed.
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CaerMyrddin
- Posts: 1271
- Joined: Mon Sep 07, 2009 10:47 am
Great post tilopa44.
I agree with you that the metrics to this problem is difficult to set....
And I'm also using the % growth but must admit it's a poor metric, as it doesn't take into account the amount of money you would need to put your trades in.
In a certain way this problem is linked with the one that has been discussed on another thread (can't find the link) where a BA user suggested that we were able to set BA to calculate stakes so that you had the same profit/loss for one tick gain/loss on a given interval. The problem is that you are not buying units of something, but taking risk and covering it with money.
Any suggestions to make this conversion?
I agree with you that the metrics to this problem is difficult to set....
And I'm also using the % growth but must admit it's a poor metric, as it doesn't take into account the amount of money you would need to put your trades in.
In a certain way this problem is linked with the one that has been discussed on another thread (can't find the link) where a BA user suggested that we were able to set BA to calculate stakes so that you had the same profit/loss for one tick gain/loss on a given interval. The problem is that you are not buying units of something, but taking risk and covering it with money.
Any suggestions to make this conversion?