multiple accounts with bf

[steven1976]

HI Steve
What I meant was discounts. If I am at say 4% on my main account...my secondary account might be at 4.5%.
When you open your second/subsequent account it doesn't automatically open with your existing level of discount. I cant remember now, but Im sure the accounts other than the main one starts again at 5%
regards
Peter

With you now. I think I was mixing up with discounts and my understanding was that by putting more money through the markets it gives better discount rates that are deducted from PC charges, so I thought it could help bring down your payments. I think something along these lines was mentioned a few weeks ago to help reduce charges for PC payers.

[xitian]

Commission paid doesn't really matter if you are paying PC.

Even if you pay PC, your base commission rate can make a minor amount of difference. This is because PC is calculated from your "commission generated" and not your "commission paid".

From the Betfair charges page it defines:

Commission generated = (Commission + Implied Commission) ÷ 2
where
Implied Commission = market losses x 3%

This means if you're trading at zero base rate discount of 5%, say, you end up paying more PC than if you were trading at a 40% base discount of 3%, say.

Example trading at 5% base commission:

Win £100 = pay 5% comm of £5.
Lose £100 = implied comm of only £3.
Commission generated = (5 + 3) / 2 = £4.
If you're paying PC, then only £4 is put towards it even though your NET profits is -£5 from that win!

Example trading at 3% base commission (having reached 40% discount):

Win £100 = pay 3% comm of £3.
Lose £100 = implied comm of only £3.
Commission generated = (3 + 3) / 2 = £3.
If you're paying PC, then £3 is put towards it and you've lost £3 from your win commission, so I would class this as a fair level.

By following the same example but with 2% base commission (after 60%) discount, you can actually start to offset the PC you pay by churning commission. This is sort of akin to financial exchanges by getting rebates by providing large amounts of liquidity to the markets.

So that's one justification for it, but I don't think it's fairly skewed because it's so hard to get to the higher discount rates. In the end I don't think the base rate difference really makes any nominal difference, so sorry for making a rather pedantic point!

[Euler]

I'm aware of that which is why I'm on a high discount rate, but I don't think that really affects many. Worth pointing out though.

[andyfuller]

By following the same example but with 2% base commission (after 60%) discount, you can actually start to offset the PC you pay by churning commission. This is sort of akin to financial exchanges by getting rebates by providing large amounts of liquidity to the markets.

As I understand it, this is why there are so few people on 60% PC as most of those that were are now churning to such an extent that they have been able to come down off the 60% level.