Maths behind L2B

[Obsidiack]

Hey everyone,

I can't figure out the maths behind laying then backing a horse. Let's hypothetically say that a horse either doubles in price, or halves in price, starting at odds of 10 and laying it at £1 bet. If the odds halve to 5 and I place a hedged back bet I will lose £1. However if it doubles to odds of 20 like I want and I place a back bet hedged I will make £0.5. From this maths it seems if you had no edge at all, and just a horse that randomly goes up or down, you'd lose money consistently by doing this eg if you have a horse go up 10 ticks, then race after one goes down 10 ticks you would lose money(when it feels like the two should balance out)? Can someone help me understand how this would make money

[weemac]

The mistake is to think of only one horse in isolation in a multi-horse race. If twice as many horses double as halve, or your horse doubles in twice as many races as it halves (which seems entirely logical), then balance is restored.

But in fact every horse except one must double in every race, and indeed if the winner looks like underperforming at some point, then every horse in the race will have doubled at some point. Figure that one out!

[Obsidiack]

Hahahaha quite confusing maths for 11pm at night I must say but I believe I understand. I'll keep at my strategy and see if it is a winner long term

[ilovepizza82]

The mistake is to think of only one horse in isolation in a multi-horse race. If twice as many horses double as halve, or your horse doubles in twice as many races as it halves (which seems entirely logical), then balance is restored.

But in fact every horse except one must double in every race, and indeed if the winner looks like underperforming at some point, then every horse in the race will have doubled at some point. Figure that one out!

Could you explain it again ?
In english perhaps.

[Anbell]

The mistake is to think of only one horse in isolation in a multi-horse race. If twice as many horses double as halve, or your horse doubles in twice as many races as it halves (which seems entirely logical), then balance is restored.

But in fact every horse except one must double in every race, and indeed if the winner looks like underperforming at some point, then every horse in the race will have doubled at some point. Figure that one out!

Could you explain it again ?
In english perhaps.

Which bit do you want more explaining?

[Derek27]

The mistake is to think of only one horse in isolation in a multi-horse race. If twice as many horses double as halve, or your horse doubles in twice as many races as it halves (which seems entirely logical), then balance is restored.

But in fact every horse except one must double in every race, and indeed if the winner looks like underperforming at some point, then every horse in the race will have doubled at some point. Figure that one out!

Thanks for that little tip weemac. I've never looked at LTB trading but just had a little play around with a simple bot in practice mode.

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