Overrounds

[SimonH]

Can some kindly soul please explain overrounds to me.

I regularly see statements such as :

'betting to an overround of 108%-120%'

What the higgedy heck does it mean?

Does 100% overround represent true odds?

For example -  Would a six runner dog race ,involving six dogs of equal chance, priced up at 5/1 the field, represent 100% overround?

Also - What overround would a six runner dog race, with all runners priced up at 7/2 represent?

And finally - How would one go about working the overround figure out?

 
 

[Jim-D]

Aint got a bloody clue mate.

[Sheriff Fatman]

Can some kindly soul please explain overrounds to me.

I regularly see statements such as :

'betting to an overround of 108%-120%'

What the higgedy heck does it mean?

Does 100% overround represent true odds?

For example -  Would a six runner dog race ,involving six dogs of equal chance, priced up at 5/1 the field, represent 100% overround?

Also - What overround would a six runner dog race, with all runners priced up at 7/2 represent?

And finally - How would one go about working the overround figure out?

 
 

You're pretty much on the right lines with your understanding.

The easiest way to calculate the percentages is to use decimal odds, as the probability they represent is simply the reciprocal figure.

So, to use your second example, 7/2 is represented in decimal odds as 4.5.  1/4.5 = 22.2%

For 6 runners, each at odds of 4.5, the total market percentage is 6*22.2% = 133.33%.  The higher the figure, the worse the value for the punter.

If he'd offered 'true' odds of 5/1 (i.e. 6.0) then the market percentage would have been 1/6.0 * 6 = 1 or 100%.  100% represents a 'fair' market.

If someone was daft enough to offer a market where the percentages added upto less than 100% then it would be possible to back every runner (stake amount in proportion to the percentage odds being offered) and guarantee a profit.

For example, suppose I had a 6 dog race and offered odds as follows:

5/1 (6.0) on 5 dogs and 8/1 (9.0) on the other.

Percentages are as follows:  (5 x 1/6) + (1 x 1/9) = 5 * 16.6% + 1 * 11.1% = 94.4% (oh dear!)

If you now back the first 5 dogs for a stake of £16.67 each and the other one for a stake of £11.10 then you'd have a total outlay of £94.45.

If one of the first 5 dogs wins you win £16.67*6=£100.02, giving you a net profit of £5.57.
If the other dog wins you win £11.10*9=£99.90, giving you a net profit of £5.45.

Sheriff

[bolt pp]

work out what you'd need to put on to return exactly £100 and thats the odds as a percentage.

e.g:   £40 at 6/4 returns £100, therfore 6/4 expressed as a percetage is 40%

[SimonH]

You're pretty much on the right lines with your understanding.

The easiest way to calculate the percentages is to use decimal odds, as the probability they represent is simply the reciprocal figure.

So, to use your second example, 7/2 is represented in decimal odds as 4.5.  1/4.5 = 22.2%

For 6 runners, each at odds of 4.5, the total market percentage is 6*22.2% = 133.33%.  The higher the figure, the worse the value for the punter.

If he'd offered 'true' odds of 5/1 (i.e. 6.0) then the market percentage would have been 1/6.0 * 6 = 1 or 100%.  100% represents a 'fair' market.

If someone was daft enough to offer a market where the percentages added upto less than 100% then it would be possible to back every runner (stake amount in proportion to the percentage odds being offered) and guarantee a profit.

For example, suppose I had a 6 dog race and offered odds as follows:

5/1 (6.0) on 5 dogs and 8/1 (9.0) on the other.

Percentages are as follows:  (5 x 1/6) + (1 x 1/9) = 5 * 16.6% + 1 * 11.1% = 94.4% (oh dear!)

If you now back the first 5 dogs for a stake of £16.67 each and the other one for a stake of £11.10 then you'd have a total outlay of £94.45.

If one of the first 5 dogs wins you win £16.67*6=£100.02, giving you a net profit of £5.57.
If the other dog wins you win £11.10*9=£99.90, giving you a net profit of £5.45.

Sheriff

Thanks Sheriff,

One other thing -  How would you go about working out the overround for an event, such as the WSOP main event, where not all runners are priced up?

For example, if all the ante post betting money was for the Ivey's, Hellmuth's, Brunson's, Vaswani's etc of the poker world, and a Mr Matey Boy, a (surprise, surprise) internet qualifier from Utah, won, the bookies would, surely, clean up more than normal at an outrageous overround.

[TightEnd]

thats exactly right Simon...the prices offered on WSOP main event betting are scandalous for the serious punter and are there for the novelty bet only

For example I believe Ivey is priced at 50-1 fav to reach the final table. Avoid bets like this like the plague, terrible value.

[Sheriff Fatman]

For practical purposes you could just assume they're being offered at odds of 1.00 (so for a wiinning £1 'bet' you'd win zero)

So for each runner without a price you're immediately adding another 100% to the total market.  So, looking at the WSOP Main Event, with approx 8,000 runners, of which maybe 200 are quoted then you already have a 780,000% market before calculating the odds.

Fancy a flutter?

Sheriff

PS: Probably a bit harsh in reality as, by not offering a price, the bookie won't take any money on these 'bets' at 1.00 as they don't exist.