Congratulations if you picked the winner of the Grand National this year, but if you’re serious about making regular profits from horse racing all year round then you can do this through trading. This is done through betting exchanges such as Betfair, who offer person-to-person betting, allowing you to back selections to win, and lay selections if you think they will lose.
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This is potentially very lucrative, particularly during the morning of a race, because whereas bookmakers prices remain fairly static during this time, exchange prices are a lot more volatile. As a result there are occasions when the exchange prices differ significantly from the bookmakers prices in general. This is how exchange traders make their profits, by backing a high price and laying it back at a lower price, or laying low and backing higher. Often traders will leave guaranteed profits whatever the outcome if they get on the right side of a trade:
For example, let’s say you backed Horse A for £100 at 3 (equivalent to 2-1 using conventional odds). If the horse won you would earn £200 profit. Let’s say for argument’s sake that this horse was then backed right into 2 (or evens). You could then lay this bet back at this price for £150 guaranteeing yourself a profit of £50 whatever the outcome:
If Horse A won, you would win (£100 @ 3 = £200 profit) – (£150 @ 2 = £150) = £50
If Horse A lost, you would win (-£100) + (£150) = £50
Now prices don’t usually move this much and most of the time I only look for small movements, therefore the profits are not as great, but over time these small profits can build up very nicely.
Now let me illustrate a couple of real-life examples from Saturday’s Grand National meeting.
Firstly in the 3.25 race there was a horse called Liberman that looked an excellent trading opportunity. Using Oddschecker, I noticed that it’s price with the bookies was mainly between 8 and 11, yet at one point it was trading at a massive price of 17.5 with Betfair. Now you would expect it to be trading slightly higher at Betfair at possibly 12 or 13 (prices on the exchanges are on average upto 20% higher than bookmakers’ prices), but 17.5 was simply far too generous.
As it turned out, Liberman’s price did indeed drift inwards shortly afterwards, and was soon trading at a more realistic price, and was available to lay at 14. Therefore this could have been a profitable trade if you had backed at 17.5 and later layed at 14.
Onto the actual Grand National itself, and there was just one horse that represented a decent trading opportunity, Ross Comm. It’s price with the bookies ranged from 15 to 17, so at 17.5 on the exchanges this looked slightly too short. Remember the exchanges prices are generally upto 20% higher than traditional bookmakers’ prices, and even more so with higher-priced horses.
Therefore you would expect the price of 17.5 to be slightly higher, and therefore drift outwards slightly, and as it happened, it’s price did drift out, not as much as expected, but was still available to back at 19. Therefore this would have been another profitable trade if you had layed at 17.5 and backed at 19.
These are just two examples taken from the Grand National meeting, but there were others. Trading opportunities like these are not confined to just the big race meetings either. There will often be a fair few potentially profitable opportunities every day, however big the race meeting. The best thing of all is you don’t need to have a vast knowledge of horse racing either. I know next to nothing about horse racing, but have still managed to make consistent profits over the years just from trading.
Jim Buccini is a former full-time Betfair trader who has produced a website detailing proven profit-generating tips and strategies. For more information click here:
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