I get asked a lot whether it’s better to bet direct to the Betfair exchange, or to use BSP (Betfair Starting Price).
To give myself a short break finishing the new Trading Service and content for Hedger Pro, I thought I’d write a short post covering some key points on this question.
This is the Betfair explanation of what BSP actually is.
Betfair’s Starting Price is different. It’s based on bets placed by both backers and layers in any market – there is no margin for profit built in - and that’s why we think it will give you much better odds.
Unlike other bookmakers' Starting Price, the Betfair Starting Price will be determined by balancing bets from customers who want to back and lay, so because it's other customers placing the bets and because there is no margin for profit built in, you are far more likely to have better odds than the bookies' SP.
Betfair Starting Price will be calculated exactly to ensure the fairest and most transparent odds possible for both backers and layers. The Betfair Starting Price does not need to account for a profit margin but instead is calculated at the start of an event by looking at the relationship between the amounts of money requested at SP by opposing customers and by looking at unmatched Exchange bets.
As someone using Betfair regularly, is it better to use BSP compared to direct to the exchange, this is the question and it depends on what you’re doing, because if you’re just placing straight bets each day, not trading, I do think BSP is better for a variety of reasons.
One of which is that I think you end up with better odds in the long run, and with no hassle getting your bets on, as you’re not having to consider liquidity.
The main reason though is that it keeps you organised, given you’re able to trace all the odds on each selection very quickly, as they are recorded online across a variety of websites.
You can of course scan through your Betfair account history to keep records when using the exchange, this is possible, but not the most functional way to keep track.
It’s also possible if using our Cloud Bet Bot software with Remote Daily Betting or the JV MK2 Betting System, as this will track your results via the Bets Placed panel within your dashboard. This tracks your exchange and BSP bets, so this is very useful to have this built into the service.
As a service provider at Exponential Bet using BSP allows me to run a betting system for hundreds of members, and know that everyone opting for the BSP choice of betting will be returning the exact same profit as myself, and every other member.
This I think gives a fair and level playing field, as you know when joining the service, knowing the published results are what you can also achieve.
It also means you’re going to be matched, because when you fire a bet direct to the live exchange at specific odds, usually depending when you do this, ie how busy the market is, it will depend whether the bet is matched or not at the price you want. It could be left unmatched, or you may need to amend it if the price drifts or steams in depending on the bet type.
For me placing these bets for members using automation having BSP as an option is a godsend, given the bets go on, and they always get matched if BSP is selected by the member.
We do factor in some odds movement when all our bets are sent to market, ie an odds movement threshold. This means if a member is using exchange to place an automated RDB Dutch bet, and when the bet goes to market they could be on the back end of the placement (which is randomised for fairness), they could end up having a lay bet put on slightly higher with a bit more than the target liability on the bet.
It’s a hazard of exchange betting, the odds move when the money goes on so you will experience this, but again it’s about pros and cons.
A definite pro of betting to a fixed liability with BSP is that the amount you set as your stake, that is your stake amount no matter what, it will not change. If the odds drift on the lay bet, you still only put that amount on as your bet, it won’t be affected unlike the exchange option.
This does come with the caveat that a minimum amount is allowed, which is £2.00 for a back bet, and £10.00 for a lay bet in the UK.
However, with the exchange option you can get on at near enough the right time using any amount you like (if operating software or Cloud Bet Bot), allowing for odds movement, but with BSP if the odds really drift using this example of laying to fixed liability, you can be matched at a higher price that will not affect your risk, as in outlay, but it will affect the amount you can potentially return as a profit.
Sometimes this will mean your bet risk if backing of laying will not be ideal when based against the level of reward you want to balance, but it’s pros and cons, and as stated it all depends on what you’re doing. If you’re pre-race trading for example, forget about BSP.
We also recommend for some bets a maximum bet amount when using the exchange with our services, and if just betting yourself to the exchange you will need to be well versed in assessing the amount of money available before placing your bet. With BSP you do not need to consider this.
As an example, with RDB Dutch which has a lay betting system as the primary strategy, we set a max amount allowed to be placed on the exchange.
All the bets going on at once will quite literally shift the market on a horse, which if all our members used the exchange option at the stake amounts. The stakes our members use varies from a couple of quid, up to thousands of pounds per bet, which if all placed using the exchange would demolish the market.
The max amount on these bets we have set is £30.00 on the RDB Dutch bets, which is higher than I’d like to be honest, but it’s also fair given that BSP minimum bet amounts in some countries are higher than in the UK BSP min levels listed above.
Which means restricting the max exchange bet to say £10.00 for members, which is the minimum fixed liability lay at BSP in the UK, would not work in other countries for members who don’t want to bet higher than £10.00 with their currency equivalent.
Therefore, we set this at £30.00 on the exchange to allow for international members not to be affected by the difference, when they do not want to bet to their country minimum stakes at BSP.
With SP your bet is locked matched as Betfair explain, so you can’t cancel it should you change you mind, which you could if directly betting to the exchange simply by hedging off the bet, backing or laying it, whatever returned your money with no loss, a minimal loss, or profit.
With SP as stated your locked in once placed until the event begins, and then your bet is on, and should you wish to hedge or cancel it in any way then after you can do so, as you have to wait until it goes in play.
It’s a risk doing this if just betting with no plan, as the bet may instantly move against you not allowing for a hedge. If you’re trading in play, it can work very well.
You do have no control of the price you’re getting with BSP though, as it may be better than the current odds you’re considering on the exchange. It may not be as good come race time, or you could better off, that’s the gamble.
You have not way to tell if the price will be better or worse, but you can guarantee that you will be matched.
You cannot request a higher price using BSP should the odds drift, so it’s no good for trading pre-race for obvious reasons given the bet is only placed at in play.
With specific software you can utilise this for your in-play trading, you can set an in-play trade to fire to market at starting price, and then set a percentage profit to take in running. This is possible and something I’ve done myself when experimenting with in play trading using Fairbot strategy editor.
It’s very useful way of setting up your days in play trades in fact, as you’re not going to get stuck on a drifting horse for example if trading this way, it’s the start price you get, and from that point you’re looking for your lay, or back if laying first at SP to achieve your profit.
If you’re assessing the market and looking to react to price movements with in-play betting, it can still work using Fairbot, this is not a restriction, as selecting the option from the strategy editor built in to the platform is very quick to react.
Hedger Pro is not set up for this type of BSP trading as its online, and as such has other benefits in comparison. Locally running software authorised to place your bets and trades to Betfair is capable of BSP in-play trading.
Running locally on your PC as I covered in my previous post has pros and cons compared to online, and this is not what Hedger Pro was set up for, but if you’re looking to trade from BSP for a percentage profit in play, Fairbot is a good option for you, and comes with a 15 day free trial.
If you’re looking to have all the data you need at your fingertips to make the right
choices for what horses to trade in play, and set times for your trades to fire a minute to post and lock in a percentage profit, all while being compatible with all devices, and not reliant on being ran locally on your computer, then Hedger Pro is amazing for this and I’ll add some videos soon to show you some examples of in-play trading this way using HP.
To summarise...
Betfair Starting Price is great if you’re betting, or looking to trade in-play, but for pre-race trading as an example it will obviously not work.
You do not have the same liquidity restrictions you have with direct to the exchange betting, but you have other compromises to consider such as being locked into your bet once placed.
In addition to this you have minimum bet volumes to factor in, so if operating a points betting balance, and your percentage per bet falls below this min level, then exchange would be your only option, if over then BSP can be an excellent choice to make given it alleviates needing to consider the live quirkiness of the betting exchange.
Betfair these days have taken down their phone service for members, which is not ideal, so if you have a question to do with BSP I haven’t covered let me know.
Thanks
Ryan
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