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Pardon my ignorance but I just went to place a £2 bet (minimum) on Biden "Back All" at 1.07. Does that mean when Betfair DOES pay out, I will make a profit of 1

Pardon my ignorance but I just went to place a £2 bet (minimum) on Biden "Back All" at 1.07. Does that mean when Betfair DOES pay out, I will make a profit of 14p? Surely not?

mnd999 6y ago
Betfair is an exchange, so they aren't the ones paying. Assuming someone will match the bet, it does look like it though. Seems like free money.
selectodude 6y ago
There's always outside risk that Biden never becomes president, that's where your 14p profit comes from.
- mschuster91 6y ago
  I'm German, I get a 404 on the original post - what is the exact wording of the bet? That Biden does not get elected President, or that he gets elected by the EC but effectively not assumes the office of President (e.g. due to a putsch/other form of emergency law, a SC decision, being arrested, being assassinated, dying of coronavirus, the EC election being delayed/cancelled due to coronavirus...)?
  - 1123581321 6y ago
    Here’s the text: “This market will be settled according to the candidate that has the most projected Electoral College votes won at the 2020 presidential election. Any subsequent events such as a ‘faithless elector’ will have no effect on the settlement of this market. In the event that no Presidential candidate receives a majority of the projected Electoral College votes, this market will be settled on the person chosen as President in accordance with the procedures set out by the Twelfth Amendment to the United States Constitution. This market will be void if an election does not take place in 2020. If more than one election takes place in 2020, then this market will apply to the first election that is held. 10/03/2020 10:30am – Once voting (whether postal, electronic or at the ballot box) begins in the year 2020 for the US Presidential Election 2020, the election will be deemed to have taken place for the purposes of this market. We will then settle the market as per our rules regardless of whether the election process is fully completed in 2020 or beyond. If there is any material change to the established role or any ambiguity as to who occupies the position, then Betfair may determine, using its reasonable discretion, how to settle the market based on all the information available to it at the relevant time. Betfair reserves the right to wait for further official announcements before the market is settled. Betfair expressly reserves the right to suspend and/or void any and all bets on this market at any time if Betfair is not satisfied (in its absolute discretion) with the certainty of the outcome. Additional candidates may be added to this market on request. Please note that candidates in this market will not be partially settled and will remain in the market until it is fully settled. This is to allow customers to continue trading candidates that they have positions on and because each candidate is still a valid runner in this market. Customers should be aware that: Transmissions described as “live” by some broadcasters may actually be delayed. The extent of any such delay may vary, depending on the set-up through which they are receiving pictures or data. Please note, due to internal administrative procedures, the indicated start date/time of this market is subject to change. This will have no impact on settlement as detailed in our market specific rules. Any changes to the start time/date will be recorded in the market rules. 16:00 17/06/2020 –Market rules have been updated to reflect new information above.. If any candidate withdraws for any reason, including death, all bets on the market will stand and be settled as per the defined rules (Updated - 20/06/2020) The start time has been changed to reflect the first polls opening on Election Day Updated 02/11/2020
sorokod 6y ago
I guess the market is still open and someone is willing to bet against you.
Scaevolus 6y ago
Betfair takes a 5% commission, which is why you don't see probabilities for nearly-certain events driven down to 1:1.
- PapaSpaceDelta 6y ago
  Betfair takes its commission as a percentage of the profit that one has made in a given market rather as a percentage of a bet size, so it's always worth making a bet on a certain event. Usually by the end of an in-play sporting event, one will find that there is no liquidity available to bet for the likely winner or against the likely loser (and draw if applicable) at any price (their lowest price is 1.01 BTW). In this case, there are clearly people who are still willing to bet against (lay) a Biden Presidency, at very long odds. This is presumably either because they believe that the price adequately compensates for the low probability of it not happening, or to hedge risk that they have accumulated taking other positions while trading in this market (more likely IMHO). One other factor is the cost of carry - while money is tied up in a bet it can't be used for anything else, including other betting strategies that might have a higher expected profit. In this case, if one has already made a profit betting for a Biden Presidency at longer odds than 1.07, it might now be worthwhile to pay someone else the slight risk premium to take up ones position until settlement, so that one can lock in the profit and move onto other things.

Pardon my ignorance but I just went to place a £2 bet (minimum) on Biden "Back All" at 1.07. Does that mean when Betfair DOES pay out, I will make a profit of 14p? Surely not?

mnd999 6y ago

Betfair is an exchange, so they aren't the ones paying. Assuming someone will match the bet, it does look like it though. Seems like free money.

selectodude 6y ago

There's always outside risk that Biden never becomes president, that's where your 14p profit comes from.

mschuster91 6y ago
I'm German, I get a 404 on the original post - what is the exact wording of the bet? That Biden does not get elected President, or that he gets elected by the EC but effectively not assumes the office of President (e.g. due to a putsch/other form of emergency law, a SC decision, being arrested, being assassinated, dying of coronavirus, the EC election being delayed/cancelled due to coronavirus...)?
- 1123581321 6y ago
  Here’s the text: “This market will be settled according to the candidate that has the most projected Electoral College votes won at the 2020 presidential election. Any subsequent events such as a ‘faithless elector’ will have no effect on the settlement of this market. In the event that no Presidential candidate receives a majority of the projected Electoral College votes, this market will be settled on the person chosen as President in accordance with the procedures set out by the Twelfth Amendment to the United States Constitution. This market will be void if an election does not take place in 2020. If more than one election takes place in 2020, then this market will apply to the first election that is held. 10/03/2020 10:30am – Once voting (whether postal, electronic or at the ballot box) begins in the year 2020 for the US Presidential Election 2020, the election will be deemed to have taken place for the purposes of this market. We will then settle the market as per our rules regardless of whether the election process is fully completed in 2020 or beyond. If there is any material change to the established role or any ambiguity as to who occupies the position, then Betfair may determine, using its reasonable discretion, how to settle the market based on all the information available to it at the relevant time. Betfair reserves the right to wait for further official announcements before the market is settled. Betfair expressly reserves the right to suspend and/or void any and all bets on this market at any time if Betfair is not satisfied (in its absolute discretion) with the certainty of the outcome. Additional candidates may be added to this market on request. Please note that candidates in this market will not be partially settled and will remain in the market until it is fully settled. This is to allow customers to continue trading candidates that they have positions on and because each candidate is still a valid runner in this market. Customers should be aware that: Transmissions described as “live” by some broadcasters may actually be delayed. The extent of any such delay may vary, depending on the set-up through which they are receiving pictures or data. Please note, due to internal administrative procedures, the indicated start date/time of this market is subject to change. This will have no impact on settlement as detailed in our market specific rules. Any changes to the start time/date will be recorded in the market rules. 16:00 17/06/2020 –Market rules have been updated to reflect new information above.. If any candidate withdraws for any reason, including death, all bets on the market will stand and be settled as per the defined rules (Updated - 20/06/2020) The start time has been changed to reflect the first polls opening on Election Day Updated 02/11/2020

sorokod 6y ago

I guess the market is still open and someone is willing to bet against you.

Scaevolus 6y ago

Betfair takes a 5% commission, which is why you don't see probabilities for nearly-certain events driven down to 1:1.

PapaSpaceDelta 6y ago
Betfair takes its commission as a percentage of the profit that one has made in a given market rather as a percentage of a bet size, so it's always worth making a bet on a certain event. Usually by the end of an in-play sporting event, one will find that there is no liquidity available to bet for the likely winner or against the likely loser (and draw if applicable) at any price (their lowest price is 1.01 BTW). In this case, there are clearly people who are still willing to bet against (lay) a Biden Presidency, at very long odds. This is presumably either because they believe that the price adequately compensates for the low probability of it not happening, or to hedge risk that they have accumulated taking other positions while trading in this market (more likely IMHO). One other factor is the cost of carry - while money is tied up in a bet it can't be used for anything else, including other betting strategies that might have a higher expected profit. In this case, if one has already made a profit betting for a Biden Presidency at longer odds than 1.07, it might now be worthwhile to pay someone else the slight risk premium to take up ones position until settlement, so that one can lock in the profit and move onto other things.