Lay betting risk versus reward
Last week’s lay betting article looked at 10 important factors that can help you identify horses that are likely to be under the odds:
(1) Gun run last start and fell in
(2) End of a long preparation
(3) Poor jockey
(4) Bad barrier
(5) Heavy track
(7) Hype horse
(8) Peak run
(9) Trainer patterns
(10) Poor sectional times
Today I wanted to talk about lay betting risk versus reward so that you can have a sound money management plan. And just to avoid any confusion regarding terminology, we’ll categorise a ‘successful lay’ as one where our lay bet comes 2nd or worse – the horse loses and we win.
You have two main options when it comes to managing your lay betting staking.
Are you looking to win the same amount on all successful lays?
Or are you looking to have the same amount at risk on any lay, but the amount you win depends on the odds you layed at?
The key concept to consider is your tolerance of risk so I’ll demonstrate these two examples now but will leave commission out just to keep the maths very simple:
(1) Lay to win a fixed amount – this means that every successful lay returns you the same amount. For example you may decide you want to win 1% of your bank each time a lay bet is successful. With a $5,000 bank that means you’re laying to win $50 per race. So while your win amount never changes, what does vary from race to race is your exposure or level of risk. Clearly the greater the odds, the greater your potential losses. At odds of $2.00 you are risking $50 if the horse wins, but at odds of $6 you have exposure of $250. Your balance at risk is calculated by the following equation:
(Odds – 1) x stake
(2) Lay to lose a fixed amount – this means that your exposure is the same on every lay, but what does change is the amount you win if the horse doesn’t. Here are a couple of examples, but this time we’re risking 2% of a $5000 bank which means that any time a lay bet wins the race we lose $100.
Remember our potential profit is always the backer’s stake. So your downside is the same every race, but the shorter the odds the more you profit from each successful lay.
Laying a horse at odds of $2 means we’ll let the backer on for $100. That’s our profit if the horse is beaten.
Laying a horse at odds of $5 means we will only let the backer on for $25 because we have a fixed risk each race of $100, being 2% of our bank. Once again our potential profit is the backer’s stake which in this case is $25.
Both the fixed win and fixed risk methods have their merits, so it’s important that the approach you employ coincides with your lay betting strategy. You need to have plenty of data on your method’s strike-rate, average odds and average winning odds and then combine that with an honest assessment of your own betting psyche.
Only then can you be confident that you have the right balance of risk versus reward, and confidence is a critically essential ingredient so that you stick with your plan even through a losing run. Lay betting can be dangerous and volatile, but with the right selection and staking can also be highly lucrative.