Mathematics of Staking - Dollar per Tick

[Nick JD]

I really need some help.

I'm trying to work out the formula for "dollars per tick". Essentially, I need to be able to pass a function the price, and how much I need to stake to open the trade with in order to either green up, or red up with a set amount (say, $1, or $5 per tick) of win, or loss.

Does anyone have the equation, or can point me in the right direction? I have a general idea that it's based on increments between prices, but sadly the maths is beyond me at this stage.

Any help would be much appreciated.

[Franklin1]

I really need some help.

I'm trying to work out the formula for "dollars per tick". Essentially, I need to be able to pass a function the price, and how much I need to stake to open the trade with in order to either green up, or red up with a set amount (say, $1, or $5 per tick) of win, or loss.

Does anyone have the equation, or can point me in the right direction? I have a general idea that it's based on increments between prices, but sadly the maths is beyond me at this stage.

Any help would be much appreciated.

I think your backer stakes should be 1/betfairodds

[Nick JD]

So at odds of 1.50, if I want to make $1 per tick, I need to stake 0.66c?

I'm more confused now!

[Franklin1]

I gave you something you can generally use to level a book.

So at odds of 1.50, if I want to make $1 per tick, I need to stake 0.66c?

I'm more confused now!

I re-read and understand your question better now. What you are asking is not possible because the betfair price increments are not linearly related to greened-up / level positions.

Example:
You back 1000 @ 1.5
If price is now 1.49 you can green up to make 6.80 (you make 6.80 'this tick')
If price is now 1.48 you can green up to make 13.51 (you make 6.89 'this tick')

See how the amount you make at each tick is different. You can try approximate what you want over small ranges of ticks, but in general it's just not possible.

[Nick JD]

I found this on a betangel discussion on the topic. I'd like to see the excel code now...

https://www.youtube.com/watch?v=fvQGDO8YSd0

[Nick JD]

Turns out I had a grave misunderstanding of the logic behind staking to a constant profit/loss per tick. I (wrongly) thought there would be a linear aspect to it: that as the odds approached 1.01 the stake would increase.

It doesn't work like that. This is not the first time the mathematics of bookmaking have completely confounded me.

Anyway, turns out my function for returning the stake for a set dollar per tick movement was actually doing what it was supposed to do. I wrote it so long ago I don't remember where I got the info from to write it.

Maybe someone else will find this thread and have less of a sore brain than I did. My function:

def calculateStake(price, dollars_per_tick_wanted):

    increment = getIncrement(price)
    stake = (price / increment) * dollars_per_tick_wanted

    return round(stake, 2)

NB: getIncrement() returns 0.01 for 1.01-1.99; 0.02 for 2.00-2.98 etc

[Franklin1]

Thanks for posting a follow up. I compared our methods and see your formula makes you dollars_per_tick_wanted only if the selection wins, and zero otherwise. This definitely keeps the maths easier.