How is Market Percentage Calculated?
A few weeks ago I was asked by a reader the question ‘How is market percentage calculated’ and today I am going to show you how you can calculate it yourself.
You will notice at the top of Betfair’s screen there is a little figure in the back box and a little figure in the lay box at the top of the list of runners. This is the market percentage for each side of the market and shows you how much over-round or under-round there is on the market.
As you can see the backing side of this race at Windsor is 103% and the laying side is 98.1%.
What does this mean?
This means that there is an over-round on the back side by 3% and the lay side by 1.9%. An easier way to explain this is that on the backing side anything over 100% is the amount you would lose were you to bet every runner and on the laying side everything under 100% is the amount you would lose were you to lay every runner.
In the 19:40 at Windsor you would lose 3% of your stake backing every runner in the race and 1.9% of your stake laying every runner in the race.
The amount of 100% is called the over-round. You do not often find this information in bookmakers because in order to make a profit they can easily have over-rounds of 20% (which would like 120% in the above image).
It is of course possible to find out how much the market percentage is, by adding up all the runner percentage chances of winning based on the market odds.
Calculating the chances of winning
You may already know how to do this, in which case you can skip to the next section, but if you don’t then it is a very simple sum. To calculate the percentage chance a runner has of winning based on its market value you use decimal odds and perform the following sum.
1 / Decimal odds = probability * 100 = percentage chance of winning
Let’s use Official Style’s back odds of 2.44 above as an example.
1 / 2.44 = 0.41 * 100 = 40.98% chance of winning
Calculating the market percentage
To calculate the market percentage you find the percentage chance of winning for every runner in the race and then add them together. For our Windsor example this would give us the following information.
Horse |
Back Odds |
Percentage Chance of Winning |
Official Style |
2.44 |
40.98% |
Battle Honour |
7.6 |
13.16% |
Aultcharn |
7 |
14.29% |
Sun Seeker |
8.6 |
11.63% |
Streets Of War |
9.4 |
10.64% |
Perfect Point |
14.5 |
6.90% |
Chriss Ridge |
30 |
3.33% |
Equine Science |
160 |
0.63% |
Epernay |
70 |
1.43% |
Market Percentage |
102.98% |
As you can see the Market Percentage is 102.98% which Betfair round up to 103%. All you need to find out the market percentage is the odds of all the participants.
In the above example you say decimal odds = probability. How does 2.44 = 0.41?
Hi Steve, to work out the probability from decimal odds you do 1/ decimal odds so 1/2.44 = 0.41
I was wondering if it was more informative to use percentages rather than odds- I can see instantly from your example that the first 3 have 70% chance. Do you know of any bettors that prefer the % rather than the odds?
Pete
You need to use both. The first three have that percentage chance based on the market’s assessment but using the markets valuation (while accurate) won’t make you long term profits. What you need to find are selections that the market think will win 70% of the time but actually win 80% of the time, then you will make your profit. A bit of an extreme example but you get the idea 🙂
terrific stuff, there just aren’t enough hours in the day to calculate everything you need to study,maybe just one race would keep someone occupied for a full day.