This may seem like a stupid question but regarding laying early prices and then hedging for a profit later.
I have been keeping records of these trades, and where they are successful (which seems to be around 70% of the time), and the horse has drifted out to greater than 1.3 times the lay price struck earlier, they very rarely win the race.
It struck me that perhaps hedging these drifters with low probability of success was wasting hedge money. Are there any maths geniuses out there that can work out a formula for hedging versus un hedged lays for these drifters.
Clearly the drifters do go on to win, but looking at the stats from Betfair; horses in hcaps with a bsp between 12 and 13 are averaging a win ratio of 6.9% from over 2100 bets in 2009. But if I lay them early at 12.5, on average and they drift to say an average price of 25 when they are hedged, the real probability of the win is the same as a 25.00 chance which on Betfair is 3.96% not the 6.9% lay price.
Therefore assuming the average lay is 12.5 and the average hedge is at 25 and the chances of the horse winning is a mere 3.96% would it not be best to leave the bet un hedged, safe in the knowledge that at worse only around 4 horses in a 100 will win? The stats from my own live betting show that from 154 bets where the lay price was averaging 12.5, only 6 of these horses won with an average sp of 28 which I had layed at 12.6 average.
I have spent hours on this so if anyone can put me out of my misery agonising over the long term outcome please let me know.
Thanks a lot guys…….