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  • #1 by whitey86 on 30 Jul 2014
  • Hi all,

    Does anyone know the formula or how I work out how to make a certain profit by trading 10 ticks?

    For example, I want to back a selection at odds of 1.8 and then want to trade it at 1.7 but for a profit of £2.50 - so how do I work out how much to back initially at 1.8?

    Thanks,

    Whitey
  • #2 by jmbt on 31 Jul 2014
  • something to do with r_ticks(bm_backp,-10) maybe... or something like that. I'll tell you for sure when I'm home tomorrow
  • #3 by whitey86 on 31 Jul 2014
  • Hi jmbt,

    I know that would find the price 10 ticks from the back price i.e. 1.8 - r_ticks(bm_backp,-10) = 1.7 but I need to know how much to back at 1.8 in the first place to then lay a certain amount at 1.7 to make a profit of £2.50.

    If it makes it easier to work out, the back price will always be between 1.1 and 2.

    Thanks,

    Whitey
  • #4 by londolozi on 31 Jul 2014
  • To win a set amount you need to control a couple of things.
    Let's assume your target is 1 unit (dollars, pounds or rupees) and you want to trade out at 1 tick below your back price.

    The back price is $3.50. Therefore 1 tick is 0.05.

    The first is the initial amount you wager.
    target/(1-commission)/b_tick*back_price
    1/.95/.05*3.5=73.68

    We now know your lay price, 1 tick below the backed price, 3.45

    bm_backp/r_ticks(bm_backp,-1)*bm_backa
    3.5/3.45*73.68=74.75
    You now submit a lay offer of 74.75 @ 3.45
    If/When matched you have a arbitrage of +1.07 - commission is about +1.01.

    In your example you need to wager 47.37 @ 1.8
    Then lay 50.15 @ 1.7, you trade out with +2.78 less .14 = +2.64

    You see prices collapse regularly by 10 ticks or more, the tough part is predicting a trend continues or changes direction you need before it happens.

    Good luck.




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