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Article written by Pro Punter Rod K.

One of the most important but least understood concepts in punting is how much small differences in price can make to your bottom line. In some cases, it can be the difference between making a profit and losing. $0.10c is pocket change in real life, but how much is it worth on the punt? Read on to find out…

Price and Chance

Price (decimal odds) and chance have a close relationship on the punt:

Price = 1 / Chance

Chance = 1 / Price

For example, if we’re betting on a fair coin flip, we know that the chance of heads is 50% (0.5) and therefore the fair price (or rated price) is $2:

Price = 1 / Chance

Price = 1 / 0.5

Price = $2

Alternatively, a price of $2 means the chance is 50%:

Chance = 1 / Price

Chance = 1 / $2

Chance = 0.5

Chance = 50%

However, a bookmaker wouldn’t offer us $2 on heads. They would offer us $1.90 and that’s how they make their profit – they offer us worse odds than the fair price.

As punters, we’re looking for a situation where we’re getting $2.10 or $2.20 on heads, and that’s how we make our profit. Individual bets can lose but long-term we would win in this situation.

The true challenge of the punt (and what separates the pros from regular punters) is the accurate calculation of chance. The calculation of chance on heads is easy but what is the chance (and therefore a fair price) on Richmond defeating Carlton or Nature Strip winning first up? $1.40? $1.60? It matters because in order to make a long-term profit, you need to be betting on better (higher) odds than the fair price.

The value of $0.10c

We all know that $2.20 is better than $2.10 but how much better is it? Most punters see the $0.10c difference and intuitively compare $0.10c to $2.10. While we’d all prefer to back the $2.20, most would be happy enough with the $2.10. $0.10c does not seem like much compared to $2.10 but that’s where the misconception lies.

When we calculate overs (or expected value or profit-on-turnover), the equation we use is:

Overs = (Bet Price – Fair Price) / Fair Price

For example, if we’re betting on heads in our coin flip, we know that heads is a 50% chance, therefore the rated price (or fair price) is $2.00.

Let’s say you’re offered $2.10 on heads. What are the overs?

Overs = (Bet Price – Fair Price) / Fair Price

Overs = ($2.10 – $2.00) / $2.00

Overs = $0.10c / $2.00

Overs = 0.05

Overs = 5.0%

5.0% overs means that for every $100 we bet, we will profit $5 on average (assuming the chance we used in the calculation is accurate, which we know it is in this example).

Now let’s say another bookie offers you $2.20 on heads. What are your overs on that price?

Overs = (Bet Price – Fair Price) / Fair Price

Overs = ($2.20 – $2.00) / $2.00

Overs = $0.20c / $2.00

Overs = 0.10

Overs = 10.0%

10.0% overs means that for every $100 we bet, we will profit $10 on average (assuming the chance we used in the calculation is accurate).

The key numbers in these examples are the $5 and $10 profit we can expect to make on every $100 we bet.

At the end of the day, we punt to make real world profit, so despite the various numbers, it’s the real-world profit (the cash in our back pocket) that’s the key number we’re really interested in.

As you can see in the examples, just a $0.10c difference in price ($2.20 vs $2.10) results in DOUBLE the expected profit ($10 vs $5) when the fair price is $2. Double the profit is significant! It is the overs on one price and how that compares to the overs on another price that’s the key comparison and not how $0.10c compares to $2.10.

We won’t always get the $2.20 but the point is that even small differences in price are well worth the hunt and can make a significant difference to your bottom line.

The next question is, how do you get the best price? Stay tuned for the next article…