The cap: how a maximum stake turns a price into a flat sum
The third mechanism is the loudest, because it is published: a headline price with a maximum stake printed beside it. The object worth understanding is the cap, because a cap is what converts a better price into a flat sum, and the sum is small.
- headline price
- 2.20
- market price
- 1.90
- maximum stake
- 10.00
- value at the cap
- 3.00
A maximum stake printed beside a price converts it into a flat sum. On the samples a headline 2.20 stood against a market price of 1.90 with a 10.00 cap: the cap is worth 10.00 times 0.30, or 3.00, and it is worth exactly 3.00 whether the total stake is 10.00 or 500.00, because everything above the cap is repriced at the market price.
Three numbers, and the third one is the mechanism
A price with a cap carries three numbers, and only the first one is advertised. The headline price is the loud one. The market price is the one the headline is measured against. The maximum stake is the one that decides how much of the better price can actually be taken, and it is usually printed beside the price rather than on it.
That is the whole mechanism of a cap: it is not a better price on your bet, it is a better price on the first slice of your bet. The slice is fixed, so the value is fixed too, and a reader who stakes above the cap buys the rest of the bet at the ordinary price. Without a cap a better price would scale with the stake; with one, it cannot.
| Stake | At 2.20 up to the cap | At 1.90 above it | Total return | Against 1.90 throughout |
|---|---|---|---|---|
| 10.00 | 10.00 x 2.20 = 22.00 | 0.00 | 22.00 | 19.00 |
| 25.00 | 10.00 x 2.20 = 22.00 | 15.00 x 1.90 = 28.50 | 50.50 | 47.50 |
| 50.00 | 10.00 x 2.20 = 22.00 | 40.00 x 1.90 = 76.00 | 98.00 | 95.00 |
| 200.00 | 10.00 x 2.20 = 22.00 | 190.00 x 1.90 = 361.00 | 383.00 | 380.00 |
| any stake | the same 22.00 | the rest at 1.90 | +3.00 every time | a flat 3.00 |
Pricing the condition, not the price
A promoted price usually arrives with a second condition beyond the cap, and the condition is what has to be priced. The commonest is a minimum price on the selection, or a minimum stake below which the promotion does not apply at all.
- What is the market price the headline is measured against, and is it shown anywhere?
- What is the maximum stake, and is it printed beside the headline or only in the conditions?
- Is there a minimum stake as well as a maximum, and does the promotion apply to any part of the bet below it?
- Is the promotion paid as a price or as a free bet, which are different instruments with different expiry?
- Does the extra value stop at the cap, or does the whole bet keep the promoted price?