What the size of your stake does to the price
The commonest assumption about a price and a stake is that a bigger bet attracts a worse price. On the samples the direction runs the other way, and the reason is visible in what a band is for: it manages the size of the operator exposure, not the size of the reader ambition.
- bands
- 5
- bottom band
- 1.86
- top band
- 1.98
- range
- 6.5%
A quoted price often depends on the stake band the bet falls into. On the samples one selection was quoted at 1.86 up to a 2.00 stake and 1.98 above a 200.00 stake, a range of 6.5% - the largest stake got the best price. The band manages the operator exposure, and a small stake is quoted worse rather than better.
The band ladder
A stake-banded quote is a ladder: each band has its own price for the same selection, and the bet is priced at the rung its stake falls on. On the samples there are five rungs, and the price rises with the stake. That is the opposite of what a reader expects, because the usual intuition is that a large bet is the one an operator wants to discourage.
The intuition is not wrong about the operator's interest, it is wrong about the direction. A small stake on a long-priced selection is the expensive shape for an operator: many of them, all at the top of the price range, each costing more to process than it earns. A large stake on the same price is worth the same margin in money with one twentieth of the handling, so the operator can afford to price it better.
| Stake band | Quoted price | On a stake of | Potential return |
|---|---|---|---|
| up to 2.00 | 1.86 | 2.00 | 3.72 |
| 2.00 to 10.00 | 1.89 | 10.00 | 18.90 |
| 10.00 to 50.00 | 1.92 | 25.00 | 48.00 |
| 50.00 to 200.00 | 1.95 | 100.00 | 195.00 |
| above 200.00 | 1.98 | 250.00 | 495.00 |
| five bands | 1.86-1.98 | - | 6.5% between the rungs |
What a band means in money
The band is easier to judge in return than in odds, because a price difference looks small in decimals and grows in the multiplication.
- Move the stake slightly inside a band, and see whether the price moves at all.
- Move the stake across a band boundary, and see how much the price steps.
- Is the price quoted for a stake above the band's ceiling at all, or is the stake itself refused?
- Does the same stake get the same price on a second, unrelated selection?
- Is the step bigger than the market movement over the same few minutes?