How is matched betting risk-free/The Maths Behind Matched Betting
You might feel a bit confused or feel as though you’re just making deposits and waiting for the “eureka” moment, that feeling of knowing that what Profit Squirrel is teaching you, really does work.
The maths behind matched betting with Profit Squirrel is really quite simple. Let’s break it down and explain what happens with your money, that’s temporarily deposited in the bookmaker and exchange in order to make risk-free profits.
Example of a qualifying bet “bet £10 get £30”
The calculator shows that once we place our back bet of £10 with the bookmaker at odds of 2.0 and at lay odds of 2.2 place a lay bet in the exchange of £9.30, our liability is £11.16 – so we deposit at least £11.16 in the exchange in order to copy and paste our lay stake (£9.30) in the exchange bet slip.
The odds calculator shows that once the event ends, we’re going concede a small qualifying loss of -£1.16
It’s completely normal to make a tiny loss on your qualifying matched bet, known as a qualifying loss (QL), don’t worry you will make profit as soon as you’re rewarded with the free bet, I’ll come onto to that later.
So what are the outcomes with the money we’ve deposited for our qualifying matched bet? There are only two scenarios that can happen:
Your back bet wins and your lay bet loses [Back stake X Back odds]: £10 X 2.0 = £20. Remember £10 was already yours from depositing, so you’re up by £10 in your bookmaker account. If the back bet wins, then your lay bet has lost, which means you lose the liability amount (only the liability, not the lay stake – the lay stake is the amount you’re looking to WIN from the exchange).
As a result: You’re overall position £10 – 11.16 = -£1.16 (QL)
Your lay bet wins and back bet loses. Simple, you win the lay stake £9.30 and your liability funds are still available to use. But this means you lost your £10 back bet £10.
Now, when your lay bet wins in the exchange, the exchange will charge a small commission. In this example, (Betfair exchange) minus lay commission on winnings 5%)
£9.30 – 5% = £8.84 - £10 you lost in the bookmaker = £1.16 QL
Liability – this is the amount you need in the exchange, you don’t need to deposit lay stake + liability, the lay stake is the amount you’re looking to win from the exchange if your lay bet wins. Why? Understand what you’re doing in an exchange market. You’re playing the role of the bookmaker: So at the current lay odds calculated by the odds calculator, you can lay £9.30. In order to take this money from the exchange market if your lay bet wins, you’ll need to accept that if the lay bet does not win you’ll need to payout the liability amount. Your liability will be tied up until the event settles and then your cash is available to use again.
If the lay bet loses you only lose the liability (not the stake), if your lay bet wins then you win the lay stake amount – minus any lay commission. At the time of this recording, Betfair currently charges 5% commission on any wins.
Don’t worry about the liability, this “loss” will be largely offset by the “wins” you will have earned in your bookmaker account and vice versa.
Also, it’s important to know that it’s significantly more likely to win your lay bet and therefore not lose the liability amount, as the lay bet covers a lot more of the outcome of say a football event because a lay bet covers “Not to win AND the draw”. Don’t be afraid of depositing the liability amounts.
After placing your qualifying matched bet, you now receive the free bet! So we now have £30 of bookmakers free bet to take advantage of.
We now use the odds calculator in Free Bet SNR mode – why? Because it’s a free bet courtesy of the bookmaker, and that means if your back bet wins with the bookie you won’t receive the stake (£30), just the winnings – as it was the bookmaker's stake/credit in the first place. Example:
Now we look to create a matched bet using the free bet
You’ll make at least £15.54 profit regardless of which bet wins – guaranteed profit! How? Let’s break it down.
Your back bet wins and your lay bet loses: Back stake X Back odds: £30 X 2.5 = £75. Remember you don’t get the bookmaker stake, therefore, you’re up £45
[75 – 30 = £45]. If you back bet win then you lost your lay bet, resulting in losing your liability amount £29.45. You will only lose the liability amount, never the stake.
Therefore £45 - £29.45 = £15.55 guaranteed profit. Minus your original qualifying loss (£1.16) your net profit is £14.39
Your lay bet wins and back bet loses. You win the lay stake £16.36 and your liability funds are still available to use. But this means you lost your back bet. We don’t mind losing the back bet, why? Because it was a free bet from the bookmaker, not our money! Remember, the exchange takes a lay commission on winnings, therefore £16.36 – 5% = £15.54 guaranteed profit. Minus your original qualifying loss (£1.16) your net profit from completing is £14.38.
How much liability can you afford to temporarily float?
Now you know that you’ll never lose your hard-earned cash, how much can you really afford to float in the exchange? The higher the match odds the more profit you’ll squeeze out the free bets (give example just playing with the matched odds on the calculator).
Example: at current matched odds of 2.5/2.8 = guaranteed profit off a £30 free bet is at least £15.54 with a liability of £29.45. However, let’s say we go for higher matched odds of say, 5.5/5.7. Your guaranteed profit is now much higher, at least £22.70 (+£7.16 greater profit to extract from the free bet), but your liability is now £112.28.
It’s completely up to you, whichever odds and event you wish to go for. Soon you’ll build up your bank from our welcome offers big enough to take on more liability and therefore profit much more!
And that’s it! That’s all there is to making guaranteed profits here at Profit Squirrel over and over again.
Now, go ahead and move onto the next offer and make your next deposit – there are so many offers to complete and profit from, so much tax-free profit to take home!
Still unsure? Watch this video again, the short answer is, trust the Profit Squirrel calculators, it’s all based on maths so you can’t go wrong.
Want to understand more? Ask away in the Facebook forum or use the forum in the member's area.
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