How do you calculate odds and determine value?

[Division]

I'm wondering what approach people take to selecting a bet and deciding if the odds on offer are value.

I have designed an excel spreadsheet where I input my opinion of the goals scored percentage per team and it generates a table that I can compare to the odds on offer from a range of bookmakers and can quickly see where the value is.

This is the output table for Chelsea v Man Utd.

I can quickly see that the value based on my opinion is on over 1.5 goals.

The odds are not big, but in the long run the most important thing is value.

For someone who wants bigger odds I can see that the next value bet is 'Both Team To Score' @ 1.91 with William Hill which might appeal to most bettors.

This approach has refined my betting dramatically and increase my ROI significantly.

It also highlights to people that while Both Teams To Score offers quite a bit of value in my opinion I expect this bet to lose 40% of the time so bankroll management is also important.

How do you do it?

[Sir Puntalot]

Great question. I can honestly say with me, I calculate it in my head without too much thought. I look at any event that I know well and come up with a rough price in my head and after betting since I was 15, I'm usually fairly accurate. If I see odds bigger, I'm all over it. 

[harry_rag]

I use the spreads to give me an indicative fixed odds price in certain markets, mainly bookings, goals, goalscorers and try scorers in rugby.

Fairly simplistic approach using Poisson or stuff gleaned from KP's book on betting on football but it helps me to either identify possible value bets or decide whether the spreads or fixed odds are they best way for me to back something I fancy.

[Division]

I have been doing this a while also and, even with focusing on a small number of teams that I follow in depth, the stats will usually contradict my original opinion on what the best best is.

I don't do spread betting so I'm can't follow what you are saying about that Harry but fundamentally the spreads, like fixed odds, are determined by public perception and so are flawed a large percentage of the time... which allows people to profit long term. I'll have a look at spread betting at some stage in the future and might be able to incorporate it into my pricing model.

Thanks for the replies lads, hope to see this thread grow with a few different opinions on how to approach this so we might all refine our methods.

[aftershock9]

Hi Division, fascinating approach with the spreadsheet and goals percentage. Would you be able to give further insight into how you generate the spreadsheet above? 

[paparainbow]

U get value to over 1.5 because

1. you don't apply overound the same way bookies do

2. you use poisson distribution, which is know for overdispersion. Actual life variance is greater than poisson predicts, due to its limitation var= mean.

 

I suggest checking negative binomial to fix this, and also improve your ovr model. For example

probabilities : 20%-80%

fair odds : 1/0.20 = 5.00 - 1/0.80 = 1.25

lets suppose margin 108%

your method : 5.00/1.08, 1.25/1.08 -> 4.60 - 1.16  bookis though do not apply margin like that resulting in an odd set of lets say 4.00-1.25

 

they tend to trim long odds and be more generous to short ones. they have their reasons: risk management and attractive favourite odds.

cheers