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Melbourne Cup betting culminates every year on the first Tuesday in November - a date etched firmly into the minds, not only of the majority of Australians, but of horse racing and betting enthusiasts throughout the world.
In some ways the Melbourne Cup is similar to the Grand National in the UK;
It is a long distance horse race (albeit on the flat rather than over jumps).
It attracts a large field of runners.
The odds of the horses are much greater than for any normal race - the 2015 winner Prince Of Penzance won at 100/1.
Vast numbers of punters place a wager on the outcome.
Most of these bettors are 'once a year players' - caught up in the excitement of a national event.
And herein lies an edge - an edge over other punters with a greater chance of making some serious money from Melbourne Cup betting.
We can employ two strategies, which when combined, will significantly increase the chances of making money on the race.
These two strategies are:
1. WOM (weight of money)
2. Greening Up
The Meaning of WOM
WOM is a familiar term for sports traders on the Betting Exchanges and means Weight Of Money.
This refers to the relationship between the money that backers and layers are waiting to get matched on any event and is calculated by dividing the backers money by the layers money.
This will result in a figure between 0 and 1.
Simply put, the price falls if there are more sellers than buyers and rises if there are more buyers than sellers.
Most trading software or betting bots as they are known will calculate the WOM for you and careful study of how the markets behave can reveal profitable betting strategies.
This WOM figure is constantly changing and gives an indication of which way the market is moving.
0 - 0.33 = the price is moving down
0.33 - 0.66 = the price remains constant
0.66 - 1 = the price is moving up
When Betting Exchanges were in their infancy it was possible to use the WOM to reliably inform your trading and profit from it. Since then the markets have become increasingly complex with the advent of trading bots which attempt to profit from the smallest movements in the market and opportunities are quickly snapped up.
Another ploy used by big traders sees large volumes of money pushed onto the markets to deliberately influence the price. Once they have matched their trades at the prices they were aiming for the money is then removed from the market. These trades result in false market moves which can trap the unwary.
There are a number of other random influences on the weight of money – the proliferation of tipsters and betting systems on the market will push money onto the market from all directions as punters try to get their bets on.
This is particularly apparent with horse racing where there are a large number of markets taking place every day of fairly short duration. As the tips go out to punters there is a rush to get bets matched and the result is a temporary distortion of the price.
So by keeping an eye on the WOM of runners in the Melbourne Cup betting we can combine this with our next strategy - Greening Up.
Winner guaranteed is not a term that readily comes to mind when backing horses however there is a way to achieve this seemingly impossible outcome if we place our bets on the exchanges such as Betfair - the answer is to 'green up'.
The 2017 favourite, Almandin who won the race last year, was backable at 55.0 (54/1) shortly after the market opened. He is now trading at 6.4.
Admire Deus, Bonneval and Red Cardinal are trading now around 17.0 after early prices of 70.0.
Suppose for example I had placed a £10 back bet on Bonneval when the price was at 25.0.
From the WOM on Bonneval it is evident that the price is shortening considerably and at some point between now and the race start I can make the decision to green up ie take a profit whatever the outcome of the race by placing a lay bet on the selection.
Let us suppose that the price shortens to 8.54 from my back price of 25.0 and I wish to calculate what stake I should use for my lay bet on the selection.
I placed £10 to win at the early odds of 25.00 and to calculate the stake for my lay bet I need to multiply my initial stake times my initial back odds (£10 x 25.0 = £250).
I then divide that by the lay price of 8.54 (£250/8.54 = £29.27) - So the stake I use to lay the horse is £29.27.
If Bonneval wins I gain £250 less £10 stake = £240 less 5% commission = £228.
If Bonneval wins I lose the lay part of the bet 29.27 x 8.54 = £250 less stake of £29.27 = 220.73.
So my profit on the trade is £228 - £220.73 = £7.27 profit if Bonneval wins.
If however Bonneval loses I gain the lay stake £29.27 - 5% = £27.81 less back stake £10 = £17.81 profit if Bonneval loses.
I can apply the same principal for a runner in the Melbourne Cup betting where the price is drifting (the WOM is falling off) so in the previous example say I lay for £10 at an early price of 8.54.
I multiply the lay price by my lay stake (£10 x 8.54 = £85.40) and then divide that by the odds which have drifted out to 25.0 (£85.40 /25.0 = £3.42).
I now back the selection with a stake of £3.42 at the new odds of 25.0.