Green stakes - this is when you make a back and lay bet, but the stake of the second bet is adjusted according to how much price changed since the first bet, to spread the profit (or loss) across all outcomes.
If you use any of the green options in the software, then the software calculates the green stake for you automatically.
When doing a back and lay on the same selection (for example when trading):
- With level stakes you only win (or lose) if the selection you bet on actually wins the game / race. Any other result means you will break even.
- With green stakes you win (or lose) the same amount overall regardless of which selection wins the race:
To understand the difference in outcomes between level stakes and green stakes options, please see these examples:
Example 1 - Using level stakes when price moves against you
Back Chelsea £100 at odds 5.0
Then price moved against you to 5.1:
So you lay Chelsea £100 at 5.1.
If Chelsea wins:
Back bet profit £400 (plus your initial stake is returned).
Lay bet Loses £410, this is calculated as £100 x (5.1 -1)
So overall a loss of £10.
Any other result:
Back bet loses £100
Lay bet returns £100 profit
So this is break-even. if Chelsea doesn't win.
So with level stakes, in the above example, you only make a loss if the selection wins the event, otherwise you break-even.
Example 2 - Using level stakes when price moves in your favour
Back Chelsea £100 at odds 5.0
Then price moves in your favour to 4.9
So you lay Chelsea £100 at 4.9.
If Chelsea wins:
Back bet returns £400 (plus your initial stake is returned).
Lay bet Loses £390, this is calculated as £100 x (4.9 -1)
So overall a profit of £10.
Any other result:
Back bet loses £100
Lay bet returns £100 profit
So this is break-even. if Chelsea doesn't win.
So with level stakes, in the above example, you only make a profit if the selection wins the event, otherwise you break-even.
Example 3 - Using green stakes when price moved against you
(for example using a stop loss at 5.1)
Back Chelsea £100 at 5.0
Then price moves against you to 5.1
So you lay Chelsea (a green stop loss) £98.04 at 5.1
If Chelsea wins:
Back bet profit £400 (plus your initial stake is returned).
Lay bet Loses £401.96, this is calculated as £98.04 x (5.1 -1)
So overall a loss of £1.96
Any other result:
Back bet loses £100
Lay bet returns £98.04 profit
So overall a loss of £1.96
So when using green stakes for the stop loss, you loses £1.96 regardless of which selection wins.
Example 4 - Using green stakes when price moved in your favour
Back Chelsea £100 at 5.0
Then price moves in your favour to 4.9
So you lay Chelsea (a green stake) £102.04 at 4.9
If Chelsea wins:
Back bet profit £400 (plus your initial stake is returned).
Lay bet Loses £397.96, this is calculated as £102.04 x (4.9 -1)
So overall a profit of £2.04
Any other result:
Back bet loses £100
Lay bet returns £102.04 profit
So overall a profit of £2.04
So when price moved in your favour, using green stakes for the lay, you make a profit of £2.04 regardless of who wins.
Stop losses
Regarding the consequences of using a stop loss, the above examples 2 or 4 apply. So if using level stakes for the stop loss bet, you only lose overall if the selection wins the event. However if using green stakes for the stop loss bet, you will effectively spread the loss over the entire market, thus losing a small amount regardless of the outcome.
Kind regards,
Gavin
