Cash Out Betting has become increasingly popular in recent times, with not just Betfair offering it as an option for in-play punters but now many bookmakers as well.
Bet365, Paddy Power, Coral and Bet Victor are among the bookies that now offer the cash out option should you want to close out your position prior to a match concluding.
However, whilst on the surface this seems like they are doing a favour to us punters, as ever with the bookies, there is a nasty catch…
Cash Out – How it started
Cash out originated on Betfair a few years ago to assist the many thousands of traders who regularly used Betfair’s interface to back and lay selections in running. Rather than having to calculate their position manually and be thrown into a bit of a blind panic if they wanted to get out of a position quickly, the cash out button automatically worked out not only the amount required to close out a position but the best way to do it.
Thus you had a beautifully simple way to trade out with just one click of a mouse and all the headache of calculating odds and stakes removed. Or perhaps you just wanted to take a profit on a match because you didn’t want to sit through an agonising last 20 minutes whilst your side clung on to a 1-0 lead. Either way it was a great enhancement to in-play sports trading.
Some of those who had bots or other means to trade out their positions complained that the introduction of the cash out button removed their advantage over other bettors, but Betfair’s goal is of course to provide as high quality a service as possible and stay ahead of its competition and with the cash out option, it had very much managed to do this.
Don’t Get Caught Out
Used properly then, Betfair’s cash out button can be very useful tool for both bettors and traders. Anyone who has got caught out by not being able to trade out their position before another goal is scored will see it as a godsend.
However, there is the potential to get caught out with Betfair’s cash out. Just after a goal has been scored, the market will be resettling. The cash out button will automatically work out your liabilities to trade out your original bet.
However, in those first few seconds whilst the market resettles, the odds can often be completely skewed and the liquidity poor. Thus you will get quite poor value for your cash out and what should be a winning position can actually be turned into a losing one by the cash out option.
So make sure you wait a few additional seconds until the market has settled. Check the back and lay sides of the market are close together in terms of odds and there is good liquidity in the market as a whole.
This will make sure you don’t get caught out by accepting a worse return than you are entitled to. After a certain amount of trades you will also come to learn what kind of a profit or loss is incurred after a goal is scored so should have an idea what is acceptable.
The Bookies Join the Party – But They Aren’t Your Friend
As ever, the bookies didn’t want to get left out of Betfair’s punter-friendly innovation so decided to add their own “cash out” option to their websites.
However, whilst this offered punters the chance to close out their bets before an event concluded, it did not offer quite the same value as Betfair’s cash out option.
The bookies make money by operating what is called an “overround.” This means if there was an event with 2 possible outcomes and a 50/50 chance of either happening, like the toss of a coin, the bookies should offer you even money about either heads ot tails. But they don’t – they offer you 10/11, or if they are really stingy, then 5/6.
So if you kept betting with them at those odds ad infinitum, you would be mathematically guaranteed to lose.
It may seem harsh, but the bookies would respond they need to do this to stay in business or there would be no point in them operating.
Now the percentage that events are in the bookies’ favour is called the overround. In most events the bookies will have at least 10% overround but in some events it can be as much as 20% and for in-running events it can be truly atrocious – I have seen 50% in the bookies favour on some occasions – an absolute insult to us punters.
The Sting In the Tail
This is where the sting in the tail comes. When the bookies offer you that cash out option, it has a juicy percentage of overround calculated into it.
It is not like Betfair, who will automatically offer you the very best deal they possibly can. The bookies will take their slice of the pie and then some. This is cloaked under the attractive disguise of a “cash out” button and looks great when you see it can mean a nice profit before a game has even finished.
But don’t be fooled – they are probably already operating at a poor overround (from the punter’s point of view) as it is in-running.
And they will make the cash out favours them and not you. What you are better off doing – presuming you have the time and things set up ready for this – is to calculate your position and trade out the necessary amount on Betfair. You will almost certainly get better value.
You may well have given up a 10% edge in backing with the bookies in the first place but you will probably be giving up another 10-20% with your cash out option, so in total may be giving 30% to the bookies!
Something to think about the next time you consider hitting that “cash out” button…