How Do You Price Up a Horse Race???

[WhyAlwaysMe]

rphi6876:


Yeah pricing the event is the hard part, as thats where your edge comes from. In racing the most common quantitative method is using a multinominal logit regression where the input factors are generally pretty proprietry. Such a model will give you the probability of each horse winning. But you are correct that while the model might tell me that a horse has a 68.2% chance of winning in reality its probably somewhere between 60%-75% and is really anybodies guess. To account for this uncertainty people use fractional staking- its essentially like saying I guess the probability of winning is 68% but I know there is a bit of error in my guess.

Anyone know what this means?

So in layman's terms how does this work? The oddsetters talk about 'forming a tissue.' That's about as much as I know with horses. I understand they are cutting a percentage cake up and obviously there are the ratings but how does the process happen so to speak?

[Cran]

Anyone know what this means?

So in layman's terms how does this work? The oddsetters talk about 'forming a tissue.' That's about as much as I know with horses. I understand they are cutting a percentage cake up and obviously there are the ratings but how does the process happen so to speak?

Each horse gets a score (using whatever method/system you have) and from the scores you can work out the odds for each horse:

horse_odds = 1 / ( horse_score / total_score )

That is your tissue prices... simples...

Then you compare your odds with the available odds and see what 'you think' is value...

[marra]

like Cran says...Plus putting hours in reading Racing post form early in the morning then finding a fast way to eliminate about 80% of the field