5/21 Blog

 Section/Factor 2 

Profit and loss index analysis

Both profit and loss and Kelly Index are based on the analysis of the proportion of the public trading, to analyze the profit model of each large institution. Compared with the latter, the former gives stronger and more direct feedback to the profit situation of the institution. The process of calculating the profit index is actually the process of the cost accounting of the institution.

I. Important parameters of profit and loss analysis

This parameter is the proportion of public transactions of win, draw and lose results. According to this important parameter, the calculation formula of profit and loss index analysis can be solved.

Ii. Profit and Loss index calculation formula

The calculation formula of profit and loss index is actually a copy of the financial accounting model of most organizations. The specific formula is as follows:

For example, 20100504 (This is the date of game) Wolfsburg vs. Hoffenheim (Background info: Wolfsburg is much more better than their opponent), 

libo: Wolfsburg played at a level where the percentage of bets was 52 percent and the average return rate was 90 percent, assuming 100 yuan(CNY) per bet. According to the formula, 90-52%×1.83×100=-98.16. According to the calculation results, for every 100 yuan of bets, the organization needs to pay: 52%×1.83×100=95.16 yuan, and the profit and loss index is 90-95.16=-5.16 yuan, so Wolfsburg wins the game, the organization will lose 5.16 yuan for every 100 yuan of bets.

And that brings us to a crucial question. By any measure, the BundesligaSince you have to make a loss, so, what is the practical significance of the profit index to us?

It is assumed that the institution makes profit by earning water money for this game (i.e. the principle of no betting). We assume that the total betting amount of this game is X and the proportion of winning betting yards is Y, then the proportion of winning betting yards of the corresponding home team is (100-Y), and the formula of total profit of the institution is (100-Y) ×X. Also take the Bundesliga as an example, according to the actual situation to calculate. On the basis of the resumption of Betfair's transaction data, the following conditions can be set, assuming that the total bet amount of Ladbrokes is HK $100,000:

Percentage of home team punts: 52% Y

Percentage defeated by home team: 48%

Assume that the total amount of coding is 10,000 yuan

Total profit of the organization: 48%×10,000=4,800 yuan

We can conclude that the organization can earn 4800 yuan from the results of the tie and Huo Cun win, and this part of the income should be used to make up for the loss of the Wolf fort. According to Wolfsburg's ratio Y, excluding the principal contained in the water level, this part of the compensation is returned as: X (water level -1) Y. From this, a new profit and loss formula is derived:

The profit and loss of the mechanism: 0.90× (1-Y) × X-X × (water level -1) ×Y

According to the formula, the calculation is:

0.90× (1-0.52) ×10000- (1.82-1) ×0.52=×10000=56

After the derivative formula is calculated again, it can be seen that the actual profit of the organization in this game is 5.6%. Imagine, a single game can reach nearly 6 percent of the account, visible Wolf fort play is completely acceptable results.

Total Hr(On plane):5-6

This formula is a little hard to understand