Cash out has become very popular over the last few years. It started as just pure cash out where punters could lock in a profit on a bet if odds had gone in their favour. If the team they had backed was leading the game, then rather than risk it all by waiting until the end, a price is offered by the bookmaker to take some profit now, forfeiting the chance of a payout at full odds should they go on to win.
Of course locking in a loss is also possible…not that anyone does it!
Now the overwhelmingly important fact about cash out is that the bookmaker will offer you a price that he wants you to take…and you can be sure that if he wants you to take it, it is generally not going to be a good one. You will unlikely to ever get value for your cash out as the following example shows.
I placed a bet of £100 at bwin for Seville to qualify in the Champion’s League against Leicester, odds 9/20 (see I do bet my own tips!). I am at this exact moment offered a cashout of £104.14. A profit of £4.14.
Betfair currently have a price of 1.33 to lay, and assuming a commission of 5%, if I were to lay £113.28, that would lock in a profit of £7.62, substantially better than the cash-out from bwin . I appreciate that many may not be familiar with laying and I will be providing blog post on that and exchanges in general very shortly, together with a bit of the maths (in case anyone likes that kind of stuff?!), but for now if you are interested in comparing your cash-out offer with a betfair price lay, then you can do so with oddschecker’s useful calculator . Feel free to check my above numbers too!
So why do people take cash out, and why should you?
2) Long-term market. Only an ostrich with head in sand would have failed to have seen the story of last year’s Premiership, with Leicester coming from rank outsiders to wrapping up the league with time to spare. Whilst many column inches were spent on their seemingly impossible story, almost as many focussed on the ‘5000/1’ bets, who had them, what to do with them and should they cash-out?
If you were lucky enough to have had £10 on Leicester at that price then you would have been on for a £50,000 win. Come February and odds had dropped to 6/4 and then further still, so bookmaker would have been offering a cash out of around £15,000. The optimal solution here would have been to refuse cash out and instead lay Leicester to win the Premiership on a betting exchange (effectively back them not to win the title), but in order to do that, and to win more than the £15,000 offered by the bookmakers, you would have needed to tie up an extra £30,000 or so. Deep pockets needed!
It can be explained by the fact that cash out offers you 2 sides of the same bet, not tying up any more funds, but using an exchange requires 2 separate bets, therefore requiring you to stump up extra.
3) No other options available. It is entirely feasible that you cannot replicate the cash out offer from a bookmaker by placing the bet elsewhere…because no-one else offers that bet!
4) Lack of understanding of the options available. This is mainly about knowing how to use a betting exchange, and in particular how to lay and what laying means. I’ll be writing up some blog posts in the near future as a knowledge of the workings of an exchange is essential.
When I started thinking about cash out, my initial though was – why would anyone ever take it? The odds are almost always going to be poor. But the more I considered it the more I realised that it isnt always about the odds; convenience is a great asset, people may not want to tie up even more funds for an extended period, and unless there is a lot of money at stake, laying may not always be worth the hassle.
Maybe cash out isnt that bad after all?!