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Does Risk and Return Matter in Betting?

As with most things in life there is generally a tradeoff between risk and return. For example, do you stick to safe investments and take a small amount of interest, or do you find a risky, hi-tech share on the stock market in te hope of achieving much more handsome returns?

Similarly, in live betting you will find the concept of risk and return very important.

Generally Speaking..

Most of the time the more risky your bet is the, the larger the potential winnings will be. Why is this? Well as the bookmaker sees it, there is less chance of the bet actually winning, they therefore don't mind paying out more if it does win.

The flip side of this is that punters demand a larger payout for riskier bets since they too realise the bet has a smaller chance of winning.

Significance in Live Betting

The same rules as stated above apply to betting in running. The more risky your bets are, the more each bet could win, but the less likely it is to win. Lets assume you begin by backing the favourite but then the favourite starts losing so their odds lengthen and the outsider's odds begin to shorten. If you fear that the favourite may not be able to start winning again you could choose to reduce your exposure (ie make your bet less risky) by putting a covering bet on the outsider. By doing this you have reduced your potential loss if the favourite goes on to lose, we can therefore say the bet is less risky. However, at the same time, you will also have reduced your potential winnings if the favourite goes on to win since you will now have to pay your covering stake on the outsider.

To sum up, you reduced your risk, and at the same time your potential return also reduced.

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