Margin

Overview

TRADE360 offers two methods for controlling margins on odds:

1. Manual Margin – Allows full control over how margins are applied to odds, giving you direct control over pricing.

2. Competitive Margin – Dynamically adjusts margins based on provider data, ensuring competitive pricing.

Both options help you manage risk, optimize profitability, and adjust pricing strategies according to your business needs.

Multi-Applicative Formula

TRADE360 applies margins using a multi-applicative formula, ensuring consistent proportional adjustments across all bet prices. Instead of applying a simple linear addition, the system scales the fair price dynamically, maintaining a balanced market probability.

The multi-applicative formula ensures that the applied margin scales proportionally based on fair odds rather than adding a fixed value. This prevents distortions in the probability distribution of bets while keeping pricing consistent.

Manual Margin Calculation

The Manual Margin option allows direct control over how odds are adjusted, giving you full flexibility in setting margins.

Manual Margin Settings

• Margin set as "0" → The output will be Fair Odds. You will receive the average of fair prices calculated from provider odds, ensuring a total market probability of 100%.

• Margin set as greater than "0" → The output will be Fair Odds + Margin. TRADE360 will manually set a margin for the fair price calculation, adjusting the final odds accordingly.

Manual Margin Calculation Formulas

1. Start with Raw Provider Odds - TRADE360 collects the original odds from all providers.

2. Calculate Fair Odds (Remove Provider Margins) - TRADE360 removes the providers’ built-in margins and calculates the true fair odds based on probability.

   1. Fair Price Formula (Margin Cleaning):

      • $\text{Bet Fair Price} = \text{Bet Current Price} \times \left( \sum \frac{1}{\text{Bet Price of all market bets}} \right)$

      • Example for 1X2 market: $\text{Fair Price}_{1} = \text{Price}_{1} \times \left( \frac{1}{\text{Price}_{1}} + \frac{1}{\text{Price}_{X}} + \frac{1}{\text{Price}_{2}} \right)$

3. Apply the User-Defined Margin

   • TRADE360 applies it to the fair price using this formula:

     • $\text{Bet Price (with margin)} = \text{Fair Price} \times \frac{100}{100 + \text{Margin (\%)}}$

     • Example: 1X2 market with a 5% margin $\text{Price}_{1\text{(with margin)}} = \text{Fair Price}_{1} \times \frac{100}{105}$

4. Final Odds Are Sent to You

   • Once the margin is applied, the final adjusted odds are sent for use in your betting markets. However, several factors can further influence the final odds beyond just the margin calculation:

     • Rounding Rules: The adjusted odds are rounded appropriately based on predefined rounding logic, which may slightly alter the effective margin.

     • Odds Ladder: If an Odds Ladder is enabled, the odds will be adjusted to fit within the predefined ladder steps, potentially modifying the final odds.

     • Min/Max Limits: If minimum and maximum odds constraints are set and “Keep Price in Range” is enabled, the odds will be adjusted to remain within the allowed range.

     Since these factors can all affect the final odds, the actual margin applied may differ slightly from the calculated margin due to these post-processing adjustments.

   • The adjusted odds are rounded appropriately and sent for use in your betting markets.

Manual Margin Special Use Cases

Margin Application for Open Bets Only

• The manual margin can only be applied if all provided bets in the market are open.

• If some bets are suspended, TRADE360 cannot fully clean and reapply the margin.

• For multiple bets market families (e.g., Correct Score, Number Of Goals, Highest Scoring Period, Correct Number Double Digit),

  • TRADE360 will calculate the margin only using the available open bets.

  • Suspended bets are excluded from the calculation.

Double Chance Markets

• In double chance markets, the total probability is 200% instead of 100% (as in other markets).

• Therefore, both margin removal and margin application are multiplied by 2 to ensure accurate calculations.

Margin = 0 Setting: Handling Suspended Bets

• If the manual margin is set to 0 and a bet is suspended, TRADE360 will:

  1. Calculate the average odds of the remaining active bets.

  2. Remove the margin from this adjusted average to ensure the final odds remain fair.

• This ensures you still receive fair odds without any added margin despite provider suspensions.

Competitive Margin Settings

The Competitive Margin can be adjusted within the following range:

• Minimum: -99%

• Maximum: 1000%

A Competitive Margin of 0% means you receive the average fair odds across all providers, similar to the manual margin setting of -1 in the previous margin framework.

How Competitive Margin Works

1. Calculate the Average Provider Margin - TRADE360 first determines the average provider margin based on the odds supplied by all available providers.

2. Clean the Provider’s Margin - The provider’s margin is removed to establish a fair price for each bet.

3. Compute the Average Odds - TRADE360 calculates the average fair odds from all active providers.

4. Adjust the Average Provider Margin by User-Defined Percentage - Your Competitive Margin setting modifies the adjusted provider margin. If the adjusted margin reaches 99% or higher, it will be capped at 99% to maintain reasonable market conditions.

5. Add the Adjusted Margin - The final step incorporates the adjusted margin into the fair price, determining the final odds.

Competitive Margin Special Cases

If the Margin Cannot Be Removed

In situations where a provider suspends a bet, preventing margin removal, TRADE360 will use the average raw odds instead.

If the Competitive Margin Reduces the Market Below 100%

For standard markets, if the Competitive Margin setting forces the total market probability below 100%, TRADE360 will normalize it back to 100%.

$$\text{Normalized Fair Price} = \frac{\text{Fair Price}}{\sum \left( \frac{1}{\text{Fair Price of all outcomes}} \right)}$$

For double chance markets, where the probability normally sums to 200%, TRADE360 will ensure the probability remains at 200%.

$$\text{Normalized Fair Price}_{DC} = \frac{\text{Fair Price} \times 2}{\sum \left( \frac{1}{\text{Fair Price of all outcomes}} \right)}$$

Old Margin to Competitive Margin Mapping

For all existing customers: Old margin = -1 has been migrated to Competitive Margin = 0%, which reflects average provider odds.