I am having a problem calculating an adjustment figure so that even NET profits would be made over two different trading markets, i am currently entering it manually by a trial & error process, and i am sure there is a calculation that can be done to speed this process up!!
I have a total of 100 units that i can trade with. I back the following outcomes on MARKET 1 with the corresponding odds:
A : 9.6
B : 12
Then on MARKET 2 i back another outcome at:
C : 1.3
I have calculator that tells me to stake the following spread of 100 units for an even gross profit:
A @ 9.6 = 10.89 units
B @ 12 = 8.71 units
C @ 1.3 = 80.40 units
Using these stakes i come out with a GROSS profit of 4.52 units whatever the outcome. However the NET profit is different, because we have to allow for commission charges (5% or 0.95) which are going to be different depending on the outcome. The commission is charged on profits for each market.
PLEASE NOTE: If i win on MARKET 1, I cannot win on MARKET 2 & vice versa.
So, the outcomes below show the net profit across the 2 markets:
A = 0.28 units ----> =(((9.6 - 1)*10.89)* 0.95) - SUM(8.71 + 80.40)
B = 0.28 units ----> =(((12 - 1)*8.71)* 0.95) - SUM(10.89 + 80.40)
C = £3.32 units ----> =(((1.3 - 1)*80.40)* 0.95) - SUM(10.89 + 8.71)
As you see there is a difference. This is because the profit you made on MARKET 1 is a lot more than the profit you make on MARKET 2 so therefore the commission charge is higher. I want to equalise these profits by adjusting the MARKET 2 stake, however i dont know how to do the calculation.
By trial and error i find that 2.36 units is the adjustment i would need to make to MARKET 2 stake so that whatever the outcome the NET profit would then be 2.64 units.
If anyone could shed any light on how to calculate this i would be grateful.