Overround & book percentage

The most quietly useful calculation in the shop

Every bookmaker's book sums to more than 100%. It has to — the difference is their margin, the theoretical edge built into the prices. A race in which the implied probabilities add up to 115% is quoted to a 15% overround. The bookmaker, if they have priced every horse correctly and lay the right proportion of each, is guaranteed that 15% on total stakes whatever happens. Your job, if you are serious about this, is to find races and selections where that margin has been misallocated.

A low-overround race — typically the big Saturday handicaps, or a high-profile Group 1 — is one where the bookmakers are competing hard for money and have squeezed their own margins down to 105% or even less. A tight book is telling you that the professional money has already gone in and the prices are close to fair. A fat book — anything above 120%, which is almost all small-field mid-week handicaps and most jumping cards outside the Festivals — is telling you the firm has drawn prices conservatively because the market is thin.

Where the calculator earns its keep is the value-ratio column. For each runner, it shows the quoted price divided by the fair price once the overround has been stripped out. A ratio above 1.0 means the bookmaker has priced that horse more generously than the rest of the book implies; a ratio below 1.0 means the horse is being priced short relative to its notional share of the book. This does not, of course, mean the short one will not win — only that you are being asked to accept less than a fair share of the margin for backing it. Over time, consistently backing ratios above 1.0 at a price you have independently judged to be fair is very close to the entirety of what "betting for value" actually means.