Stuck on what betfair premium charge is? Don’t know how it works or who really pays it? Watch this video.
For some time people have been asking me to do a video on the Betfair premium charge. I started this process over a month ago, but it’s proved difficult to specifically summarise all its aspects, so I’m going to break it down into its components parts.
I thought it would be interesting for starters to look at the difference between trading and gambling and how they produce very different results when you take into account commission. This is the imbalance that the premium charge is supposed to address.
In reality, very few people pay the premium charge from all customer and only a tiny number the higher rate charge as their profit is not high enough.
There are many reasons for this that we will explore in a different video. We will also explore in that video whether you could be affected and how it’s changed what I do and how it’s affected me.
It’s interesting to note that both Matchbook and Smarkets have now adopted a similar model for premium charge when sports trading using trading software.
Vídeo Completo
So how does anyone make a living from trading anymore. Im getting better and better but this seems like the dreams of quitting my job seem totally unrealistic now. 😑
Hi, are there any instance when the higher rage charge does not kick in even though you have net winnings less commission of over £250K?
If I gamble with the money I made trading in Betfair casino, will I still get charged the premium charge if I win/even in the casino?
Thank you
JUST TO TAX YOUR TAX FREE PROFITS SO BETFAIR CAN PAY THEIR BILL WITH HMRC
YOU LAY 10 HORSES A DAY AT 100/1 THATS A THOUSAND POUND RISK ADAY TO WIN A MERE £10 , AFTER 250 DAYS YOU HAVE A TURNOVER OF £250 K BUT ONLY PROFIT OF A MERE £2500 WOULD HAVE TO PAY PREM CHARGE ANYBODY KNOW !!!
Hi Peter! Been searching and searching but keep getting distracted by other videos I just have to watch now. Can you put links to the rest of the videos in this series. Cheers!!
Hello Peter, Love all your videos they are brilliant , however i disagree slightly with this , so you on the left hand side (gambler) assuming the risk reward is based on the odds at time of placing, and, rate of return is based upon such odds (100pct i.e double your money), and, yet, on the right hand side (trader) you make the big assumption that you ALWAYS return 10 pct !, by definition right hand side (trader) must lose 10 pct of the time (put it another way do the simulation again but with ten thousand rows !)
Its all about RISK , the gambler has small fixed risk of cash loss (with a high chance of losing) , you , on the other hand have a larger risk of cash loss (but with a lower chance of losing)
Guess its all about what risk/reward ratio your happy with
Regards
J
Hi Peter – I don't get it how you come up with the commission on the "GAMBLER" side – how it 5.5% ( I understand you can just gambling on an exchange )-why I would do this when I can use a bookie with lower odds but no commission – Why someone will gamble on an exchange – just to pay more commission? – Sorry but this explanation doesn't hold – you compare something that does make any sense ( is nothing to be balanced- in an ideal world there is no gambler on the exchange ) – The ugly truth is – you pay this commission to be able to make more money ( a bookie will close you account very fast) – ( BF make the same amount of money as a bookie or a little bit less – and you are allowed to make as much as you can).When you pass that level of profit you are so confident in you that you don't rely care about commission. (I believe at that point will be no liquidity to make money to worth the stress and time)
You didn't explain how to avoid it!
You're very wrong on this.You need volatility to make money that's why you push to trading.All that matter is how much money you take out …the charge will be there forever and is nothing to do about.
Hello Sir,
Can you explain to me what is meant with 250 markets? If I only bet on tennis (who's going to win), does that count as 1 market? And what about tournaments? Are different tennis tournaments considered different markets? Look forward to hearing from you.
Can you do a video on the business side of running a Exchange. What’s the business reason for a premium charge? Is it just monopolistic greed? Increased data load charges? It seems stupid thing to do when you can bet on smarkets now. There losing liquidity all the time.
Do you need to consider this premium charge when you decide when to lock in profits?
Excellent video, Peter.
You've not mentioned implied commission for losses incurred. Any reason for this?
No mention of the fact that Zeljko Ranogajec admits that he dosen't pay any PC. Harry Findlay went public and said it was 1.5% commission and NO Premium Charge. Checkout Zeljko's offshore HQ here http://www.newfield.co.im. Premium Charge is being used to subsidise other "special" customers.
Hi Peter
Sorry if this is the wrong place to post this, but does this trade look familiar to you? 😀 <link removed>
Because it's the same trade from the intro of this premium charge video, the guy literally said "this is one of my best trades this year, contact me if you want to know more". For what nefarious purpose, I don't know, but he is claiming full credit for the trade and promises to make a lot more videos in the future. Just thought I'd bring it to your attention in case you want to report him for copyright infringement etc, or at least have a chuckle. Figured I'd report this here instead of on the forum, for less attention , but lmk if you want the link from my comment removed.
Surprising to see how high % of net winnings random gamblers pay especially when 5% sounds so reasonable. The top premium charge rate of 60% for traders is still greedy though. If someone reaches it and makes a consistent £2000 per week, then are they paying over £60k in premium charge per year out of their £104k income? I'm sure the extra load they put on the network is nowhere near costing Betfair £60k to justify it. I'm sure this puts a lot of people off or makes them turn to other exchanges/markets/income streams. God help us if traders are ever taxed on top of PC
I've just been entered into the Premium Charge. Confused the hell out of me.
You should be a politician talk forever, answering nothing
You may well include this in the separate video, but I think my biggest bugbear with the premium charge is that threshold limits have never moved. Eventually more people will hit those thresholds, and they will also be making theoretically less per year than those already on premium charge bands. Paying premium charge (even at just 20%) is very different when you're making tens of thousands per year than those making perhaps just a £1,000 of so. Generally though, I don't think it's something to worry about until you start paying – and even then you get something of a grace period.
Eye opener. I've no chance of ever being charged the pr, unless they change the structure massively.
Do traders just create shorter prices in the market with all the money placed on certain horses