We'll try to explain!
More and more, we hear through social networks that using the cashout button is trading! Really? What happens if the cashout button disappears? What is cashout?
The cashout button is a quick tool to close a bet, it can be very important in an emergency, whether for profit taking, taking a loss, or simply because you need to get out of the house quickly.
If you are looking for a cashout tool, the Wagertool Cashout App is free. LINK HERE
How does Cashout work?
Let's imagine, for simplicity, a tennis market, between Nadal and Federer (We use this simplification so that the bettor can only choose between two hypotheses: Nadal or Federer.)
For the sake of simplicity, let's assume that each of them has a 50% chance of coming out the winner.
In this situation, the perfect fair odd would be 2.00 for each of them.
Let's assume that the bettor thinks Nadal will win and bets €100 on his victory.
Nadal Victory - €100 bet at the odd of 2.00 - €100 risk for a return of €200, equivalent to €100 profit.
At this point, the player decides to exit the market by cashing out. The way this is done is by betting €100 on Federer's victory.
Final situation?
0€ risked for zero return and zero profit.
But actually what happened?
We should note that many times, the cashout button doesn't do the same thing as the odds themselves would if you were to do it manually.
Further on we can explain how to do manual cashout accounts.
At this stage, stop to think, if you didn't know the mechanism behind the cashout, why were you using it? Always question yourself!
How can bookmakers profit and use cashout?
Let's imagine then odds of 1.90 for both Nadal and Federer.
The player puts €100 on Nadal:
€100 risk for €190 return and €90 profit.
You decide to cashout and limit your risk.
You must then put €100 on Federer.
What happens?
Bettor risk goes to zero. Whatever the event, you will always lose €10
€100 * 1.90 = €190 less €100 risked on Nadal and €100 less risked on Federer = €10 negative.
That negative €10 would be the bookmaker's profit, however, be very careful if this is the value that the cashout button offers, it might not be.
Are there more cashout failures?
Another flaw of the cashout is that, once the user clicks on a button that says an amount, he is not actually placing a sports bet at odds, he is accepting a profit or loss amount that puts an end to his risk. He doesn't know the implied odd of that cashout amount, he can only admit that it's the market's.
You must understand that all houses win with betting volume, when you close a position, you are most of the time limiting the house risk and accepting an odd that is less than the probability of the event, so use it with caution.
But without cashout button is it impossible to cashout?
No, it's not! All that is required is for the bettor to make their own calculations, use formulas and know what to bet in order to finalize their risk in the market at that moment.
Attention!
If you use Betfair, you will sometimes get better cashout amounts using software. It may seem indifferent, but the sum of all trades will be important to make a difference.
Always be very careful if your betting partner offers a cashout amount equal to the manual account, if not, you can choose to calculate your output manually.
Cashout Calculator!
