Markup Questions
I understand staking as it works on PTP with cuts, stakeback, and cake. This has led to confusion and disagreements when discussing/making stakes with those who are not.
Would anyone mind clarifying how staking using the markup method works?
No cuts? Just 1% paid per 1% invested? From the total profit?
When in profit does a horse pay back 1% per 1% even if a markup is charged to buy the shares?
Unless otherwise stated is it assumed that there is no stakeback or cake?
Thanks
Would anyone mind clarifying how staking using the markup method works?
No cuts? Just 1% paid per 1% invested? From the total profit?
When in profit does a horse pay back 1% per 1% even if a markup is charged to buy the shares?
Unless otherwise stated is it assumed that there is no stakeback or cake?
Thanks
Comments
Markup is the horses money and only needs to be accounted for in refunds for games not played.
There is no stakeback (as it's already included in the winnings) and no cake (makeup to the rest of the world)
Also for you , if you want to translate from PTP to 2p2 terminology:
Markup = 1/PTP Backers Cut (80% backers cut = 25% markup)
Just to be sure I'm getting this is this accurate?:
Horse charges 1.25 markup for a $100 event.
Investor purchases 1% for $1.25
Horse cashes for $1000
Horse owes investor $10 for 1% share.
I've seen this math on 2p2 but feel like i'm missing something here. An 80% backers cut is in favour of the backer, its used to attract backers to high risk baps and gives them a bigger piece of the profit. From what I am understanding markup is in favour of the horse. The horse pockets the markup win or lose. While the backer receives the same share of the profit, markup or not.
Maybe I having a brain cramp trying to wrap my head around this but I'm not getting how this equation is considered to make things equal between the two different systems?
HAHAHA, I am still confused about this myself, westside explained it to me once, and I got it at the time, but now lost again on this language.:D
When horses apply for a stake on PTP yes, normally all the action is owned by 1 backer. However, if a horse runs a BAP he/she can choose to sell any amount of action they choose.
The horse pockets 100% of whatever shares they own. The backer receives the percentage of the cut on the value of their shares only, based on profit/bankroll, not winnings, less stakeback and mu/cake.
Ex.
Horse runs a $100 BAP
Shares $1 each with 80/20 backers cut.
Horse cashes for $1000
1 share is worth $9. 1% of $900 bankroll. ($1000 winnings - $100 buy-in)
An investor with 1 share would be paid:
{[ $9-$1(stakeback)- any makeup (I’ll say $0)] x 80%} + $1 (stakeback) + $0(makeup)
[$8 x 80% ] + $1 + $0
$6.40 + $1 = $7.40
The remaining 20% of the $8 (profit after stakeback and makup) goes to the horse. $1.60
In this example which is supposed to be equal to a 1.25 markup the horse earns $1.60 per share. Still not getting markup=1/backers cut.
I am aware this shows the ptp method as favouring the horse and is opposite of what I said in my last post. My brain hurts. Lol
Guess each system has its advantages/disadvantages depending if you are a horse or investor, expected ROI, etc. Not sure how to compare them.
Do any stakers or horses have any input why they prefer one system to another?
Pretty sure with this example you are referring to PTP instead of BAP at the top if you are using this calculation.
This is why I ever just want to do 50/50, make it simple. as for makeup crap I don't believe in it, I see it only causing problems.
Simple and have everyone have fun!
This is just me.;)
It is an example of how a BAP would run on PTP.
potd . . . :d
Agree if a horse is able to get markup it can be a good thing to cover expenses and such. I can see pros and cons to both systems.
However, I don't see any benefit for a horse to offer shares at even using the markup system. (Unless it's the only way they can attract investors) The horse will be giving 100% of the winnings away on each share sold. Instead of only an agreed upon cut. Seems like a crappy deal for the horse who could sell shares for a 90%+ backers cut w/ no mu. 100% cuts are def not usual.
Don't forget under the PTP model, you are sometimes selling 100% of the action, so that is why you need the backers cut.
Under other methods, you would never sell 100% of yourself.
Player sells 50% action on $1k US based tournament at 1.2.
If he doesn't cash, it cost him $500 of his own funds to play the tournament less $100 markup on BAP (1.2 x 50% x $1k) and $300 likely recovered in W/H (assuming cashed in other US tournaments). Total cost to player, $100 ($500-$300-$100).
If player cashes for say $5k, he pays out 50% of $3,500 (70% x $5k) or $1,750. He keeps the other $1,750, plus can try to recover the other $1,500 in W/H. Also can deduct the cost of the tournament.
OK- makes sense
Thanks for the example. I was never quite sure how w/h was accounted for.
Just curious-can a player recover travelling costs in w/h?