The Hidden Cost Of Slippage

There are lots of hurdles to overcome before you can expect to turn a profit from following a tipster. First and foremost of course it’s the tipster’s skill to identify value prices. Secondly you want the tipster to advise his bets at prices from a reputable bookmaker who does not restrict their customers. Additionally you need to deduct subscription fees from potential profits and bet placement fees if you happen to place your bets automated through a bot (like I do). Something that is not so obvious and sometimes hard to estimate is slippage, which also has a hefty influence on your bottom line.

Slippage is the difference in profits between betting at advised and betting at obtained prices. Say, you follow a tipster and his yield across 1000 picks is +4.50%. Let’s also assume that the actual yield you have achieved from these bets (by sometimes being forced to take lower odds) is +3.30%. Your slippage would then be 1.20% (4.50% – 3.30%).

Please be aware that slippage only affects winning bets. For a losing bet using 1 point level stakes your p/l is always -1, regardless of the odds you took beforehand.

Consistently taking lower than advised prices can eat massively into your profits as we will see below. In fact it can be the difference between winning and losing depending on the popularity of the tipster. Generally speaking the more popular the tipster the greater the slippage will be.

But just how much of slippage are we talking about? I will try to quantify this figure below.