Cash Out - Is It Worth It? - What You Need To Know
The emergence of the Cash Out feature in the 21st century has been deemed revolutionary. However, when we delve deeper, there are various flaws with the concept, and punters should be aware of these going forwards.
Cash Out – Is It Worth It?
Firstly, if somehow you’ve stumbled on this post without knowing what Cash Out is, then we suggest reading our guide to Cash Out betting that also includes a list of bookmakers that currently offer the feature (of which there are now many). In essence, the Cash Out function allows you to take a set return for your bet, before the event has ended. If you opt to Cash Out, you receive the return immediately, regardless if your selection goes on to win or lose.
What You Need To Know
The Cash Out feature has drawn controversy for a variety of reasons, namely the poor value offered, and from a more ethical perspective, the way the feature players on the emotions of punters.
When offering a Cash Out sum, the bookmakers’ edge is actually doubled.
When cashing out, you are more often than not getting poor value. When offering odds, bookmakers have an edge. In its basic form, this is the concept that the implied probability of a price does not reflect the true probability of the given outcome occurring. As a result of this, bookmakers make money in the long-run. When offering a Cash Out sum, the bookmakers’ edge is actually doubled. Not only do they have their edge from the original bet, but they gain a further edge via the probability they imply through the cash out amount. This shows that the more the Cash Out function is used, the more likely the bookies are to make money. The next time you see your bog-standard Cash Out advert on the TV, you know why!
Much criticism has been thrown at the Cash Out button for the way it entices its users. You’re generally placing a bet because you believe that selection is good value. The Cash Out feature can guilt you into taking worse value. When there is money on the line in fast changing events, you probably won’t be thinking rationally and this is unethical from all angles. Furthermore, for bettors that aren’t keen on the Cash Out option, there is no mechanism to remove the feature. Open a betting app and you can’t miss the feature!
If You’re Going To Use Cash Out, When Should You?
Despite the negativity, the Cash Out option is widely used and remains a prominent part of modern betting.
If you are tempted by the Cash Out button, it may be wise to take the action consistently. If you do it consistently, both when winning and losing, you are less likely to be losing value as you’re taking reduced losses as well as reduced winnings.
So, if you tend to Cash Out winning bets early as you fear the tense ‘squeaky-bum time’, you need to be cashing out your losing bets for reduced losses too. As we’ve already established, if you Cash Out and your selection goes onto win, you are getting reduced returns and aren’t receiving full value. If you reduce losses, you are going some way to compensating for this.
Take a full-time Trader for example. The Trader will hedge his selections consistently, both winning and losing and will do so at pre-determined points. This ensures consistent and sustainable returns.
When Is The Cash Out Service Best Used?
When you have an edge and see a selection that is overpriced, now is your time to take advantage. It’s often the case that you’ll fancy a bet to outperform its odds but not win. In this case, you’ll often be able to cash out as In-Play the market will realise the outcome is now more likely to occur than it originally was. However, with the emergence of the Betting Exchanges offered by Betfair and Matchbook, backing and laying your selections could prove a more profitable option.
The Cash Out feature is just another way for bookies to gain an advantage over punters. They gain an even further edge through the feature and thus bettors receive poor value. If you are keen to trade a bet out early, take a look at the exchanges.