The betting system is not as popular among bettors as express betting. It's a more complicated calculation. In this article on the "Rating of Bookmakers" we will analyze what the system is, how it is calculated and how to place a bet on the system.
System - a combined bet consisting of parlays. Unlike an ordinary parlay, the system can win even if you lose individual selections in a combination.
The main characteristic of the system is its dimension. It is written with two numbers. For example, "3 out of 4". This means that the system consists of 4 selections, which are combined into accumulators with 3 selections each. That is, there will be 4 combinations, and at least 3 selections must win for the whole system to win. The bet amount is distributed equally among all possible combinations in the system.
How is the rate system calculated?
For example, let's take the already mentioned "3 out of 4" system. Let's say you bet 1000 rubles on it and selected the following events for it:
- Chelsea beat Atlético 2,0 ;
- PSG beat Bayern 2,6 ;
- Milan take over Rijeka for 2,14 ;
- Lokomotiv will be stronger than Fastav for 1,6 .
As we have already discussed above, in the “3 out of 4” system there will be 4 accumulators with 3 selections in each. The bet of 1000 rubles is divided equally into 4 combinations, that is, 250 rubles for each.
Let's say we won elections #1, #3 and #4. This means that in our system, one combination consisting of these selections won. Calculate the payout amount:
(2.0 x 2.14 x 1.6)x 250 = 6.848 x 250 = 1712 rubles
With a payment of 1,712 rubles, our net profit is 712 rubles. Not so much, right? But if you had collected these 4 selections in a regular accumulator, the bet would have lost. However, if 2 selections or more are lost in our system, then the bet will lose the whole bet. Because each of the four combinations in the system will be losing.
Now let's see what happens if all four events in our system win:
(2.0 x 2.6 x 2.14) x 250 + (2.0 x 2.6 x 1.6) x 250 + (2.0 x 2.14 x 1.6) x 250 + (2 .6 x 2.14 x 1.6) x 250 = 11.128 x 250 + 8.32 x 250 + 6.848 x 250 + 8.902 x 250 = 2782 + 2080 + 1712 + 2225.5 = 8799.5 rubles
With a payment of 8800 rubles, our net profit will be 7800 rubles.
And what would happen if you bet these 4 selections with a regular winning accumulator? We believe:
(2.0 x 2.14 x 1.6 x 2.6) x 1000 = 17.805 x 1000 = 17805 rubles
The difference is impressive. But this is the price you pay for the insurance against losing individual selections in your combo bet.
What are the limitations when compiling a system?
The general restrictions that bookmakers have for betting systems are almost identical. It's about what's in the system is prohibited from collecting duplicate and related events. You can't take more than one pick from the same match, you can't bet to win and advance the same team in a playoff match. Of course, you won't be able to take identical choices into the system either.
But the system also has a general limitation that does not apply to regular express bets. It is that the system must consist of at least 3 choices.
Some restrictions vary from bookmaker to bookmaker. Consider them on the example of the most popular Russian offices:
- the maximum number of elections in the system: "Liga Stavok" and "Fonbet" - 16, "Winline" - 20;
- the maximum possible winning ratio: "Winline" - 5000.0. If the set threshold is exceeded, then the calculation will still be carried out according to it;
- the maximum number of combinations in the system: "Liga Stavok" - 1001;
- the minimum bet amount on the system: "Winline" - 100 rubles, "Fonbet" - from 50 to 1001 rubles, depending on the dimension of the system.
How to bet system?
We will assemble the system for an example on the site.
To get started, look through all the options for the dimension of the system that this bookmaker offers us, and study the number of combinations in them. 
Now we go to the bookmaker's website and click on the selections that we want to add to the system with the mouse. Let's say you have your eye on events from different sports:
- Celtic beat Anderlecht for 1.85;
- "Real" will defeat "Tottenham" for 1.48;
- Salavat Yulaev will beat Dynamo for 1.96;
- “San Antonio” will not leave a chance for “Oklahoma” for 3.75.
Have you chosen? We look at the right side of the screen, where all your choices are shown. Next, click on the desired type of bet - express / system. Next, you need to decide on the amount of the bet.
Another drawback is that the player does not know in advance the amount that he will receive in his hands if he wins the bet. You can calculate the options, but nothing more. Wherein the system payout may be less than the initial bet amount. In other words, you will win the bet but lose some of the money.
The system reduces your risks, but the maximum payout for it is lower than for the accumulator from the same selections. This is how the system is positioned by bookmakers. If you're tired of single betting, want to win big on multi-event combinations, but aren't ready for an all-or-nothing approach, try the system. But it is quite clear that a professional will never make a bet if he is not sure of his advantage over the bookmaker, so the system does not combine with the game of profit at a distance.
The discount rate is a special financial term that is used to describe as accurately as possible some of the economic processes that are associated with lending.
Different terms - same meaning
Sometimes the concept of "discount rate of interest" is understood as a financial category that characterizes actions related to lending. Almost every country uses this term to regulate the rate of economic growth. The discount rate is also called the refinancing rate.
What is the interest rate for?
Each state controls the amount of money that is in circulation. This allows the state to stimulate economic growth, or vice versa - to restrain the economy from "overheating".
Monetary control (which is carried out, among other things, with the help of the discount rate of interest) is the prerogative of the activities of central banks, which have a lot of tools for this process. There are a lot of such instruments, but it is the discount rate that should be highlighted in particular. Most of all developed Western countries use this tool (mechanism).
The most striking example is activity of the main financial regulator of the USA— The Federal Reserve System. The US Federal Reserve is constantly stimulating the American economy with the help of the discount rate. This allows the American economy to grow and develop.
In order to achieve these goals, the US Federal Reserve has constantly cut interest rates. As a result, this led to the growth of the US economy.
It should also be said that the concept of "discount rate of interest" in different countries has its own name. In itself, the concept of "discount interest rate" is a general term that means the interest rate at which some banking institutions are entitled to receive loans from central banks.
Harm and benefit of the discount rate of interest
It happens that a decrease in the discount rate of interest leads to a negative impact on the exchange rate of the national currency. There is also a reverse, that is, the discount rate leads to positive effects.
In Russian practice, the term refinancing rate is also used. Usually, the higher the discount rate of the Russian Central Bank, the higher the interest rate, the banks issue funds to their customers.
Also, the discount rate also means the rate (interest) that banks charge from a certain amount of a bill in the so-called "accounting for a bill." Essentially, the discount rate in such a situation is the cost charged for acquiring liabilities before they fall due.
During the accounting by the Central Bank of government bonds (or securities), as well as during the provision of a secured loan, the concept of “official discount rate” is used.
Why is the discount rate needed?
When the discount rate of interest is lowered by the Central Bank, commercial banks begin to borrow from the Central Bank much more often than before, which leads to the fact that their bank reserves become larger. For this reason, private (commercial banks) have a unique opportunity to increase the total number of loans issued to the population at a significantly lower interest rate. The reason for this is that the price of credit resources for them also decreased. All this leads to the formation of an increased supply of borrowed funds.
However, the discount rate of interest can have other effects as well. For example, when the discount rate is reduced by the Central Bank, the business climate improves. The fact is that the low rates of the Central Bank allow investors and businessmen to take significantly larger loans in order to carry out their activities.
In Russia, with the discount rate of interest, everything is somewhat more complicated. During the 1998 crisis, it was the rapid growth of the discount rate (refinancing rate) that led to the collapse of the national currency against the US dollar. All this led to a decrease in the total number of investors and a massive outflow of capital.
Also, during a decrease in the discount rate of interest, there is an increase in the level of loans, which can lead to large economic growth and, as a result, to an increase in spending and inflation.
The discount rate is the most important indicator that forms the main aspects of the activities of credit institutions. So, it is set by the national bank of the country for other commercial banks. Its size depends on the monetary policy pursued by the state, and the goals that it pursues.
For example, when inflation is high, the discount rate rises. As a consequence, the cost of loans issued by the national bank becomes more expensive. Accordingly, commercial banks become much more expensive, the demand for credit services decreases. In such a simple way, the government contributes to a decrease in the volume of money supply, and then the withdrawal of part of the cash from circulation. This helps stop inflationary growth and keep it within a certain limit.
The discount rate is an instrument of the central bank, with the help of which it regulates the main processes of the economy, for example, it maintains the exchange rate of the national currency at the required level, controls the amount of money in circulation, and forms the country's gold and foreign exchange reserve. In practice, a sharp increase or decrease is rarely observed; as a rule, minor, but no less effective adjustments are allowed.
When the discount rate increases, the exchange rate of the national currency stabilizes. In addition, commercial banks are experiencing a lack of credit resources, because central bank loans are becoming expensive. It was at this time that the discount rate on deposit operations increased. Under the proposed conditions, it is more profitable for the population to transfer the available capital than to invest in production or financial activities. Thus, there is a withdrawal of funds from circulation for a certain period, and hence a decrease. This method is used when pursuing a policy called "expensive" money.
And the policy of "cheap" money implies a reduced refinancing rate. It is introduced when there is a decline in industrial activity in the country. The government understands the need to support a certain industry and creates such conditions for credit organizations that allow them to reduce loans, especially for legal entities. This is how capital flows into industry or into the sphere of specific services, and the development of the industry is stimulated.
It is worth noting that the above measures are considered effective, but they are valid only for a certain period of time. A further increase or decrease in the rate leads to negative consequences. Unfortunately, every event has some disadvantages. The regulation of the refinancing rate also has a “reverse side of the coin”, which is as follows:
- An increased discount rate provokes a decrease in wages, business leaders are forced to cut the number of jobs. All this naturally increases the burden on labor exchanges and creates tension in society.
- Lowering the rate, of course, gradually brings the country out of the crisis, as it contributes to the development of the industrial sector. In addition, the state thus supports small and medium-sized businesses, allowing them to stay afloat even in the most difficult situations. But only for a while, then there is a rapid inflationary growth, which threatens the entire economy of the country.
It can be concluded that the discount rate is a good tool for achieving the main objectives of the state's monetary policy, but it should be managed wisely.
The forex world revolves around discount rates. The discount rate is perhaps the most important factor in determining the price of a currency. Therefore, it is extremely important to be aware of the monetary policy (discount rate decisions) of the Central Bank of the country whose currency you are working with.
The main factors influencing the decision of the Central Bank regarding discount rates is price stability or inflation.
Inflation is a constant increase in the prices of goods and services.
It is inflation that is the reason that you pay 100 rubles per kilogram of sausage, although 20 years ago you paid 20 times less.
It is generally recognized that moderate inflation is an indispensable component of economic growth.
However, too high inflation can destroy the economy, which is why Central Banks around the world constantly monitor indicators such as CPI (Consumer Price Index), PCE (Personal Consumption Index).
In an attempt to contain inflation, Central banks most often raise interest rates, which leads to lower inflation and slower economic growth.
This situation arises for the simple reason that raising interest rates causes consumers and businesses to save money and reduce borrowing, which leads to a decrease in economic activity and putting money under the mattress.
On the other hand, a decrease in discount rates leads to the fact that the level of loans, both from consumers and from commercial structures, grows (as banks reduce the level of requirements for the borrower), which, in turn, leads to an increase in costs, thus contributing to economic growth.
How might this affect the foreign exchange market?
Exchange rates directly depend on the size of discount rates for the reason that the inflow or outflow of foreign investment into the country depends on their level. Discount rates are the main factor determining the attractiveness of the economy for investors (based on the size of the discount rate, the investor determines whether he should invest in the economy of a given country).
If you were offered to put money into a savings account at 1% and at 0.25%, which would you choose?
We would have done the same - left the money under the mattress. Do you understand what we are talking about? However, we do not have such an option.
Well, yes! You would choose the offer to deposit money at 1%, wouldn't you?
Of course… 1% is more than 0.25%. The same thing happens with currency!
The higher the discount rate in a country, the stronger its currency, and vice versa, in countries with a low discount rate, the currency weakens.
It's not difficult at all.
The main thing to remember is that the level of the discount rate within the country has a direct impact on the interest of investors and, as a result, on the price of the local currency on the international market.
The situation in the markets is constantly changing depending on the ongoing events and all kinds of situations. The same thing happens with discount rates, they also change, but not so often.
Although, most often, discount rates change gradually, depending on changes in monetary policy, even a simple report can affect the “mood” of the market.
This leads to the fact that discount rates change more sharply than previously expected, and even begin to move in the opposite direction.
So you should be on your guard!
Discrepancy in discount rates.
Take any currency pair.
When deciding whether a currency will appreciate or weaken, many currency traders use the technique of comparing the discount rates of one country issuing one currency of a given currency pair with the discount rates of a country issuing another currency of this currency pair.
The difference between these discount rates, i.e. the difference in interest rates is the first thing you should pay attention to. Such discrepancies will help you identify changes in the currency you are interested in that are difficult to notice on a superficial examination.
An increase in interest rate divergence usually has a positive effect on a stronger currency, while a decrease in the divergence has a positive effect on a weaker currency.
Cases where the discount rates of a currency pair move in opposite directions often result in a huge swing.
The moment when the discount rates for one of the currencies of the currency pair are rising and the other is falling is the perfect time for sharp swings.
Nominal and real rates.
When people talk about discount rates, most often they mean either nominal or real discount rates.
What is the difference?
The nominal discount rate is calculated taking into account the expected inflation, as a result of which it often does not coincide with the real one.
Real discount rate = nominal discount rate - expected inflation
Nominal rate - the base rate that can be observed (i.e. interest on bonds).
In turn, the markets do not pay much attention to such rates, mainly focusing on real interest rates.
If you held a bond with a par value of 6%, but the annual inflation rate was 5%, your real return would be 1%.
Big difference right? To avoid this, remember not to confuse nominal and real discount rates.
Discount rate- financial term, financial category used to characterize the following processes related to lending:
The discount rate refers to the interest rate at which the Central Bank of the country provides loans to commercial banks. In Russian practice, along with the term discount rate for this situation, the term is used refinancing rate. The higher the discount rate of the Central Bank, the higher the percentage then charged by commercial banks for the loan they provide to their customers and vice versa.
The discount rate is understood as the percentage, the rate charged by the bank from the amount of the bill when « bill accounting» (purchased by the bank before the due date). In fact, the discount rate in this case is the price charged for acquiring the liability before it falls due. When accounting for government securities by the Central Bank or providing a loan secured by them, the term official discount rate is used.
Discount rate lending means that commercial banks and other depository institutions have the right to borrow reserves from the Central Bank at a discount rate. This rate is usually set below the short-term capital market rates (Treasury bills). This allows institutions to change the terms of lending (that is, the amount of money they can lend out), thus affecting the money supply.
Simple, compound and nominal discount rate Simple discount rate
When accounting for simple discount rate, the discount is taken in relation to the total amount of the obligation and represents the same amount each time. In other words,
Compound discount rate
When accounting for complex the discount rate, the amount of the payment is calculated by the formula:
(with the same notation).
Nominal discount rate
When accounting for nominal discount rate, which is charged once a year, the amount of payment in years is calculated by the formula:
.
The discount rate is perhaps the most important factor in determining the price of a currency. Therefore, it is extremely important to be aware of the monetary policy (discount rate decisions) of the Central Bank of the country whose currency you are working with.
The main factors influencing the decision of the Central Bank regarding discount rates is price stability or inflation.
Inflation is a constant increase in the prices of goods and services.
It is inflation that is the reason that you pay 100 rubles per kilogram of sausage, although 20 years ago you paid 20 times less.
It is generally recognized that moderate inflation is an indispensable component of economic growth.
However, too high inflation can destroy the economy, which is why Central Banks around the world constantly monitor indicators such as CPI (Consumer Price Index), PCE (Personal Consumption Index).
In an attempt to contain inflation, Central banks most often raise interest rates, which leads to lower inflation and slower economic growth.
This situation arises for the simple reason that raising interest rates causes consumers and businesses to save money and reduce borrowing, which leads to a decrease in economic activity and putting money under the mattress.
On the other hand, a decrease in discount rates leads to the fact that the level of loans, both from consumers and from commercial structures, grows (as banks reduce the level of requirements for the borrower), which, in turn, leads to an increase in costs, thus contributing to economic growth.
How this can affect the foreign exchange market:
Exchange rates directly depend on the size of discount rates for the reason that the inflow or outflow of foreign investment into the country depends on their level. Discount rates are the main factor determining the attractiveness of the economy for investors (based on the size of the discount rate, the investor determines whether he should invest in the economy of a given country).
If you were offered to put money into a savings account at 1% and at 0.25%, which would you choose? You would choose the offer to put money at 1%, since 1% is more than 0.25%. The same thing happens with currency!
The higher the discount rate in a country, the stronger its currency, and vice versa, in countries with a low discount rate, the currency weakens.
The main thing to remember is that the level of the discount rate within the country has a direct impact on the interest of investors and, as a result, on the price of the local currency on the international market.
The situation in the markets is constantly changing depending on the ongoing events and all kinds of situations. The same thing happens with discount rates, they also change, but not so often.
Most forex traders don't pay much attention to current interest rates as they are often reflected in the price of the currency. The more important question is where discount rates will go next.
It is also important to know how monetary policy affects interest rates or, more precisely, how interest rates will change at the end of the monetary cycle.
If interest rates fall for a long enough period, it means that they are bound to rise soon.
The market will tell them. They have animal instincts. The change in expectations is a signal that when the time for changing interest rates comes up, speculation will get a new impetus.
Although, most often, discount rates change gradually, depending on changes in monetary policy, even a simple report can affect the “mood” of the market.
This leads to the fact that discount rates change more sharply than previously expected, and even begin to move in the opposite direction.
Discrepancy in discount rates.
Take any currency pair.
When deciding whether a currency will appreciate or weaken, many currency traders use the technique of comparing the discount rates of one country issuing one currency of a given currency pair with the discount rates of a country issuing another currency of this currency pair.
The difference between these discount rates, i.e. the difference in interest rates is the first thing you should pay attention to. Such discrepancies will help you identify changes in the currency you are interested in that are difficult to notice on a superficial examination.
An increase in interest rate divergence usually has a positive effect on a stronger currency, while a decrease in the divergence has a positive effect on a weaker currency.
Cases where the discount rates of a currency pair move in opposite directions often result in a huge swing.
The moment when the discount rates for one of the currencies of the currency pair are rising and the other is falling is the perfect time for sharp swings.
Nominal and real rates.
The nominal discount rate is calculated taking into account the expected inflation, as a result of which it often does not coincide with the real one.
Real discount rate = nominal discount rate - expected inflation
The nominal rate is the base rate that can be observed (i.e. interest on bonds).