2018 prospectus - apex algorithms · against the house has contributed to a huge increase in the...

2018 Prospectus

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About Us

Apex Syndicate

Strategy

Liquidity

Risk

Operational

Beat The Bookies

Revenue Streams

Track Record

Investment Examples

Disclaimer

www.apexalgorithms.co.uk / [email protected] / 01304 802820

The basic principle in profitable sports betting is that you can only win in the long run by

consistently trading when the odds are in your favour. Our proven and tested unique player

algorithms are ready to pounce whenever the bookmakers’ odds do not reflect the true odds for

a particular event. And this happens far more often than one would expect. The vast majority

of punters have always, and will always lose money. This means the bookmakers do not have to

be that sophisticated with their risk management and that leads to inadequacies that we exploit.

Further, bookmakers offer odds to maximize their profits, not to reflect true probability. If one

team is heavily backed, then they adjust the odds to offset their own exposure and profit from the

commission.

By generating an accurate probability and edge over the bookmakers, it is simple to understand

that the more we turnover, the more we exploit the mispricing, and the more profitable

and successful we are. Since we began trading 3 years ago we have validated the profitable

opportunities that exist with consistent double-digit yields, resulting in excellent low-risk returns.

We only ever risk a maximum of 2.5% per bet but the average bet size is around 1%. Every bet is

different in the probability of the outcome and the size of the edge we have over the bookmaker.

The higher the probability and the higher the edge the bigger the bet will be and vice versa.

Apex Algorithms was established by ex-City workers who have a passion for both the financial

and sports markets, are enthusiastic gamblers who are fully committed to intense quantitative

analysis.


- Uses sophisticated financial market techniques to exploit mispricing in the sports market

- Has created a unique sports algorithm to be used in the prediction models

- 5 years back-testing

- Continuous updating and evolving models

- Uses proven scientific staking system

- Only invests in liquid markets to ensure best prices achieved

- Applies obsessive risk management strategy

- Low-risk investment with a maximum of 2.5% of fund ever risked

- Repeatedly betting on independent outcomes within a predefined time frame

- No open positions so there is no liquidity squeeze if financial Armageddon strikes

- Automated execution platform - emotion eliminated

- Owners fully invested in the fund

- Profits reinvested

- Minimum investment level is £2,500

Apex Syndicate

Syndicate Membership Tiers Amount Profit Split

ENTRY £2,500 – £5,000 40% / 60%

FOUNDATION £5,000 – £15,000 50% / 50%

SILVER £15,000 – £30,000 52.5 % / 47.5%

GOLD £30,000 – £50,000 55% / 45%

PLATINUM £50,000 – £100,000 60% / 40%

DIAMOND £100,000+ 65% / 35%


Apex Algorithms uses sophisticated financial market techniques and Artificial Intelligence to build

sports prediction models to capitalize on the huge mispricing opportunities in the subjective

sports markets.

With the explosion in online sports and betting websites since the inception of the internet, there

is now over a decade of historical data available to assist in creating accurate prediction models.

These can then be backtested and trained in the vast banks of available data.

Advanced mathematics using supercomputers can be applied to the sports markets. Using

Artificial Intelligence techniques to build neural networks and genetic algorithms, the data can be

mined to discern whether the phenomena in the markets are real or just noise and build models

accordingly.

Machine learning is the process by which software learns from past experiences to enable it

to predict the future and is becoming increasingly formidable. The longer Artificial Intelligence

is exposed to real-world conditions, the smarter it gets and the better the prediction models

become.

With the explosion in online sports and

betting websites, there is now over a

decade of historical data available to

create accurate prediction models.


Betting is now global. Punters can get in on the action with thousands of different sporting

events around the globe. Soccer is by far the biggest with millions of pounds bet throughout the

UK and Europe on a weekly basis. But this is dwarfed by the multi-millions of pounds that is bet

throughout Asia, where they are both betting and football crazy.

There is one UK firm that trades in Asia which is well ahead of the curve. It employs over 50

technical analysts and has been operating since the early 2000’s. It reportedly earns over $100m

per year tax-free.

The inception of betting exchanges where punters now bet against each other rather than

against the house has contributed to a huge increase in the size of bets available, with punters

now able to bet up to £1m in certain matches on Betfair, the UK’s largest betting exchange. With

the number of games played in a season, betting turnover of £100’s of millions is now easily

achievable. The same can be said for tennis betting and horse racing where £100’s of million are

traded per week on Betfair.

Although these numbers are a long way o the financial markets they offer significant liquidity and

are growing rapidly. There is an expectation that it will not be long before institutional investment

starts to flow into the markets and there are already signs this has begun.


Sports betting involves gambling on certain independent outcomes within a predefined time

frame, where the possible wins and losses from each bet are known before the event, making

the risks easier to understand and manage. Unlike financial markets, sports betting has no open

positions, so there is no liquidity squeeze if financial Armageddon strikes.

Apex Algorithms is fully aware that an obsessive risk management strategy is at the heart of any

long-term trading success and therefore adopts the Kelly Criterion staking system as its main

measure of risk control. Kelly allows money to grow exponentially while avoiding the curse of

gamblers ruin. As the odds of winning rises stakes increase and vice versa, so Kelly determines

when to be aggressive and when to back off. Constant attention is applied to the real prices which

are quantified with maths and gambling instincts through data mining and analysis, ensuring

extremes are factored into the price. Having accurate calculations for the probability of the

outcome is essential to distributing capital accordingly.

Low-risk investment with a

maximum of 2.5% of each trade

ever risked and we apply an

obsessive risk management

strategy.


Another key aspect of Apex Algorithms risk control is the integration of a fully automated

execution-only platform. One of the biggest downfalls to the punter in sports betting comes from

their emotional involvement. Apex Algorithms models are connected to the external API’s of the

betting companies and execute all bets automatically with no human intervention. This is vital to

the success of Apex Algorithms.

The model receives market data from sports websites. For example, in football, as soon as the

team news is available, a connection to the Press Association provides the team news an hour

before kick-off.

Using this data, the model will calculate what the real price should be for that fixture. It will then

scan the betting markets to see if the market prices are better than the real price and, using the

Kelly staking system, the model calculates the stake accordingly.

The algorithm finally executes the bet. Apex algorithms goal is to be hooked up to the global

sports grid 24-7. As they appear, models will execute the bets seconds after the real prices are

compared to the market price.


At Apex Algorithms we are on the side of the punter. In England and Ireland, there are 8

individuals from the gambling industry who made it on to the Times 2015 Rich List, accumulating

fortunes of greater than £100m. The owners of Bet365 and Betfred have amassed fortunes of

over a billion pounds. That’s an awful lot of money being lost by the punters. This is not surprising

when you look at the prices bookmakers o er versus the real probability of winning.

However, they don’t always get their prices right and when they do skew out of line we will provide

the tips to enable punters to capitalise. We also want to educate our subscribers on how to bet

intelligently, avoiding the pitfalls like “cashing out” bets and how to stake effectively and avoid

gamblers ruin.

Deliver The Knockout Blow To The Bookmakers


Trading

Apex Algorithms runs a propriety trading fund so benefits from trading gains from its own capital

invested. It also manages external funds where it charges a management fee and receives a

percentage of trading profits.

Subscriptions

Betting on multiple sports provides diversification, although this is not as necessary as it is in

the financial markets where asset classes are correlated. In sports betting, diversification can

help to reduce volatility and give exposure to a variety of trading models in case there are ones

underperforming. It also enables complete coverage of the annual calendar with betting 364 days

of the year and up to 24 hours a day in some months of the year.

- Soccer (World Leagues)

- Tennis (ATP, WTA)

- Golf (PGA, EGPA)

- Horse Racing (World meetings)

- Baseball (MLB)

- Americal Football (NFL)

- Basketball (NBA)

- Ice Hockey (NHL)

Multiple Sports

The main 4 sports in the USA are Baseball (NBA), American Football (NFL) and Ice Hockey (NHL).

Each has a huge global coverage with billions of pounds wagered a year on these sports. On the

back of this, there seems to be a huge market for subscriptions with a competitive handicapping

(the term they use for tipping) market already established. Successful handicappers with proven

track records can charge up to $100 dollars per tip. One of the great things about the US sports is

that there are no draws, every game has a winner and a loser.


Apex Algorithms - 7 Year Back Testing Results

(Based on 2.5% Risk Level)

ROI 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Betfair Match Odds – Home 12.80% 12.00% -3.30% 5.00% 3.00% 11.00% 1.10%

Betfair 2.5 Goals – Home 13.00% 5.50% 3.50% 0.00% 9.00% 9.00% 8.21%

Betfair 3.5 Goals – Home 16.30% 6.80% 4.50% 1.50% 4.50% 6.00% 3.65%

Betfair Match Odds – Away 9.00% -0.80% 6.30% 6.00% 4.00% -1.00% 0.21%

Betfair 2.5 Goals – Away 4.50% -1.30% 0.80% -1.00% 4.50% 2.00% 1.80%

Betfair 3.5 Goals – Away 5.80% 1.00% 1.00% 0.50% 3.00% -0.50% 1.50%

Asian Handicap – Home 10.00% 11.30% 4.00% 7.30% 4.00% 16.00% 12.35%

Asian Goals – Home 10.00% 11.30% 4.00% 7.30% 5.00% 3.00% 3.02%

Asian Handicap – Away 4.80% 0.50% 2.80% 2.00% 8.50% 2.00% 1.65%

Asian Goals – Away 4.80% 0.50% 2.80% 2.00% 4.50% 0.50% 1.98%

Total ROI 90.80% 46.80% 26.30% 30.50% 50.00% 48.00% 35.47%

Monthly Returns 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

July 2.90%

August 9.50% 3.70% 4.80% 0.30% 4.70% 1.10% 2.73%

September 6.30% 6.30% -2.20% 3.00% 5.40% 2.20% 0.06

October 15.80% 5.30% 4.40% 3.00% 8.90% 6.60% 4.42%

November -3.20% 1.60% -3.30% 2.50% -0.70% 2.90% 5.96%

December 5.30% 1.10% 0.70% 4.80% 1.40% -4.40% 2.52%

January -7.40% 3.20% 3.70% -1.00% 6.40% 2.20% 2.18%

February 0.00% 9.50% 8.10% 1.50% 8.80% 11.70% -1.17%

March 14.80% -5.80% 3.70% 4.00% 5.50% 13.90% -0.11%

April 26.40% 17.30% 3.30% 6.00% 8.50% 9.50% 3.62%

May 23.20% 4.70% 3.00% 6.30% 1.10% 2.20% 3.84%

June 2.23%

Total 90.80% 46.80% 26.30% 30.50% 50.00% 48.00% 35.47%


2.5% Risk Level

Amount Invested £10,000

Max level of risk per month 2.5%

Average bet size £150.00

Average number of bets p/w 20

Average wk turnover £3,000

Approx. margin 5%

Average week Profit £150.00

Number of Weeks in Season 40

Approx. Season Profit £6,000

Approx. ROI 60%


Apex Algorithms Disclaimer

The vast majority of punters have always, and will always lose money. This means the

bookmakers do not have to be that sophisticated with their risk management and that leads to

inadequacies that we exploit. Further, bookmakers offer odds to maximize their profits, not to

reflect true probability. If our team is heavily backed, then they adjust the odds to offset their

own exposure and profit from the commission. This is why we are so con dent in our product.

However, obviously, our excellent past performance does not guarantee future positive returns.

By generating an accurate probability and edge over the bookmakers, it is simple to understand

that the more we turnover, the more we exploit the mispricing, and the more profitable and

successful we are. Since we began 3 years ago we have validated the profitable opportunities that

exist with consistent double-digit yields, resulting in excellent low-risk returns.

We only ever risk a maximum of 2.5% per bet but the average bet size is around 1%. Every bet is

different in the probability of the outcome and the size of the edge we have over the bookmaker.

The higher the probability and the higher the edge the bigger the bet will be and vice versa.

Apex Algorithms was established by ex-City workers who have a passion for both the financial

and sports markets, are enthusiastic gamblers who are fully committed to intense quantitative

analysis.

We are here purely to provide our clients with alpha: an excess return that far exceeds traditional

financial securities of similar risk.


2018 prospectus - apex algorithms · against the house has contributed to a huge increase in the...

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