2018 Prospectus
Page 3 4 5 6 7 8 9 10 11 12 13 About Us Apex Syndicate Strategy Liquidity Risk Operational Beat The Bookies Revenue Streams Track Record Investment Examples Disclaimer Page 2
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. Page 3
- 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% Page 4
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. Page 5
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. Page 6
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. Page 7
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. Page 8
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 Page 9
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. Page 10
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% Page 11
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% Page 12
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. Page 13