Some people like to make money from betting on sports. They use two popular strategies called arbitrage and trading. Both of them need you to look at the odds, how the market changes, and risk factors. In this article, we will tell you how arbitrage and trading work and what is good and bad about them.
Arbitrage betting
Arbitrage involves placing bets on opposite outcomes of an event at different odds. Therefore, no matter what happens, you make a profit. For example, suppose there is a tennis game between Player A and Player B, and you find this:
| Bookmaker | Player A to win | Player B to win |
| Bookmaker #1 | @2.0 | @1.8 |
| Bookmaker #2 | @1.9 | @2.1 |
To exploit this opportunity, you need to calculate how much to bet on each outcome so that you guarantee a profit regardless of who wins. One way to do this is to use an online arbitrage calculator, which will tell you the optimal stake for each bet. In this case, if you have a total stake of $1000, then using the calculator, you get a $525 stake in Player A and a $475 stake in Player B.
Now, if you place these bets with the respective bookmakers, you will have the following outcomes:
If Player A wins, you get $525 * 2.0 = $1050 from Bookmaker 1 and lose $475 from Bookmaker 2, for a net profit of $1050 – $1000 = $50.
If Player B wins, you get $475 * 2.1 = $997.5 from Bookmaker 2 and lose $525 from Bookmaker 1, for a net profit of $1000 – $997.5 = $2.5.
As you can see, no matter who wins the match, you will either make a small profit or break even. This is the essence of arbitrage betting. Finding and exploiting discrepancies in the market to secure a risk-free return.
Pros
- The good thing about arbitrage betting is that it is safe. You are not guessing or thinking, but only using the different odds from different places.
- You can make a lot of money if you find significant gaps in the odds, or if you can bet on many different events.
CONS
- The bad things are that it takes a lot of time, money, and work to find and use the arbitrage chances.
- You also need to have accounts with many places and be able to bet fast before the odds change or the market ends.
- This strategy can also be detected by the bookmakers. Who may limit your stakes, close your accounts, or void your bets?
Trading in betting
Trading in betting is the act of buying and selling bets on a betting exchange, such as Betfair. The goal is to make a profit regardless of the outcome of the event. It works by placing a back bet (betting for an outcome to happen) at a certain price. And then, placing a lay bet (betting against the same outcome) at a lower price, or vice versa. This way, the trader can lock in a profit or minimize a loss before the event starts or ends.
For example, suppose a trader backs Team A to win a football match at odds of 2.0 with a stake of $100. This means that if Team A wins, the trader will win $100, but if Team A loses or draws, the trader will lose $100. Now, suppose that during the match, Team A scores a goal, and the odds for them to win drop to 1.5. The trader can now lay Team A to win at odds of 1.5 with a stake of $133.33. This means that if Team A wins, the trader will lose $66.67, but if Team A loses or draws, the trader will win $133.33. By doing this, the trader has secured a profit of $33.33 regardless of the outcome of the match.
Pros
- You don’t need to predict the winner or the score of the event. You only need to predict how the odds will change.
- Several tools can help you analyze the odds, market movements, and risk factors.
- This strategy will allow you to reduce your losses by closing your position before the event ends.
cons
- It requires a lot of time, money, and research to find and exploit trading opportunities.
- You also need to have accounts with multiple betting exchanges and be able to place your bets quickly before the odds change or the market closes.
- Fierce competition from other traders who have more experience, knowledge, or resources than you.
Key takeaways on arbitrage betting & trading
It is perfectly possible to make a living from sports betting, but it requires a lot of work and dedication. But with all the tools available today, arbitrage and trading are easier than ever. Our final recommendation are to use the best bookie for arbitrage. And be disciplined. Stick to your strategy, set a budget, and don’t chase losses or get greedy!