Sportstrading

ARBITRAGE.
And a word about Arbitrage -- the close relative of Trading.
A knowledge and usage of arbitrage can add an aditional top-up to the Sportstrader's weekly income.

Arbitrage: An arbitraging opportunity raises its pretty head when different bookmakers form different opinions on the possible outcome of a sporting event and offer different odds on that outcome. The sportstrader can profit on the imbalance between the different bookmaker prices. Normally, arbitrage will be conducted on a market in which there are two contestants, e.g., golf, tennis, boxing.
Consider the basic example below.

A 100 unit bet on Player A with Bookmaker 1 will returm a profit of 100 units if Player A wins.

A   91 unit  bet on Player B with Bookmaker 2 will return a profit of 109 units if Player  B wins.

Irrespective of which player wins the game, an overall profit of 9 units is achieved. This 4.5% profit on capital outlay would be fairly typical of the profit turnover associatted with arbitrage. ___________________________________________________________________________

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Once or twice a day the sharp-eyed sportstrader will notice a horseracing arbitraging opportunity between a bookmaker and Betfair.At the time of writing, the Curragh 14:45 race is three hours away.

A quick scan of Oddschecker shows that one particular bookmaking firm (Bet365) is a "stand-out" 6/1 price for the favourite SEA LORD. Scanning over to the extreme right-hand-side of Oddschecker we see that current Betfair odds about SEA LORD are 49/10...............or approximately 5/1 if expressed in usual bookmaking fractionals. This would indicate a definite arbitraging opportunity that cannot be passed up.  

A more detailed examination of the Betfair market on the race is called for. Opening the Betfair screen confirms the profit-taking opportunity surtrounding SEA LORD.