Sports Arbitrage Betting Information

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What is arbitrage?

Arbitrage is the technique of trading that guarantees a profit without taking any risk. Arbitrage has existed in various forms probably since the beginning of time, but in modern times it is now mainly associated with financial markets. Arbitrage traders use anomalies between different markets to secure a risk-free profit for themselves with each trade that they make. (An arbitrage opportunity if often referred to as an "arb".)

In relation to the financial markets, arbitrage is described as the purchase of securities on one market and immediate resale on another market to profit from a price difference.

An example of arbitrage in the financial markets would be if Coca Cola shares traded on the London Stock Exchange for £10.00 and also on the New York Stock Exchange for £9.50. To take advantage of this arb, an investor (known as an arbitrageur) could guarantee a profit by buying shares on the New York Stock Exchange (for £9.50) and simultaneously selling the same amount of shares on the London Stock Exchange (for £10). The arb trader only makes 50p profit per share bought/sold but if he trades a large volume of the shares he can make a substantial profit, which returns 5% on his investment.



What is sports betting arbitrage?

Sports betting arbitrage involves taking advantage of differences in bookmakers' odds in sporting markets. Arbitrageurs guarantee a profit from sports events by betting on every selection in the event to ensure a profit no matter who wins.

Arb players make guaranteed winning bets by finding the highest odds on each participant of a sporting event with different bookmakers. If the bookmakers' odds are all high enough it is possible to guarantee a percentage profit based on the total amount staked no matter what the outcome of the event.

Sports arbitrage opportunities are also referred to as "arbs", "surebets", "overbrokes" and "underrounds". These terms all mean exactly the same thing - "arbitrage opportunity".



Example sports arbitrage opportunity:

This is an actual sports betting arbitrage opportunity that occurred on 24th December 2005:

Sport: American football - NFL
Selection 1: Philadelphia Eagles at odds of 11/8 (decimal 2.375) with Pinnacle Sports
Selection 2: Arizona Cardinals at odds of 4/5 (decimal 1.80) with Stan James
Profit: 2.395%



How does this sports arbitrage opportunity work?

An investment of £1000 in this arb produces a profit of over £23.

The stake on each selection must be placed in proportion to the odds.

So for the above example you would stake £431 on Philadelphia Eagles at odds of 11/8 to return £1023.63 and £569 on Arizona Cardinals at odds of 4/5 to return £1024.20

Therefore you have staked a total of £1000 and the bets return approximately £1023 each.

You may have noticed that the returns are not exactly the same. This is because I rounded the stakes to the nearest whole number. This is something that will be discussed further on in the website.



Learn more about arbitrage betting in Part 2

Continue to the arbitrage opportunities page to learn more.

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