Sports Arbitrage Calculations

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How to calculate your stakes

I'm about to show you what most sports arbitrage service providers would like to remain secret:- how you can calculate you stakes without buying an expensive spreadsheet or computer program!

It's simple when you know how. You have to use the odds to work out what the percentage chance each selection has of winning and weight your stakes accordingly.

Calculating the percentages

Fractional (UK-style) odds
When using fractional UK-style odds (e.g. 5/6), divide the right hand number by the sum of both numbers and times by 100.

Using our example from earlier on:

St. Louis at 5/6 calculates as 6 / (5 + 6) x 100 = 54.54%

Arizona at 7/5 calculates as 5 / (7 + 5) x 100 = 41.66%
Fractional (European-style) odds
When using decimal European-style odds (e.g. 1.83), divide 100 by the odds.

Using our example from earlier on:

St. Louis at 1.83[3 reoccurring] calculates as 100 / 1.833333 = 54.54%

Arizona at 7/5 calculates as 100 / 2.40 = 41.66%

These percentages represent the cover of the event that the bookmakers have. Anything under 100% is an under-round and means that it is an arb.

So adding these percentages comes to 96.20% Subtract this from 100% and we have an arbitrage opportunity of 3.80%

You may remember that I told you earlier that this particular arb produces a profit of 3.937%, yet is only calculates to 3.80%.

Well there is a subtle difference. We have just worked out the total under-round (3.80%), whereas the original example shows the true return on investment, (3.937%).

The difference comes about because to work out the true return on investment you can perform a further mathematical equation involving the total stake. I'm no boffin, so I wont go into that now. All you need to know is how to check for an under-round (an arbitrage opportunity).

Calculating the stakes
Calculating how much money to stake on each selection is a vital part of the sports arbitrage process. If you don't stake your money proportionately you wont guarantee an even return no matter which selection wins.

You must back each selection to a stake that is proportionate to their percentages that we calculated above.

So in our case, stakes of £54.54 on St Louis at 5/6 and £41.66 on Arizona at 7/5 both return £100 no matter which selection wins and you only invested £96.20!

You'll only ever have one bet that wins - because only one selection can win an event. So one or more of your bets on each will lose. But the point is that the one winning bet recoups all your other stakes PLUS a small percentage profit!

Free sports arbitrage stakes calculator

It would be a real pain if you had to go through all those calculations each time you wanted to invest in an arbitrage opportunity.

As mentioned earlier, some companies sell sports arbitrage stake calculators, but here are some that you have use for free!

Update 21st March 2005

I have now added my own free arb calculator for up to 6 selections, using either decimal or fractional odds. Enjoy!

http://www.homepokergames.com/sportsarbspreadsheet.php - Excel spreadsheet
http://www.thunderfoot.f2s.com/betting/ - Advanced Excel spreadsheet
http://www.betonsuccess.com/new/tools.php?type=calculator - Online calculator
http://www.chromaweb.com/bets/calculator/index.php - Online and downloadable back-and-lay calculator for PC and Mac
http://eskei.com/betting/ - Downloadable back-and-lay Windows program and Excel spreadsheet

Learn the disadvantages of sports arbitrage trading in Part 5

Continue to the arbitrage problems page to learn more.

Sports Arbitrage Information | Free Arb Calculator | Arbitrage Questions & Answers