Sports Arbitrage Trading – A Practical Minicourse – Part Three

How do I locate arbs to trade?

There are 2 factors which identify an arbitrage trading opportunity

1. The event must have a limited number of possible outcomes

The event that you are betting on should ideally have either 2 or 3 possible outcomes.

For example, the event may be a head-to-head contest, such as a tennis or snooker match, where only one of the players can win. Or you may consider a cricket or football match, where there are three possible results including a tie/draw.

There are exceptions, where arbs become available in events with more than three outcomes, and they can prove to be very lucrative, but you will find your most regular arbs in events as described above.

2. There should be an adequate percentage margin in your favour

When you are beginning, it will probably be better to restrict your betting to opportunities that yield 2.0% or more. This will allow you a margin for error as you are learning, and any mistakes will probably just result in a break-even situation where you may just have to sacrifice your profit.

However, as you grow in experience, you will be able to consider ALL situations, including the many THOUSANDS of 1%-2% opportunities that occur every month. While juicier 8%-15% arbs, which pop up a few times a week, will provide you with wonderful bonuses, the smaller, far more frequent ones will consistently add to your bottom-line.

So – that’s it. You find the event, do the maths, place the bets, and earn a guaranteed profit regardless of the outcome. Once you have streamlined your processes, it couldn’t be much simpler.

The skill is in finding suitable events to bet on. You’ll be able to learn more in detail about this below.

There are many arbitrage-producing events available, but overleaf is a short list those which you are highly recommended to check.

• TENNIS
  With only two possible outcomes, this is the ideal event. The more obscure the tournament, the better your chances of finding profitable differences of opinion between sportsbooks. A large proportion of the bookmakers listed regularly offer prices on all tennis matches.You are likely to find a significant number of arbs in tennis.
• SNOOKER
  Once again, with only two possible outcomes, snooker is an ideal event in which to seek arbitrage opportunities, although stakes can sometimes be limited by bookmakers to just a few hundred pounds.
• CRICKET
  The one-day matches allow for only two outcomes while the winter tour also allows for a draw. Cricket seems so be something of a weak-spot for many bookmakers; a fact which often gives rise to some large percentage arbs.
• US FOOTBALL
  The divisional championships can produce some lucrative arbs. Once a few games have been played, very large discrepancies between sportsbooks can arise. It is also often the case that North American odds-compilers take a completely different view to their European counterparts-which creates more arbitrage opportunities
• GOLF
  Golf produces an abundance of arbs each week in 2-ball and 3-ball 18-hole matchups as well as the 72-hole matchups. Further,in the match-play events such as the Dunhill Cup and World Matchplay Championship, the contestants are paired up and can only either win or lose. The markets in these events can be quite volatile and produce many arbs.
• SOCCER
  It is worth keeping an eye on the European matches every week during the soccer season since they can produce some lucrative opportunities. One of the benefits of soccer betting compared to many other sports is the very large stakes size that bookmakers will accept. look out for arbs not only in regular Home, Away, Draw markets but also Asian Handicaps & Total Goals market
• POLITICS & ENTERTAINMENT
  Whether it is the next US President, or the next person to leave Big Brother, if there is room for disagreement between odds-compilers, there is potential for arbitrage. Some very large margins can be earned in these non-sporting events because the bookmakers have to guess much more than in sports.
• OTHER SPORTS When on the prowl for risk-free profits, you should also consider
  1. boxing
  2. basketball
  3. baseball
  4. hockey
  5. ice hockey

If you are going to look for arbs manually, then you have to be prepared to spend a lot of time and effort scouring individual bookmaker sites & odds-comparison sites for prices. This can be rewarding in some cases but it makes far more sense to use software to perform this task as it is much faster and will free you to do other things.

So, now you know what to look for, let’s take a look at how the software at the top end of the market will assist you…

• INCREASED PROFITS There is no doubt that if you use your sports arbitrage software properly you will make much higher profits than without. As well as finding arbitrage trades for you automatically, it should also locate middles trades and even alert to to trades that you can use to fee up any bonuses that you have pending with your bookmakers
• SAVED TIME Using the software will help to save a lot of time. If you can rely upon the software to do the searching on your behalf, it frees you up to look in other places or do other things.
• TIP-OFFS FOR OTHER TRADES This is a much overlooked benefit but it is something which almost every professional trader uses. When the software alerts you to an arbitrage trade, it very often provides tip-offs about other possible trades. For example, a soccer arbitrage trade may contain a price which you can use in a betting-exchange strategy instead of the arbitrage trade of which you have been notified. The key issue is that the software is going to bring this to your attention faster than any other method of research. Your sports-arbitrage software should also allow you to choose to receive break-even trades i.e. those where the prices add up to 100% and this can be used to great effect when using bonus-hunting techniques
• EARLY WARNING FOR PRICE-RELEASES The best sports-arbitrage software allows you to be the first to know when a bookmaker has posted new prices on-site. This early-warning system can be of great advantage in trading strategies that require you to analyse new prices as soon as possible.
• USEFUL STATS With the large numbers of data it has access to, your software should be able to provide you with very useful statistics. It should be able to show you how many arbs each bookie has had in each sport each month. This is extremely powerful for research as it lets you see exactly which accounts are the most important each month. Many professional traders use this type of analysis to decide where their funds should be placed ready for trading each month.

In my next article, we’ll see what we can do to minimise the impact of transaction fees when you’re trading…