Be A Winner Everytime
By Charles Hopkins
Published 06/1/2006 | Finance
Just imagine placing a bet with the knowledge in advance that there is a 100% certainty of being a winner.
Visualize all that lovely money pouring into your bank account.
Pipe dream? No! Just guaranteed profit time after time.
You can make risk-free profits simply by carefully monitoring and reacting quickly to the differing odds offered by online bookmakers and betting exchanges.
Financial transactions that make profits without incurring any risks are known as 'arbitrages' and have been used for some time in the world of finance.
Sportsbooks ideally like to have a balanced book. This means that if the odds on offer were converted to percentages and then added together, the total would amount to more than 100%. Therefore, there is a built-in percentage favoring the sportsbook. The higher this percentage is, the more advantageous it is for the sportsbook.
For the punter to make a guaranteed profit, he needs to have the percentages in his favor. If the total book percentages totaled 80%, then a guaranteed profit of 20% would be available to him whatever the result.
Unfortunately, no sportsbook is going to allow their percentages to add up to less than 100%.
The good news is that the outcome of an event is a matter of opinion and different sportsbooks sometimes have differing views.
For example, say a tennis match where Player 'A' is given odds of 1.50 by one sportsbook and Player 'B' is given the same odds by another. The odds of 1.50 = 40%, so both odds totaled give 80% which results in an arbitrage of 20%. By staking 400 on Player A at the odds of 1.50 and 400 on Player B at the same odds, there is a risk-free guaranteed profit of 200.
The workings of this arbitrage are:
Player 'A' - Stake 400 @ 1.50 = Potential return of 1000
Player 'B' - Stake 400 @ 1.50 = Potential return of 1000
Whichever player wins - Profit = 1000 minus Stakes 800 = 200.
200 profit without any risk whatsoever and the good thing about arbitrage trading is that you can go on doing it day after day.
Arbitrage trading may be risk-free, but it is not work-free. Before you can trade, you have to first find an arbitrage opportunity.
This involves careful scanning of sportsbooks searching for odds that afford an arbitrage trade. The internet, with its ever-increasing number of sportsbook sites, makes this task much easier.
Events to look at are those with two or three possible winning outcomes. Some examples of these are: tennis, golf, American football, soccer, snooker, boxing, basketball, baseball, ice hockey and politics.
It's best to have a minimum favorable percentage of 5%. If odds from betting exchanges are being used, do not forget to include the exchange's percentage commission when calculating.
Comparing all the odds on offer for numerous events across the vast number of sportsbook sites in operation can be very time consuming. In addition, favorable odds need to be located quickly or the arbitrage opportunity will disappear. To make this task easier and much, much quicker, there are various software programs available that can be employed.
If making guaranteed profits without any risk is appealing, then arbitrage trading could be the business to be in. This is risk-free, guaranteed profits at their very best.