| One of the main selling points to sign people up in | | | | Ordinarily many of the trades that you are |
| Sports Arbitrage Trading is that it is a Risk Free | | | | presented with give you sufficient time before |
| Opportunity. This is partly true. Once the | | | | the event starts to place the trade and profit. |
| Arbitrage Trade is confirmed then you will be | | | | Sometimes however if you are not careful you |
| guaranteed a return and hence it becomes risk | | | | will place one side of a trade only to find that the |
| free. The problem therefore arises before you | | | | other bookmaker has closed the book because |
| finally commit to the arbitrage trade and that's | | | | their rules have determined that the time left |
| what I want to explore in this article. | | | | before the event starts is not enough for you to |
| There are five key reasons why you may not be | | | | place a wager. |
| able to successfully execute an arbitrage trade | | | | If this happens you are again at risk as you only |
| with a guaranteed profit. Whilst most companies | | | | have one side of the trade placed and the risk |
| who market Sports Arbitrage Trading will make | | | | may be increased as you may find it very difficult |
| some reference to some of these reasons it is | | | | to find a bookmaker to place with as clearly the |
| not in their interest to put too much emphasis on | | | | event is very close to starting. |
| the downsides that they represent, hence anyone | | | | Admittedly, if you are diligent in how you trade |
| thinking of getting involved in Sports Arbitrage | | | | you should not fall into this particular trap that |
| Trading needs to be especially diligent. | | | | often, if at all, but it is at least bearing in mind |
| I started Sports Arbitrage Trading some years | | | | especially when you remember that often you will |
| ago and fell foul of most of the issues I describe | | | | be in a different time zone to where the event is |
| in this article at some stage. My aim is not to | | | | being held. |
| deter people from Arbitrage trading as, if done | | | | There are websites such as Yahoo Sports that |
| correctly, it can be a profitable business but I am | | | | will prove invaluable in helping you getter a much |
| keen to ensure that new traders are aware of | | | | clearer picture on when a particular event is about |
| potential pitfalls. | | | | to start. |
| In summary the 5 reasons are: | | | | Bookmakers have different rules for certain |
| | | | sports |
| 1. Bookmakers restrict how much you can trade | | | | This issue is primarily related to Tennis although to |
| 2. Odds change such that the arbitrage no longer | | | | a lesser extent rules for Baseball can also impact |
| exists | | | | your ability to trade profitably. For the purposes |
| 3. Bookmakers have different cut-off times for | | | | of this article I will focus on Tennis. |
| trades to be placed | | | | Tennis is generally either one or two people |
| 4. Bookmakers have different rules for certain | | | | matched against a similar number of opponents. |
| sports | | | | This brings with it the risk that one player may |
| 5. Money Management Let's now explore each | | | | not be able to finish a match, often because of |
| one in more detail: | | | | injury. If this happens the player(s) who are able |
| Bookmakers restrict how much you can trade | | | | to continue would therefore be declared the |
| In general most bookmakers welcome clients | | | | victors. |
| even though they might realise that they are | | | | The problem of course is predicting when any |
| arbitrage traders. They realise that whilst in some | | | | match might be terminated early. Bookmakers |
| instances the wager placed with them might win | | | | have addressed this by laying down rules as to |
| there is also an equal chance (strictly speaking of | | | | when they consider that a match is valid i.e. it has |
| course the odds on offer should reflect the true | | | | progressed enough for the result to stand. |
| chance) that it would lose, hence they would | | | | Unfortunately for us as clients the bookmakers |
| make a profit. So, whilst they may not publicly | | | | do not all apply the same rules and if you place |
| acknowledge that arbitrage traders are | | | | wagers with wildly differing rules you could end up |
| encouraged they recognise that it will bring | | | | with a losing trade which could prove costly. |
| business and ultimately enhance their reputation | | | | As tennis is a particularly good sport for arbitrage |
| by having a growing and active client list. | | | | opportunities it is very important to ensure that |
| Some bookmakers however can be more | | | | you only place trades with bookmakers who have |
| guarded in their acceptance of clients. In my | | | | similar rules. |
| personal experience I ended up with two | | | | Clearly no tennis player wants to forfeit a match |
| bookmakers who limited the amount I was | | | | so matches stopped part way through are not |
| allowed to place on any wager as they had | | | | that common, hence as a trader you may decide |
| monitored my wagering activity and believed that | | | | to ignore the difference in rules and trade |
| the pattern of trading was suspicious. Now, I | | | | anyway. The decision would be yours, the risk |
| must state immediately that I was in no way | | | | may be slight but it does exist and if you have a |
| placing large wagers. My bets would be in the | | | | limited bank then perhaps being conservative in |
| region of $300 as a maximum which in betting | | | | your trading strategy might be the wise course |
| terms is of little real consequence. Despite this | | | | of action. |
| two bookmakers imposed limits on how much I | | | | Money Management |
| could place, in one instance I was limited to $20 | | | | Unless you have a sizable disposable income |
| per wager which clearly drastically limited any | | | | available to you the chances are that you will |
| potential for a reasonable profit. | | | | have to start arbitrage trading with a limited bank. |
| You might say of course that all I needed to do | | | | If this is the case then it is important that you |
| was to avoid trading with those bookmakers but | | | | study carefully which bookmakers are providing |
| this was difficult given the fact that the trades | | | | the most arbitrage opportunities so that you place |
| notified to me involved these bookmakers on a | | | | your funds wisely. |
| regular basis so I would have severely restricted | | | | As you start to trade you will soon notice that |
| my trading if I removed these two bookmakers. | | | | management of your money can be a key issue. |
| Ironically of course I know of many arbitrage | | | | By it's very nature an arbitrage trade will end up |
| traders who wager much larger sums of money | | | | where one of your wagers has lost and one has |
| than I wanted to with these same bookmakers | | | | won. So, for the winning side of the trade the |
| but who have had no problems whatsoever. | | | | amount of funds with that bookmaker will |
| Odds change such that the arbitrage no longer | | | | increase and conversely your funds with the losing |
| exists | | | | bookmaker will decrease. |
| In the type of arbitrage trading that I was doing | | | | It doesn't take much to appreciate that if you |
| the opportunities to profit would only be available | | | | have a streak of winners with one or two |
| for a short time. The software I used had direct | | | | bookmakers then your funds may now be |
| feeds from the bookmaker websites, it then did | | | | unevenly distributed and will therefore restrict you |
| the relevant calculations to then present me with | | | | from perhaps trading all the opportunities that you |
| arbitrage opportunities. | | | | would like to. |
| If you were not quick enough you could find that | | | | One recommendation is to keep part of your |
| having placed one side of the trade when you | | | | overall bank back so that if this situation arises |
| went to the other bookmaker site the quoted | | | | you will have some funds still available to top up |
| odds were no longer available and you were left | | | | the bank in the losing bookmakers. This works to |
| with the potential of a loss on the trade. | | | | a certain extent but again with a limited bank |
| In these circumstances the advice is to 'hedge' | | | | overall it may not always be possible. |
| your trade. In simple terms this means finding a | | | | The problem is compounded by bookmaker rules |
| bookmaker where the odds on offer would result | | | | that can place restrictions on how may |
| in you breaking even or at least minimising the | | | | withdrawals you can make from your account in |
| potential loss. The problem of course is that to | | | | any given time period. Whilst additional withdrawals |
| take advantage of the odds on offer you would | | | | may be possible they will often come with a |
| need to have sufficient funds with the particular | | | | hefty fee attached and any profits that you have |
| bookmaker and that can sometimes be a | | | | made could be reduced significantly. |
| problem (see Money Management below). | | | | In conclusion I still believe that Sports Arbitrage |
| To help you find odds that could be used you | | | | Trading has a lot to offer but for an individual it is |
| should refer to a site such as Odds Checker | | | | difficult. I'd recommend that you research online |
| where they compare odds from a range of | | | | investment companies where you can invest but |
| bookmakers. | | | | they do the work for you. This is a much safer |
| Bookmakers have different cut-off times for | | | | option and can still provide very healthy returns. |
| trades to be placed | | | | |