Trading - Exploit Price Fluctuations

Trading Example 1

Federer can be layed at 1.15 on Betfair for his match against Haas in the Australian Open. Taking into account the excellent record of Haas against Federer, you believe that Federer’s price will almost certainly rise from 1.15 at some stage during the match. As Haas invariably wins (or threatens to win) at least one set against Federer, you anticipate that Federer’s in-running price will go as high as 1.50.

You would like to spend £750 on the trade. As you will be laying first, you need to find out how much you can afford to lay for that liability. Just open Layer’s Aid, select the Liability option and enter the Lay Price (1.15) and your Liability (750). When you press C, 5,000 is output in the Stake box. This means that if you deposit £750 into your Betfair account you will be able to lay Federer for £5,000 at 1.15.

In Back/Lay, select the Lay Selection 1 stake constraint, enter the current Lay price, the amount that you are laying, the target Back price and your Betfair commission.

Back/Lay instructs you to enter an order backing Federer for £3,833.33 at 1.50. If your bet is matched, you will immediately go all-green to the tune of £1,108.34. You can adjust the target exit price and recalculate the optimal Back stake if you think that Federer’s price won’t reach 1.50.

Laying a selection at a very low price in anticipation of a temporary price rise is the most profitable form of sports betting.

Trading Example 2

Another popular method of sports trading is to chase a price downwards when the market is beset by rumours of match-fixing. In this example, an Italian club team can be backed at 2.25 in the away leg of a UEFA Cup tie. You have heard early rumours that their Albanian opponents may have been incentivised to lose.

You don’t really want to back the Italians to win the match, as some of these rumours can turn out to be unsubstantiated and Italians are not renowned for their attacking play away from home. However, you are pretty sure that the rumours will definitely push their price down to 1.69, and are prepared to spend £1,000 on the trade.

All you need to do is back them at the current price and then enter an order to lay them at 1.68 for £1,331.36. If your bet is matched, you will win an immediate £314.79.

If you miss out on backing the favourite on the exchanges at a good price, you can sometimes find similar prices still available on the coupon in betting shops.

Reproduced with Permission from Arbcruncher.com

Read our full tutorial on Arbitrage