I have a site called Betfair Trading Tips, which gives free sports trading advice. On Steemit we have plenty of crypto-traders and a fair few sports fans; however how many of them mix their passions and trade sports? What is sports trading and is it similar to trading cryptocurrencies?
In this article we will explore the answers to those questions, by taking a look at sports trading and if we can apply the same rules of crypto trading to this discipline.
The Exchanges
First of all to trade sports, just like if you are trading stocks or crypocurrencies, you need an exchange, and Betfair is the largest one of these in the world today. The second largest is Betdaq however it has a tiny market share compared to Betfair, and this as we'll see later is crucial.
Unfortunately for some Betfair is not available globally, dependant on the gambling laws of individual countries like the United States. However with the rise in popularity and increasing of quality of VPNs, these laws are largely ineffective for somebody who wants to trade on Betfair.
So How Does It Work?
Trading in sports has similarities to more conventional trading, in that you can buy into things that you feel will rise in value, and bet against things that you feel will fall in value.
For instance you may look at a game of basketball, like the one below between the Clevaland Cavaliers and the Boston Celtics. In this instances there are a number of things you can trade, turn your attention to the top of the screen, whereby the odds for the outcome of the game are placed.
Now we can clearly see that the cavaliers are clear favourites to win the match, as depicted by their odds in blue at the top, of 1.2. This means if you put $10 on the Cavs, you will receive $2.00 back, plus your original stake of $10. That's because 10 x 1.2 = 12.00, this form of odds making is called decimal odds.
Now if you notice the number to the right of that with the pink background, these odds say 1.23, so what is the difference?
The odds in the blue of 1.2, are the back odds, and the 1.23 in the pink are the lay odds. So as I mentioned above, if you wanted to back Cleveland to win, you would simple click the blue box and place your bet.
However if you felt that Cleveland might drop in value by losing the game, or perhaps get off to a bad start. Then you may want to place a lay bet, whereby you say that they won't win the game. When you are placing a lay bet, you stake it with how much the other person has to put on.
The Mechanics Of A Betfair Trade
The Betfair exchange is a centralised peer-to-peer network, meaning that each bet you place, has to be matched by one or more people.
So if you place a ten dollar bet at odds of 1.2, there is somebody on the other side who is laying the bet at 1.2, so in other words, they are saying "Yes I will take you $10 bet and I will give you $2.00 (plus your stake back) if you win, and I will keep your $10 if you lose.
Therefore if you are placing a back bet, your liability is the money you put down (place $10 - liability = $10). However if you are placing a lay bet then your liability is the backers stake times the odds minus the stake ($10 lay - liability = $10 x 1.2 = $12.00 - $10 = $2.00). Of course you always have to repay the stake, however that was not your money in the first place, so you always minus the stake to work out your total liability.
What this means is, if you have $100 in your account, you can not place a lay bet with odds bigger than 11 (10 x 11 = 110 - 10 = 100). So laying bets on Betfair puts you in the position that the regular bookmaker is usually in. Offering odds on sporting events, and winning the customers' money, should they get their prediction wrong.
However there is one major difference with Betfair, we will explore this below in the tactics section.
Betfair Tactics
As I mentioned above, I have a site called Betfair Trading Tips, in which I give both practical and psychological sports trading advice. If you're interested in finding out more you can link to some of my strategy articles here and here.
So in the interest of keeping this article short and digestible, I will just briefly touch upon a common Betfair tactic.
Short Lay Strategy: The beauty about Betfair, is you can be rewarded for being almost right, that is to say, you may lay a team like the Cleveland Cavaliers who are outright favourites to win their match against the Celtics.
Now just because you have placed the lay against them, does not necessarily mean that you feel they will lose.
You may have information that leads you to believe that it will be a tight match, or that they will start slowly and go behind in the game early on. Perhaps trailing the Celtics for the first two quarters of the match.
In that case you may see that the original back odds, rise from 1.2 to 2. This would mean that before the game you could put your lay bet on them at 1.2, or rather as pictured 1.22.
So in this example we put a lay bet of 15 (GBP) on the Cavaliers at 1.22, giving us a liability (marked in red) of 3.30 GBP. This is because 15 x 1.22 = 18.3 - 15 = 3.30.
Then after they start slowly and their odds rise to 2, you put on another £10, giving you the chance
So then halfway through the match you would have a liability from the first bet of £3.30 if they won, but would recoup £10 from the later bet, putting you in profit to the tune of £6.70, because 10 - 3.30 = 6.70.
If they went on to lose, you would lose the £10 from the second bet, that you placed on them to win, however you would get the £15 from the first bet from when you said they would lose, putting you at a £5 profit (10 - 5 = 5), illustrated below.
Obviously in this example, I have just simplified it, and for odds to jump from 1.2 to 2 halfway through an event, the team would have to be doing pretty badly, plus Betfair take a 5% commission on all winning bets, so your final figures would be £6.70 - 5% (rounded up) £6.36 and £4.75.
However you see the potential to be covered in a market, you get to enjoy the rest of the game knowing that whatever happens you win money. This is something I have personally done many times over, usually betting on the UK soccer markets, but also straying into the international markets. As well as golf, tennis, cricket and boxing.
You can click the following link to go to Betfair and get a £20 bonus; or alternatively if you want to find out more about sports trading strategies then head over to my site Betfair Trading Tips. If you want to get regular updates then click the following link to Subscribe To Betfair Trading Tips.
***** Disclaimer: The site Betfair Trading Tips is wholly owned by me and is in no way associated with the company Paddy Power Betfair or Betdaq. Betfair Trading Tips is an affiliate of the company Paddy Power Betfair and Betdaq, therefore earns commissions for all referrals to Betdaq and the Betfair Exchange and all of its subsidiaries.
HAVE YOU HEARD ABOUT SPORTS TRADING BEFORE? HAVE YOU TRIED IT? DO YOU TRADE CRYPTOS OR NOT? AS EVER, LET ME KNOW BELOW!
Cryptogee