Beginners Guide to Sports Arbitrage Trading and Bonus Scalping

Transcription

1 Beginners Guide to Sports Arbitrage Trading and Bonus Scalping

2 Contents What Is Sports Arbitrage Trading? What Is Bonus Scalping? Risks of Sports Arbitrage Trading? Betfair/Betdaq The Spreadsheet Worked Examples & Calculations

3 What is Sports Arbitrage Trading? Sports Arbitrage Trading, quite simply, is the process of betting on every possible outcome of a particular event and profiting no matter what the outcome may be. This may sound very simple and it is! There are some fundamental rules one must follow in order to become a successful sports arbitrage trader and through this guide you will learn these rules and familiarise yourself with the world of arbitrage. Firstly, I am going to answer some very relevant and frequently asked questions. Is it legal? Sports Arbitrage trading is 100% legal, providing gambling and online gambling is legal in your country. For example, if you live in the United Kingdom, then Sports Arbitrage Trading is entirely legal, however if you live in a state of the USA where gambling is prohibited, then unfortunately, Sports Arbitrage Trading is illegal for you. How do these Arbitrage opportunities arise / Why do bookmakers allow it? The gaming industry is extremely competitive, with bookmakers constantly competing against each other. You will see this through all the promotions they offer, special offers on big events and sign up bonus to try and entice punters to their business. We will go into how to take advantage of these in further detail later on. Arbitrage opportunities arise where either: a) A bookmaker has priced one side of an event up differently to the rest of the market. For example, If Manchester United play Chelsea at home. Most bookmakers may price the game up fairly even, however another bookmaker may fancy Manchester United as favourite, therefore pushing the price of Chelsea to win and the draw higher. This produces an arbitrage trade, or an arb. We will go through a worked example of an arb later on. b) A PALP bet has been set up. This is where a bookmaker prices up a game differently deliberately to lure reckless traders into exposing themselves. This is a prime example of where accounts become limited. Most Arbs are around the 3-5% profit mark of your total stake. There are many arbs lower than this, however they are often not worth investing in as this will tie up your money and if a bigger arb becomes available you will miss out on potential profit. PALP s are usually set up at around about 10%+. There are legitimate arbs in excess of 5%, however it takes a very experienced trader to be able to tell the difference between a PALP and an ARB of this magnitude. The percentages and other calculations will be explained in further detail later.

4 Is it true that my accounts will become limited? If a trader is reckless then yes, some accounts may become limited. However if you trade smart, you will be able to avoid this. Many traders open accounts in family and close friends names, so that they have many accounts at each bookmaker. This way they are able to change between accounts rather than acting on one account and flagging up as an arbitrage trader. Some bookmakers do actually encourage arbitrage trading, especially betting exchanges, as here you are not betting against the house, but other punters. For example, you will never be limited on Betfair or Betdaq! How sustainable is Sports Arbitrage Trading? The two key elements of Sports Arbitrage Trading are: - Organisation - Concentration If you follow specific guidelines and concentrate then it can be a very sustainable form of income. Some people trade casually around their daily lifestyle, however many do also trade for a living. Of course these people are very experienced traders with an extremely large trading capital and it is not advised that you throw in your day job and become a full time trader. Where are these arbs found? Sports Arbitrage opportunities are found through specialist software. Software which scans the markets across hundreds of bookmakers with real time odds can be downloaded from the internet, however this can be very expensive. Two of the most reputable companies offering this software are Rebelbetting and Mathbet. This costs around 80 a month for one software. Why haven t I heard of this before / Why doesn t everybody do this? Sports Arbitrage is well known and well-practiced across the world. A lot of people tend not to take an interest in Sports Arbitrage trading as they jump to conclusions and assume it doesn t work. When dumbed down, sports arbitrage trading is effectively gambling with guaranteed profit. A theory many don t believe as they don t take time to read up and understand it. How much will I need to start with and how much can I earn? The most important part of all, the money. People always ask how much is a good starting capital and how much can I make? Well this relies entirely on you. The more trade capital you have, the more profit that can be made. As a benchmark you should aim to earn between 10-20% a month profit of your trade capital. For example, if you start with 1,000

5 you should aim to make between in your first month. Of course this depends on how quickly you move your money between bookmakers, where the arbs occur and at what percentages. For beginners, you should re-invest any profit into your trade capital so that you can increase your profit each month. Some months you might earn more and some you may earn less. Of course this also depends on how much time you can dedicate to trading. A great way to add to your trade capital is to take advantage of the sign up bonus which bookmakers offer. As you will need to open accounts with as many bookmakers as possible to maximise arbitrage opportunities, it is best that you take advantage of the bonus whilst doing so. In this guide you will find out how you can turn the free bet bonus into extractable cash, through risk free betting, otherwise known as Bonus Scalping. What is Bonus Scalping? Bonus Scalping is very similar to Sports Arbitrage Trading, it is a form of risk free betting in order to make guaranteed profit. However, with Bonus Scalping, the aim is to take advantage of the free bet sign up bonus that are on offer with all the bookmakers. The calculations are slightly different to that of an arb, and to successfully complete a scalp, you don t necessarily need an arb. By placing a series of bets we activate the bonus and then turn it into free extractable cash. There are some rules for bonus scalping that you must follow in order to be successful. 1. Always read the terms and conditions. This sounds like an extremely long and tedious task, however it is essential that you do, and the terms and conditions for sign up bonus don t tend to be too long. It is vital that you read the terms and conditions and understand the requirements before you can withdraw the cash. Some bookmakers may have a rollover requirement. If the sign up offer is a 50 matched free bet, you may be asked to bet the total of the deposit and the bonus 2x. So you would need to stake in total 200 with this bookmaker, being 2x your deposit ( 100) and 2x your bonus amount ( 100). Many bookmakers have a minimum odds requirement. This means that bets must be placed on bets with odds at least evens (2.00). Any bets placed on odds lower than this wont count towards the bonus and will result in lost profit, so make sure you read the terms! Timeframe. Some bonus will expire after a certain time period, so make sure you know how long you have to complete your scalp!

6 Make sure that the bookmaker you re signing up to accepts punters from your country. Worst case scenario is that you manage to deposit money and end up with a large sum of money in an account in a country where you cannot withdraw your funds. 2. Always double check your calculations The same applies for Arbitrage trades, it is imperative that you always double check your calculations and stakes before placing any bet. The calculations are slightly different to the arbitrage trades, however this slight calculation have a massive impact on your profit. We will go into calculations in further detail later on. 3. Track your progress Along with this pack you will have received a spreadsheet template with formulae already set up. This spreadsheet is designed so that you can track both your profit and where your money is. Make sure you fill out each bet and each transaction in the accounts section. Also after each deposit and withdrawal make sure that your bank account reconciles with what you have on the spreadsheet. Risks of Sports Arbitrage Trading? Sports Arbitrage trades themselves are 100% risk free, however, the potential risks lie with the individual trader. Inexperience, lack of concentration and a lack of research can lead to mistakes and mistakes lead to losses. Some key risks are highlighted below and explained how these can be avoided to make trading risk free! - Inexperience The biggest reason mistakes are made is down to inexperienced traders. When starting out, understandably, you may be excited, nervous and slightly erratic. You may think you have found an arb when in fact you have read the odds wrong and will make a loss. Or you may have miscalculated your stakes and may put the wrong amount of money on the different sides of an arb. The odds may have changed and you have not realised and carried on with the arb, which no longer exists. This can easily be negated through organisation and concentration. If you are not feeling confident, then do not start lumping your trade capital on a single arb. Take it slower and perform many arbs with much smaller stakes. Slowly build an understanding and see the profits. This way if you do make any mistakes, the impact will not be significant and you can learn from your errors. - Change in odds Some arbs are only available for a limited time, as once people start to bet on an outcome, the price will shift, known as being backed in or drifting out. If a trader

7 hesitates with one side of a bet, then there is a chance that the odds can change and the arb will disappear. This can occur after you have placed one side of the arb, and you will be left having to look across the market for the next price to cover, and will more than likely result in a loss. The best way to tackle this issue is to place the bets simultaneously. You should have all betslips open at the same time with the correct stakes entered waiting to be confirmed. This way you quickly go through each bookmaker and confirm each side of the arb. Always double check odds haven t changed before confirming. - Bookmaker Rules Bookmaker Rules are another area which need to be looked into before placing any arbs. For certain markets, such as tennis, different bookmakers have different rules, and pay out accordingly. For example in a tennis match one player may retire, the two different bookmakers may pay out in different ways. William Hill may void the match and return your original stake, whilst Coral may take the retiring player and class him as forfeiting and settle bets on him as a loss. If this happens you could be at risk of losing your money. Of course, this could also go in your favour, but there is a risk in this and is essentially just gambling, which is not the aim of Sports Arbitrage trading. If proper research is carried out then this can easily be avoided. - Doubling Up Another potential risk for traders is that you place the wrong bet and back the same outcome twice. For example, if you were placing a bet on over 2.5 goals on one site and under 2.5 on another site. On one site the odds for both sides of the bet may be the same and though a lack of concentration you may back the same bet twice. This can result in a large amounts of money being staked on one side of a bet and can be very risky. Another example of why you must take extra care when trading and concentrate at all times. Betfair/Betdaq Betfair and Betdaq are betting exchanges. These are different to bookmakers as your bets are not placed against the house. Instead there is a market where your bets are matched against fellow punters. Betfair and Betdaq effectively work as the middle man setting up bets. Betting exchanges take a commission on any bets won, rather than take bets themselves. Because of this they actively encourage arbers and scalpers, as any bets placed with themselves is all profit, you will never be shut down on betfair/betdaq for arbing/scalping. Betfair take a 5% commission and Betdaq take a 3% commission. Although Betfair s commission is higher than Betdaq s, it has a much more liquidated market and there is a lot more money available, making it more useful than Betdaq. When calculating any scalps or arbs, you must remember to take into account the commission. With Betting

8 exchanges you can bet two ways; by Backing or Laying a result. Backing the result is simply selecting the bet and choosing it to win. Laying is the opposite. By laying a bet, you are effectively becoming the bookmaker and backing against the result. For example if we back AC Milan to beat Juventus, then if AC Milan win this match, your bet will win. If Juventus win or it is a draw, then you lose. If you Lay AC Milan in this match, then an AC Milan win means you will lose your bet, however either a draw or a Juventus win means you will win your bet. This is easy to understand, however you must understand how the stakes work on betting exchanges, otherwise you can end up placing the wrong amount of money on an outcome. When laying a bet you will have the option of entering a stake. Don t be confused, this is not your stake. THIS IS THE AMOUNT YOU WISH TO WIN. LIABILITY IS THE AMOUNT YOU STAND TO LOSE. Another Key aspect to betting exchanges is the liquidity of the market. Before placing any bets, you should always View full market. Underneath the odds, you will see a monetary amount. This is how much money is currently available at the price above in the box. Once this amount of money has been matched, the price will shift. Before placing a bet, you should make sure that there is enough money in the corresponding box to your required odds to cover your backers stake. The Spreadsheet Alongside this document you will have received a template spreadsheet. In this spreadsheet you will see five tabs. - Bookmakers - Arbitrage - Scalping - Accounts - Bank We will now go into each page in more detail so you can understand what their purpose is and how to use these efficiently. Bookmakers This page is designed to give you a list of reputable bookmakers to sign up to and to track which ones you have accounts with and what stage you are at in terms of scalping. You can also record your login details to keep track of all your account information. Arbitrage As you can see here the table has been formed with the formulae in place, all that needs to be done is to enter the information for each arb as they occur. Check that the figures and everything is correct with the calculator and that you are satisfied. Scalping This is similar to the Arbitrage page and is designed to track your profit when bonus scalping. Make sure you record every transaction and that profit matches every step of the way as it can get very confusing if you don t keep it updated.

9 Accounts Use this page to track which accounts have been opened and track your money. Update this regularly, after each bet if possible. You will also be able to use this page to see whether money is being processed between the bookmaker and your bank account, so you don t lose track of your funds. Bank By integrating this with the rest of the spreadsheet you can successfully reconcile your accounts to your bank and make sure your profit is correct. You will also be able to note any personal withdrawals from your capital here. Worked Example & Calculations Some important things to remember when working out your stakes for arbitrage trades or scalps. BETFAIR 5% COMMISSION Remember, that with every bet you place on Betfair, this will usually be Lay bets, Betfair will take 5% commission from your WINNINGS. Note, they do not take commission from your stake, only the winnings. You must take this into account when working out stakes otherwise you will end up with less of a profit. ODDS There are three ways bookmakers display the odds of a bet. These are: UK style (Fraction) EU style (Decimal) American (+/- Number) It is easy to convert these odds and to keep things simple, you should try to operate in the European format of decimals. To convert the fraction simply divide the fraction then +1. For example odds of 5/4 would become This is 1.25 (5 / 4) + 1. To convert an American number simply divide by 100 then +1. For example, This is the equivalent to Divide 200 by 100 to get 2.00, then +1 to get How to identify an Arb Software will locate arbs for you, you will simply have to work out stakes and place the correct amounts. However, if, for example, the odds change and you want to know if it is still an arbitrage opportunity, then perform the following calculation: Take the odds of each side of the arb and convert to EU format if not already done so. Then divide 1 by the odds to find the reciprocal and multiply by 100 to get a percentage.

10 For Example: Andy Murray (5/4) v Rafael Nadal (9/10). First, convert these into the respective European odds. Andy Murray = 2.25 Rafael Nadal = 1.9 Next, take each side of the bet and divide 1 by the new European odds to find the reciprocal. Andy Murray = Rafael Nadal = Next multiply these new decimals by 100 to get a percentage and add them together. If the total is below 100% then you have an arb. The difference between the total percentage and 100% is your profit%. Andy Murray = Rafael Nadal = Total = % Calculating Stakes Now that you ve worked out your percentages, you need to work out your stakes. To work out stakes for each side of the arb, simply take you total stake and multiply this by the percentage, then divide by the total percentage. Following the previous example; Our total stake for this will be 1, Andy Murray (1000 x )/ = Rafael Nadal (1000 x )/ = Total stake for this bet is now 1, Lets have a look at the potential returns: Andy Murray (5/4) Returns Rafael Nadal (9/10) Returns Giving us a total profit of 30.12

11 Performing a Scalp Scalping is very similar to Arbitrage Trading however there are some differences. A scalp will require more than 1 trade and will have a different sets of rules depending on the bookmaker. The most common is a Free matched bet, with the free bet being Stake not returned. This means that if your free bet wins, you will not be given your free bet stake back. Follow the example below: Betfred are offering a free matched bet of 50. To qualify for this you must stake 50 at odds of at least 1.5 (EU odds) and the free bet is Stake not returned. First we must stake the 50 of our own money. The game we are choosing is Barcelona v Real Madrid and the market we are choosing is Barcelona to win. We must back all outcomes of this event to ensure no risk. On Betfred we can back Barcelona at 4/5 (1.8) and we can LAY Barcelona on Betfair at Stake 50 on Betfred, returns a total of 90. On Betfair, our liability will be 41.70, Backers stake 50.85, Returns Our total stake here is ( 50 Betfred Betfair) and potential return is 90/ The loss for this first bet is 1.70, however we have now qualified for a 50 free bet. Next we need to find an event on Betfred with odds of at least 4.00 (EU format). For the second bet, we will take Manchester United v Everton. On Betfred, we can back Everton to win the game at 7/2 (4.5) and we can LAY Everton on Betfair at Stake 50 Free bet on Betfred at 4.5. As this is stake not returned we do not get our 50 free bet back, so the odds are effectively 3.5. The returns for this bet is 175. On Betfair, can LAY Everton at Liability of , Backers stake 38.89, Returns Remember, the free bet isn t our money, so we don t include it in the total stake! Total stake for this is and the total returns is 175/ This gives us a profit of 36.94/ for the second bet. 1 st Bet Loss of nd Bet Profit of Total Profit = (70.48% of 50 Free Bet)