Sports Trading – What is all about?

Sports Trader – a profession that becomes more popular. It is a mix of sports betting and standard financial trading.

Requires knowledge of both stock market realities as financial institutions and knowledge of the sports market. However, it does not require knowledge about sports, or just a little. Much more important is to learn how the market behaves, what has an impact on the price in the events.

Sports trading is in simple words, trading with sports betting odds. The main goal is to place two opposite bets for one event. In sports trading, those bets being called: Back and Lay. You will find It very similar to selling and buying in regular stock trading exchanges.

BACK (will happen) – when you sell such an odd, it means that a given event will find its place in reality.

LAY (will not happen) – when you buy such an odd, that the given result will not happen.

In a nutshell, you make money every time you manage to sell at a higher value.

You can place your bets on betting exchange, which is a platform where an average betting customer can bet against others. Unlike standard sports betting, where you place bets using the odds provided by the bookmaker, sports trading happens between the traders. The betting exchange is simply providing you with the platform and charging a commission on winnings.

The most popular betting exchange platforms are Betfair, Betdaq, Smarkets, Matchbook.

The industry leader – Betfair is the largest, most popular betting exchange. It was formed in 2000 and since that time has the largest number of members, meaning that the liquidity beats that of any other exchange. Betfair was the first betting website that allowed trading and laying.

If you want to learn how the exchange works, I strongly encourage you to subscribe to my newsletter from which you will get practical knowledge about different strategies.

Sports trading has a distinction between Pre-Play and In-Play trading.  The first one means trading and closing the market before the event begins. The latter refers to traders who play on markets during the match.

Let’s make a simple pre-play trade to help you understand the process.

The Back (in favor of) odds for Manchester Utd are 1.58. To make a profit you need to set Lay odds below the mentioned price. In this example I have set it to 1.56:

The Back bet profit would be £58, while the Lay odd liability would be £56 if the Lay bet gets matched, which had happened after some time:

In a scenario where Manchester Utd wins, you can calculate your sports trade profit by subtracting the £56 liability from the £58 Back bet profit and earn low-risk £2 minus 2% commission that gives you 1.96£.

At this stage, you have two possibilities:

1) run it as “free bet” – hoping that Manchester Utd will win the game, but not losing anything if they do not manage.

2) hedging/greening – to spread results to all outcomes, which is your main goal as a trader. You can simply do it through Betfair interface by clicking the Cash Out yellow button, or through dedicated trading software, which I prefer.

Can anyone become a Pro Trader? Yes, but although a lot of people try their hand, few become professionals. Patience, emotionless approach, long-term view of your career path are necessary elements to become a successful trader.

The process of learning the realities of the sports exchange is long and tedious, but I will show you how to shorten it and how to avoid bankruptcy!