Even though sports trading sounds like a new concept to many bettors, it is actually something that has been around for several years now. This interesting combo of sports betting and trading is the perfect way of earning good profits on your favourite sports teams. As complicated as sports trading sounds, it is actually very easy to understand and start practising. Inexperienced sports traders, however, will have to have a starting budget, read sports trading strategies and learn the craft before investing large sums of money in it. So, this sports trading theory is the perfect way to get started and learn all a sports trader needs to know about sports exchange and trading.
As sports trading is a mix of sports betting and standard financial trading, the best way to explain it is to explain these two concepts separately.
Sports betting is when a bettor makes predictions on sports events outcomes. To do that, bettors place real money bets, try to get the best odds and wait to see whether they made the correct predictions.
On the other hand, trading is buying and selling shares or commodities, while profiting from the price difference. In other words, a good trader invests in shares whose price is low and then sells them once the price goes up. For example, they invest £100 in a single share; afterwards, they sell that same share for £150, making a neat £50 profit along the say.
Well, sports trading is, in a way, trading with sports betting odds. However, the trick in sports betting is placing two opposite bets for one event; the purpose of this is profiting from the variation of their value.
To make this easier to understand, there are two basic bets in sports trading: Back and Lay. These two correspond to selling and buying in regular trading. So, when you place a Back you are actually selling a share while placing a Lay bet equals buying a share. You make money every time you manage to sell at a higher value.
You can do it at betting exchanges. The most popular one is, naturally, Betfair. They in a way invented sports trading and are now considered a top-class sport betting exchange. Betfair offers a great platform, fair odds and lots of other sports traders who are likely to match your bets.
Unlike standard sports betting, where you simply 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 commission on winnings.
This means that in order to do sports betting you must either match bets placed by other users or place your bets and wait for other users to match them. The platform shows instantly available bets as well as odds limits within which you can place your own offers.
Once sports trading is explained, what anyone must wonder about is how to make and calculate profit. Well, the short way to explain it is saying that the profit from a trade is calculated by subtracting the liability from the Back bet profit.
For example, let’s say there is an upcoming match between Liverpool and Arsenal. The Back (in favour of) odds for Liverpool are 1.99 and the Lay (against) odds for Liverpool are 1.96. In case you bet £100 on each option, the Back bet profit would be £99, while the Lay odd liability would be£96. In a scenario where Liverpool wins, you calculate your sports trade profit by subtracting the £96 liability from the £99 Back bet profit and earn low-risk £3.
There’s no doubt that certain traders may feel £3 is too low of a profit. However, you must take into consideration the fact that it is often much smarter to invest in guaranteed low profits than to place highly profitable, but also high-risk bets. After all, sports trading never ends and if you invest larger sums in the bets. Plus place bets on a regular basis the small profits will quickly add up into a hefty sum.
We should mention, though, that smart sports trading comes with certain risks too. In the previous scenario the option for a draw was ignored; in case of a draw, you wouldn’t win anything. There are, however, certain adjustments that you can do in order to maximize your chances.
Now that you know all about sports betting and exchanges, we would like to list a few tips for beginners. These will help you make smarter choices and perform better.