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In Sports Trading, arbitrage involves backing multiple outcomes on the same event for a guaranteed profit. The net probability of the arbitrage opportunity (as defined by the Odds at the time the bets were taken) must be lower than 100%. For example, if the Odds of all outcomes were 97% then a 3% profit is assured, irrespective of the result. In Sports Trading, arbitrage opportunities are also known as 'arbs' or 'sure bets'.

Sports with a low number of potential outcomes are favoured for arbitrage because they are easier to calculate and less likely to change while bets are being placed. As such, tennis or snooker may be easier than football (soccer) because there are just two outcomes. Since those sports are popular with arbitrageurs, however, sometimes less obvious opportunities may be available for a longer period with other sports that are less frequently associated with arbitrage.

Many potential arbs quickly disappear because as money flows into a mis-priced sports market, bookmakers will shorten the Odds to increase the price. While it is theoretically possible to take advantage of the more favourable Odds usually offered by betting exchanges, the commission most of them apply to any winning bet will frequently cancel out the profit.

Arbitrage bets must be initiated at the same time. While it is possible to open one side of the bet and lock-in a profit at a later time, this is not genuine arbitrage, since there is the possibility that the Odds will not move in the required direction to enable a profit to be made.
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Contributed by: Ralph Windsor







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