Seize the Sure Bet, Secure your Profit

The Arbitrage Betting Strategy

Arbitrage Betting, also known as “arbing”, is a strategy to reduce risk by betting on all possible outcomes of an event using different bookmakers or betting exchanges. This strategy lets you take advantage of differences in odds to make a sure profit, no matter what actually happens in the event.

Unpacking the Arbitrage Betting on Betting Exchanges

In the context of betting exchanges, arbitrage betting has to do with systematically take advantage of variations in odds offered by different users on the same platform. Unlike traditional bookmakers, betting exchanges give room to peer-to-peer betting, which enables bettors to both back and lay outcomes, which means that they can bet for or against outcomes. This difference opens up new chances for arbitrage betting.

Unpacking the Arbitrage Betting on Betting Exchanges

In the context of betting exchanges, arbitrage betting has to do with systematically take advantage of variations in odds offered by different users on the same platform. Unlike traditional bookmakers, betting exchanges give room to peer-to-peer betting, which enables bettors to both back and lay outcomes, which means that they can bet for or against outcomes. This difference opens up new chances for arbitrage betting.

The Strategy

Identify Arbitrage Opportunities

The first step in this strategy is to identify an event with multiple possible outcomes, such as a tennis match with two players for instance.

Browse different betting markets within the betting exchange platform in order to find odds differences between the “back” and “lay” sides of the same outcome.If you wonder how these differences are created, well it is due to differing opinions among the bettors about the possibility of an outcome.

Place the Bets

Once you have calculated the stakes for both the back and the lay sides of an outcome, it is time to place your bets simultaneously.

Make sure that the total amount you lay on the exchange which indicates your potential liability is less than the total amount you stand to win on the back side. This difference represents your guaranteed profit.

Calculate the Optimal Stake

Precise calculation of the optimal stake for each outcome is extremely important to ensure a guaranteed profit. This calculation should take into account both sides of the bet – back and lay – and the commission fee the betting exchange platform charges.

To make it easier, use arbitrage calculators that factor in the odds and commission fees to generate precise stake recommendations.

Monitoring & Adjusting

Upon placing your bets, you need to monitor them closely and be prepared to make adjustments if need be. You need to remember that the odds on betting exchanges fluctuate more quickly, and this may impact the profitability of your arbitrage opportunity.

The Risk Factor

While arbitrage betting on betting exchanges offers many opportunities for guaranteed profit, there are critical factors to consider.

First of all, you need to be aware of the market liquidity. It is essential that there be sufficient liquidity on both the back and lay sides of an outcome, because this will allow you to place large bets. Illiquid markets may limit your ability to place sizable bets.

Another important thing to take into account is the commission fee charged by the betting exchange on your winning bets. This fee can significantly affect your overall profit margins, so you need to include it into your calculations.

We remind you that betting exchange odds can change rapidly, particularly in liquid markets. Quick reflexes are of paramount importance to secure arbitrage opportunities.

Step 1: Identify the Arbitrage Opportunity

For the sake of our example we will say that you bet on two different betting exchanges. On the Betting Exchange 1, the odds for Player A winning are 2.5 and the odds for Player B winning are 3.0.

On the Betting Exchange 2, the odds for Player A winning are 2.7, and the odds for Player B winning are 2.8.

Step 2: Calculate the Optimal Stake

Assuming that you want to wager $100 in total and the commission fee on Betting Exchange 1 is 5%, you need to calculate the optimal stake using an arbitrage calculator.

For Outcome 1 (Player A winning)

Betting Exchange 1: Odds of 2.5
Betting Exchange 2: Odds of 2.7

Optimal Stake on Exchange 1 = ($100 / (2.5 – 1) * (1 – 0.05) = $36.84 (after deducting the 5% commission fee)

Optimal Stake on Exchange 2 = ($100 / (2.7 – 1) = $37.04

For Outcome 2 (Player B winning)

Betting Exchange 1: Odds of 3.0
Betting Exchange 2: Odds of 2.8

Optimal Stake on Exchange 1 = ($100 / (3.0 = 1) * (1 – 0.05) = $31.58 (after deducting the 5% commission)

Optimal Stake on Exchange 2 = ($100 / (2.8 – 1) = $35.71

Step 3: Place your Bets

Now that you have calculated the optimal stakes, you need to place your bets simultaneously on both betting exchange 1 and betting exchange 2.

For Outcome 1 (Player A winning)

Bet $36.84 on Player A winning at Exchange 1

Bet $37.04 on Player A winning at Exchange 2

For Outcome 2 (Player B winning)

Bet $31.58 on Player B winning at Exchange 1

Bet $35.71 on Player B winning at Exchange 2

Step 4: Await the Outcome

Regardless of whether Player A or Player B wins this tennis match, your profit is guaranteed due to the odds differentials and the calculated optimal stakes.

With this example we illustrate in the simplest form how arbitrage betting can be done on a betting exchange platform, taking into account the commission fees and using odds from two different exchanges. For securing your arbitrage opportunities, you need to monitor the odds changes and act quickly.

Conclusion

Arbitrage Betting is a clever strategy often used in sports betting. It lets you make money by taking advantage of differences in odds, no matter who wins. But you need to be careful, because these opportunities do not last long, and betting exchanges, although tolerable to arbers, may not like it if you do it too much. When done smartly and carefully, arbitrage betting can be a useful way to make a profit.