How to Use, Cross Market Arbitrage, on Betting Exchanges
Cross market arbitrage is a betting strategy that bettors use to make a sure profit. They do so by spotting differences in odds prices across various betting markets and use them to their advantage. It is a concept a bit complicated to many bettors, but understanding it well it can help bettors start using it on betting exchanges.
What Is Cross Market Arbitrage?
In cross market arbitrage, bettors place bets on many outcomes of the same game across multiple markets in order to secure a profit without relying on the game result. Bettors spot discrepancies in odds offered by different bookmakers and betting exchanges and use them in order to cover all possible outcomes of a game and lock in a profit.
For example, in a tennis match a bettor wants to bet on a player to win. A betting exchange offers better odds for this player and another betting exchange offers better odds for the other player. The bettor uses cross market arbitrage and places bets on both players in both exchanges and secures a profit regardless of who wins.
How Cross Market Arbitrage Works
Cross market arbitrage works by finding opportunities where the odds for all possible outcomes of a game add up to less than 100%. This means that the combined implied probability of all possible outcomes is lower than 100%. This is very important because it allows bettors to generate a profit.
Why Cross Market Arbitrage is Popular
Cross market arbitrage is popular among bettors because it offers a chance to make risk-free profits. Unlike traditional betting, where you risk losing your money if your prediction is wrong, cross market arbitrage secures a profit. For this reason, it is an attractive strategy, especially for experienced bettors.
Another reason why cross market arbitrage is popular is the rise of online betting exchanges. Betting exchanges allow betting for an outcome and betting against it. Because bettors compete against one another, the odds are varied. So bettors can find plenty of markets for the same event to bet on and differences in odds as well, creating more chances for cross market arbitrage.
The Pros of Cross Market Arbitrage
Cross Market Arbitrage offers many benefits. The most significant is the guarantee of a profit, regardless how the event will result. In this strategy, the aim of bettors is to cover all possible outcomes.
Therefore, there is minimal risk. The only risk is the possibility to make mistakes in calculations. Bettors usually tend to forget including the commission fee charged by the betting exchange when making their calculations which often leads to profit loss.
The strategy sounds complex at first, but it is a relatively easy to learn method and execute it with a bit of practice. Now that there are many online betting exchanges available, cross market arbitrage is more accessible than ever.
The Cons of Cross Market Arbitrage
While cross market arbitrage is a strategy with many advantages, it has its challenges. The most significant challenge is that there are limited opportunities for true arbitrage. Even if there are many opportunities, it is challenging for bettors to take them, because they can disappear quickly as the market adjusts. They need to be fast in order to use these opportunities to their advantage. Some betting exchanges impose betting limits on how much bettors can bet, which can restrict the potential profit from arbitrage.
Another challenge is to keep a profitable account without being banned. Frequent wins from cross market arbitrage sometimes lead to account restrictions by bookmakers or exchange brokers who do not favor this type of betting. Another challenge bettors often face when using this strategy is complex calculations. Calculating accurately what the stake should be for each bet in order to secure a profit from all possible outcomes regardless how the match will result, can be very tricky especially for beginners. Mistakes in calculations are very common and they lead to losses instead of profits.
Tips to Overcome the Cross Market Arbitrage Challenges
Cross market arbitrage can be tricky, but there are ways to overcome the challenges and be successful.
In order to avoid complicated calculations and simplify the process, it is helpful to use arbitrage betting tools that automatically find opportunities on a betting exchange and calculate the stakes for you. Beginner bettors need to become familiar with the strategy and practice and try different markets to get more skilled. For this reason it is good to start small and place small bets in order to understand the process better and avoid losing their money if they make a mistake.
It is very important to monitor the markets and the odds and develop the skill to sport opportunities quickly when they occur. Searching for diverse markets is key to this strategy. Bettors usually limit themselves to just one sport or market.
The more markets they explore, the more arbitrage opportunities they will find.
In a Nutshell
Cross market arbitrage is a very popular strategy bettors use on betting exchanges in order to make consistent profits with minimal risk. Bettors spot differences in odds across multiple markets, and they place bets to cover all possible outcomes. While this strategy can be challenging, with practice and the right tools, cross market arbitrage can be very rewarding.