Sports Trading Explained

Sports Trading Vs. Betting: The Differences

In traditional sports betting, the main goal is to predict the outcome of an event. This includes which team will win, the total number of goals scored, etc. However, when trading sports bets, the focus shifts from predictions to capitalizing on movements in the market.

The table below shows the differences between these two concepts:

Sports Trading & Spread Betting: Similarities

Financial spread betting has a lot of similarities with sports betting and trading in particular. Traders speculate on the price movements of financial instruments like currencies, stocks, and commodities, and “place” their bets by contacting a broker. They can either go “long” and buy, or go “short” and sell for profit.

Sports trading involves traders buying and selling bets on sports events to profit from the fluctuations of the odds. Below are some other similarities between sports exchange trading and financial spread betting.

• Both involve using charting tools and technical indicators to analyze market trends and make well-informed trading decisions.
• Both involve speculating on the direction of price/odds movements.
• Both involve identifying favorable odds for entry and optimal odds for exit to maximize profits or minimize losses.
• The accuracy of predictions determines success or failure in both concepts.

How Sports Trading Works

In the sports trading market, the goal is to use the movement of the odds to your advantage. Most sports traders use platforms called “betting exchanges.” These are similar to sportsbooks in a way that they offer odds on sports events, but they’re entirely different in terms of how betting works.

For the odds to even be displayed on a sports betting exchange, there has to be a punters’ pool for the market to work. It’s rather similar to a liquidity pool in financial trading. So, if there’s enough interest in a certain event, with enough traders placing their bets, the odds will be available.

In most cases, the odds on betting exchanges are way more competitive when compared to regular bookies. The thing is that they depend on the bettors’ pool. The higher the number of bets placed on a game, the greater the chance of hitting convenient betting odds.

Sports Trading Example

Betting exchanges like Betfair act as intermediaries, where people can bet against each other. Traders can back (buy) or lay (sell) bets on specific outcomes, anticipating real-time price movements.

For example, a trader might back a tennis player to win at odds of 2.0 for $100. If the odds decrease to 1.8, the trader could lay the same amount to secure a profit. This is called “matched betting,” and it’s one of the main principles of betting exchanges and trading in general. The goal is to mitigate the risk and walk out with a certain profit, assuming there are the right conditions.

Going back to our example, if the player wins, the back bet pays out $200, but the lay bet loses $180, resulting in a $20 gain. If the player loses, the back bet is lost, but the lay bet wins, resulting in no loss.

There are even better opportunities where you can guarantee a profit regardless of the event’s outcome. It is known as creating a “green book.” It is best to utilize specialized software or a hedging calculator to calculate the amount needed to lay for a guaranteed profit.

Software for Sports Traders

Sports traders often use different software solutions to enhance their trading efficiency and profitability. Below are some sports trading software reviews from three popular providers, including their features and pricing plans.

Geek’s Toy

Geek’s Toy is a popular software solution for sports traders, especially on Betfair. It was initially programmed to simplify large amounts of data on exchange. However, with recent updates, it can also be used on other betting exchanges like Matchbook and Betdaq.

The fact that the company is registered in the UK adds to the software’s credibility. The software is considered among the best, if not the best, sports trading software in the UK betting market. It offers many features that give its users an advantage over regular traders.

Gruss Betting Assistant

Gruss Betting Assistant is another popular sports trading app among sports traders. It also offers a range of advanced features to optimize trading activities and increase profitability.

Bet Angel

Bet Angel is another popular trading software known for its comprehensive range of tools and flexibility. It’s also primarily focused on Betfair markets, similar to Geek’s Toy, with a slight difference being the in-house tennis trading model. Here’s a summary of its features:

Why Use Trading Software?

Most punters who are active in the betting exchange use some sort of trading software. Our top 3 listed options above are commonly chosen by gamblers, but there are other options you can explore.

Trading software helps streamline trade execution with features like one-click betting and automation. It comes in handy when navigating fast-paced markets. It also provides advanced tools like customizable charts and automated bots for smart decisions and optimized strategies.

Additionally, trading software allows traders to monitor multiple markets in real time. It helps them react swiftly to changes and capitalize on valuable opportunities. They integrate with popular betting exchanges like Betfair through an online sports trading API. Built-in risk management also helps users protect their capital in volatile market conditions, minimizing losses.

The Best Sports Trading Strategies

Traders can use various winning strategies in sports trading to boost profits and reduce risks. Here are some effective strategies you can apply:

Stealing Small Moves (Scalping)

Scalping is a short-term trading strategy where traders profit from small market changes by placing two close opposing bets. It’s similar to matched betting, as you’d be placing both the “back” and “lay” wagers on the same event. The trick is to follow the game closely and do it at just the right time to profit from your bets.

Trading Price Shifts (Swinging)

Unlike scalping, swing trading aims for larger price movements in volatile markets. Traders seek significant shifts by buying low and selling high. Unlike with scalping, sports traders might hold their swinging positions for a few minutes or even longer, depending on the sport and the type of game.

The goal is to hit a higher profit on substantial differences in the odds, so that you don’t have to spend that much time looking for short-term scalping opportunities with way lower profit.

Pre-event

In pre-event sports trading on the Betfair bookie or any other betting exchange, traders enter and exit the market before the event starts. They place back or lay bets and sell them before the event.

Pre-event trading reduces risks as odds fluctuate very little before the event, except for rare cases like key player absences. However, this strategy requires a substantial budget to realize profits due to small market fluctuations.

In-event

In-event trading involves actively trading sports markets while the event is underway. It’s similar to live betting, only via the sports betting exchange. The trick is to have access to an exchange with rapid odds updates. It can lead to higher profits, but there’s also a higher risk of losing your wagers if you miss out on placing the bet at the right time.

Hedging

Hedging involves placing extra bets on multiple outcomes after your initial wager to ensure a profit, no matter the outcome. It acts as a safety net, minimizing risk by accepting smaller profits and reducing potential losses.

This strategy may look like an arbitrage sports trading strategy, but it’s not. Arbitrage exploits differences in bookmakers’ odds while hedging capitalizes on changing circumstances to maximize returns. Placing a lay bet close to the original odds can minimize losses and preserve overall profit margins in trading.

Dutching

Dutching is a betting strategy where a bettor spreads stakes across multiple options within an event to ensure an equal return regardless of the outcome. This method minimizes risk by increasing the chances of a correct prediction.

It’s particularly effective in sports like horse racing, where there could be dozens of runners. You can use a dutching system and bet on several different horses with the same stake amount, therefore increasing your chances of winning.

Best Trading Strategies by Sport

Each sport presents different trading opportunities and may require specialized strategies to maximize profit. Here are some of the best trading strategies tailored to specific sports:

Football Trading Strategies

Football is a popular option for traders on sports trading websites, especially during big games with high turnovers. One common and profitable strategy is “laying the draw.” Here, traders bet against a draw and exit the market once a goal is scored.

If a goal is scored during the match, the draw odds increase, allowing traders to exit the bet by backing the draw. This strategy allows traders to profit regardless of the match outcome. Other effective strategies in football include laying correct score markets, laying big favorites or underdogs, etc.

Horse Racing Trading Strategies

Odds in horse racing change dramatically before the start of the event. It depends on factors like horses’ form, jockeys, track, weather, or any late-breaking news or rumors. Some traders even engage in insider trading sports betting by learning about these factors from an insider. It is, however, unethical and illegal.

As a result of rapid odds movements, scalping is usually an effective strategy in horse racing. “Laying the favorite’ is also another good method. It involves betting against the horse with the lowest odds to win. The goal is to exit the market with a profit shortly after the race starts, especially if the favorite doesn’t have a strong start. The lower the odds on the favorite, the greater the potential profit within the first few meters of the race.

Tennis Trading Strategies

A usually effective tennis trading strategy is the ‘backing the server” strategy. It involves betting on the serving player before they serve and laying them at the end of their service game to earn a modest profit from price fluctuations. To make this strategy profitable, select players with a service game win percentage of at least 70%.

Cricket Trading Strategies

“Laying the draw” is a common cricket trading strategy where traders bet against the match ending in a draw. As the match progresses, traders may adjust their position by backing the draw if conditions change, allowing them to secure profits or limit losses. Other effective cricket trading strategies include pre-match trading, pre-match scalping, etc.

Golf Trading Strategies

In golf, traders use the “Trading shots” strategy to capitalize on large price fluctuations that occur with each shot played. The aim is to identify situations where the market hasn’t predicted significant outcomes, such as difficult shots or unexpected successes.

This strategy requires quick reactions, decision-making, and excellent liquidity to execute trades efficiently. For example, the market may not react immediately if a talented player makes an unexpected shot. It presents traders with a favorable risk/reward opportunity if they can predict the outcome accurately.

Greyhound Trading Strategies

Greyhound racing odds also experience small price movements shortly before the race starts, so scalping is an effective trading strategy. Other effective strategies include the back-to-lay, swing, etc.

How to Start Profitable Trading

Follow the essential steps below to start your sports trading journey:

• Create an account: First things first, you’ll need to visit a sports trading platform or a betting exchange and create an account. We’d recommend using renowned exchanges like Betfair, Betdaq, or Matchbook.
• Look for profitable odds: Up next, you’ll need to find profitable matched betting opportunities. For instance, if the odds on two goals being scored in a single football match are set to 4.00, and the odds on a single goal being scored are low, chances are that at least one goal is expected. You can bet on two goals and then close your position by betting that no more goals will be scored after the first one is in the net.
• Anticipate the changes: Finding properly matched betting opportunities can be challenging, but it’s easier when you’ve got back/lay options and matched betting tools at your disposal.
• Hedge the risk: If you’re doing some in-play sports trading, make sure to close your position as soon as the odds change to exit the risk. In most sports, you’ll only have a small window of time to hedge the risk, so you’d better act fast.

MINIMUM CAPITAL REQUIRED TO TRADE SPORTS

The amount needed to start trading sports depends on your strategy, risk tolerance, and bankroll size. You can start with a small amount of money, but it’s better to have enough funds to handle losses and meet margin requirements.

KNOWLEDGE

You should understand sports, market dynamics, and software in sports trading. Without enough knowledge, you will find it hard to place winning bets, spot profitable opportunities, or manage risk effectively.

We’d advise you to start with some simple terms like “lay” and “back” bets, and make your way through matched betting, scalps, swings, and other terms. Terminology is the key here, since many exchanges have tools and educational materials to help you figure things out. But to use them, you’ll have to be aware of the key terms and expressions.