The Basics
Sports Trading means placing back and lay trades on the Betting Exchanges and primarily on Betfair.
Any Matched Betting experience means you’ll be familiar with betting at a bookie and laying off via an exchange.
Trading is doing the same, but both your back and lay bets are with the same exchange.
By comparison, Betting is usually seen as placing a back bet on one or more possible outcomes in an event.
Say you might decide to back a football team to win or draw. You are taking a position on a particular result.
The upside is that if you are right you collect all the winnings based on your stake and price taken. The downside is you stand to lose all your stake if you are wrong.
When you Trade, you are looking to make a profit regardless of the result of the event. In fact, you might not even care or check what the result is having completed your trade.
Trading is typically based on placing your back bets and lay bets on the same Betting Exchange.
Example Trade
You might back a horse at 8.0 for £50. If it wins you make £350. If it loses then you’re £50 down.
That would be a traditional bet BUT you are trading so need to balance the books. You probably won’t have a view whether the horse will win. You will look to lay the same horse on the same exchange for say 7.0.
Your lay stake can be calculated as total potential return divided by the Price you are Laying at.
So, in this example your Lay stake will be £57.14 (£50 x 8.0 / 7.0).
Regardless of the result you’ll make £7.14 less commission (£7.00 at 2% comm).
Not a fortune but the £7 return is 14% of your initial £50 Back stake. Experienced traders will be using higher stakes and making considerably more!
Rinse & Repeat
The sports trading principle is to rinse and repeat subject to whatever method you want to adopt. Trading solely on the exchanges means you won’t have the worry of your bookie accounts being closed.
You will typically place your Back and Lay bets at the same exchange. You will be able to see exactly how much you stand to win (or lose) from your trade.
The betting exchanges make their money from commission charged on the profits people make. They welcome active users and have no problem with some of their customers making large profits.
But Betting Exchanges Seem Really Complicated?
Anyone familiar with Matched Betting will be used to placing bets on betting exchanges like Betfair, Betdaq, Smarkets or Matchbook. You should be comfortable with the way they work even if you haven’t delved into the detail.
You’ll soon get used to the exchanges if you spend a few minutes checking them out. Navigate through the markets & screens, check out features like the price graphs, more obscure betting markets etc.
On the other hand, if you haven’t seen a betting exchange before it can appear quite daunting and complicated. Don’t worry, the basic principles are quite simple.
Find out more at ‘What are Betting Exchanges’.
There are key differences between a Bookie and a Betting Exchange: –
1. Betting Exchange bets are all between different members of the exchange and the prices available are all determined by the members
BOOKIE – when you place a bet with a bookie you are always betting against the bookmaker. If you win your bet, then you are taking profit away from the bookmaker. If you lose, they get your money. Easy, simple – when you bet in your bookie account it’s always YOU vs THEM…
BETTING EXCHANGE – when you place a back bet on a betting exchange you are betting against another member of the exchange. You will be matched against whoever is offering the best price at the time your bet is matched. You won’t know who they are, and they won’t know who you are. If your bet wins, the amount you win will be taken from their account and credited to your account. Less the commission deducted by the owner of the betting exchange, typically 2% of your winnings. If your bet loses then the other member will receive your stake less the commission deducted by the exchange.
2. Betting Exchanges allow you to act as a bookmaker and make an offer to bet at a better price than is currently available
BOOKIE – when you place a bet with a bookie you are deciding to take their current back bet price. It’s a take it or leave it offer – you can’t try to propose a higher price. You can always check the bookie’s website later to see if the price has moved. More likely you might use an odds comparison site to see whether there are better prices available with other bookmakers. But you will still only have a limited choice of prices. Bookmakers operate to a higher margin (known as the Overround) to secure their profit. You will usually find better prices available on a betting exchange.
BETTING EXCHANGE – on a betting exchange you can easily see the current best available Back and Lay prices. You can also see the ‘queue’ of prices.
The example below is a horse race at Kempton. Let’s have a look at the prices for one of the outsiders, Control. The current Best Back Price is 150 (with £58 available) and Best Lay Price is 260 (£10 available to lay).
I want to place a Back bet and can see there’s quite a spread between the 2 best prices. I could just take the price of 150 but want to see if I can get a better price. I’ll place a Back Bet at 200 but what if it’s not matched before the race starts?
Options-
- let it lapse if not matched i.e. I want to bet at odds of at least 200
- keep the bet in-play and see if it gets matched at 200 in-running. The likelihood is my bet will only be matched if Control is running poorly
- set the bet to take the Betfair Starting Price if unmatched at the start
The point here is that placing a bet on an Exchange gives you much more flexibility than with a Bookie. I haven’t covered Lay Bets but similar principles apply regarding the options available to you.
3. The amount you can stake is fully visible on Betting Exchanges
BOOKIE – you log on to place a bet with a bookie and enter the amount you want to stake. If your account hasn’t been subject to any restrictions, the chances are your bet will be accepted. However, the stake might be limited by the bookie for a variety of reasons: –
- you’re betting on a non-mainstream market
- your bet stake is much higher than usual
- you are betting on the early odds as the bookie has only just made the market available on their site.
How about when you go to place a bet on an account that has already been limited? Depending on the bookie, you might see a message showing your maximum stake. Alternatively, you might have to wait while your bet is referred for review.
The point is that you can’t be certain of the stake allowed by the bookie until you place your bet.
BETTING EXCHANGE – you have complete visibility over how much is available to back or lay on a betting exchange. The liquidity available will vary depending on which event or market you are betting in.
Here’s the market for an International football match between Romania and North Macedonia. Not exactly a big game in the scheme of things. You can see though that there is £1023 available to bet at 2.0 (Evens) on Romania. If you wanted to lay Romania, there is only £19 available now with a further £300 to lay at 2.04 and £799 at 2.06.
The exchange prices and amounts change continuously. Unless you are trading in £ ‘000s you should be able to get bets matched at competitive prices. The exception will be in less mainstream events or markets where liquidity may be limited.
4. Betting Exchanges Won’t Close Winning Accounts
It is very unusual for a Betting Exchange to close the account of a successful sports trader. The exchanges make their money from the commission they charge their users. A winning trader shouldn’t need to worry about their account being closed.
Do I Have To Sit In Front Of A Screen All Day?
Doesn’t Sports Trading mean I need to monitor loads of different markets? Do I have to watch for price changes on my PC screen all day?
That was what I thought when I first started getting into trading. I soon found out that is definitely not the case.
For most traders, it doesn’t involve sitting and watching prices move for hours and hours. The best traders organise their time, they plan and decide which matches or races they might trade. They also know what the triggers are for them to carry out their trade(s).
Successful sports trading is about Quality not Quantity. Learn to only enter a trade when the triggers align. You must have the best probability that their trade will be successful.
Bets might be ‘set and forget’, depending on your strategy. You may simply need to set up your bets before the match/race starts. Then, bets can be left without needing to be at your PC or on your mobile while the action happens.
Ideal if like most people you have a job which stops you getting much time during the day. This Set and Forget approach works particularly well if you use Trading Software such as Fairbot.
Sports Trading Software
Trading Software can enable you to create automated routines based on your trading strategy For example, a simple Tennis Trade might be to lay a player at an in-play price lower than their pre match price. So they will have started the match well. You then place a back bet at higher odds that is triggered only if your lay bet is matched in-play.
Trading software enables you to automate a wide range of trading strategies. It can place bets based on all sort of criteria such as current scores, in-running odds etc.
Remove Impulse
There’s one aspect I particularly like about automated trading using Trading Software. It takes away the temptation to get involved in a trade when not ALL the triggers have been met.
When manually trading, it can be tempting to decide to get involved in a trade. Your ‘gut feeling’ tells you to even though you know it doesn’t qualify based on your criteria.
Say you have a strategy based on football matches where the stats suggest there will be plenty of goals. You are trading the Over 2.5 Goals market. You find on a particular day there are 20 matches which qualify as potential trades.
There’s a wide range of events available on Betfair covering football leagues across the globe. The chances are the matches will be played throughout most of the day. As a trader you need the discipline to set yourself a trading window, say between 7 and 9pm. You then filter your 20 qualifying games into those which you have time to trade.
Don’t forget though that depending on each trading strategy you may be able to automate your trading using Trading Software.
Fear Of Missing Out (FOMO)
Trading doesn’t have to be complicated. However, you do need to be able to focus on it and trade when you’re not distracted. There will always be plenty of trading opportunities so make sure you’re trading at times that work for you.
FOMO is something that traders certainly need to manage. Taking up Trading MUST be on YOUR TERMS. YOU need to decide when you are going to trade. Don’t find yourself drawn into a dangerous desire to search for all possible trades.
Trading must fit within your home & work routine. It must be something that you can do without feeling you’re compromising other aspects of your life.
“Trade to Live” not “Live to Trade”.
Trade too many games or races and you will inevitably start making mistakes. Don’t get into trades that you know don’t really fit your selection criteria / triggers. When you do, the result is that you will lose money on them.
Let’s have a look at 2 ways to trade….
Trader 1
They spend 10 minutes in the evening / morning running through a shortlist of potential football trades. They settle on selecting 3 for the day.
Trader 1 has 2 well established trading strategies. While the shortlist had 12 potential trades their schedule means they can trade between 7.30pm and 9.30pm. Their 3 potential trades are all in that window.
They then log on / get their phone out at 7.30pm and trade 2 of them. The other one didn’t qualify due to a very early goal. Overall, they make a total of 1.5 points (a Point will equate to your Maximum Potential Liability for each trade)
A Good Day’s Work
Trader 2
They currently have 5 different sports trading strategies they are using. Strategy ‘A’ seems to have been doing well but the other 4 are a bit hit or miss. They’re not really sure how profitable each one is because they can’t find the time to properly track them.
In the evening they look through their shortlist and there are 60 potential trades. The day is going to be pretty clear although their partner did ask them to take some rubbish to the dump in the morning. The kids will also need picking up from school.
Some of the 60 trades on the shortlist are in the middle of the night (US Major League football matches) so they’ll skip them. However, Trader 2 reckon they can still track most of the remaining trades and will just see how things go.
They don’t really have a set plan but will keep an eye on scores, race times etc during the day. By the end of the day, they’ve traded across 35 events and made a profit of £12.5. They like to check profit as cash not points. Profit was made and it’s a semi-successful day.
A Profitable Day But…
What they probably don’t know is that they made £40 from 4 trades using Strategy A. That could have been more. They decided to open a trade using their phone while waiting for the kids to get in the car! By the time they were home the trade had lost. It could have made a profit around the time the car was stuck at that last set of lights….
£12.5 return for a day’s worth of stress and effort. Combine that with worrying about missing a potential trade is not great. Particularly when there was £40 available from just 4 trades.
A Hard Day’s Work
Hopefully you understand why you need to ensure trading is done on your terms. You must you have time to devote to it. Be able to make informed decisions and stick to your disciplined approach. If Trader 2 seems the more attractive approach, then I suggest you stop reading here and go and do something else 🙂
How Do I Find A Profitable Strategy?
The principle of Sports Trading is straightforward – lay at lower odds than your back bet odds.
The skill, trick, key, magic is to work out when you can make that happen. Profitable trading requires discipline (as does Matched Betting). However, discipline on its own won’t help you create a profitable trading strategy.
There are several Sports Trading Services which can help you with your trading. Sites like Betfair Trading Community and Goal Profits are well established. They provide details of different trading strategies across sports like football, tennis, and horse racing. However, you don’t need to sign up to a service to get plenty of trading advice and example strategies.
The internet is awash with free content though the quality will vary. You have to ask yourself why would anyone give away a truly profitable strategy?
Some Basic Ideas
Do you have an interest in a particular sport and feel that could give you an edge over others? If so, trying thinking about angles where you might spot trading opportunities. Examples might be: –
Your own knowledge
- do you follow certain football leagues/teams and track team news when it’s announced? If a team’s key striker is left out of the team will their odds drift pre match allowing a Lay to Back trade?
- maybe your team seem to start games very slowly and are rarely ahead at half-time. However, they do have a history of strong second halves. So, you wait until they are 1-0 down at half time to a supposedly poorer team. You then Back your team in the expectation that they’ll get a goal back. If they do, you might decide to trade out or at least remove any liability. That leaves you with a free bet on them winning.
Use Stats
- similarly, a couple of teams are playing each other where the stats show that their average number of goals in the first half is low. Second half goals are higher than average. One option might be to lay the total number of goals pre match (Over 2.5 Goals). Then, then trade out part way through the first half when (hopefully) no goals have been scored. You can take some profit backing at a higher price.
- Alternatively, you know the teams aren’t expected to start banging in the goals until later in the game. You might decide to wait and see how the match unfolds before potentially getting into a trade. There are various ways of tracking how much each team has been attacking (see In-Play statistics). You’ll be looking at how many shots there have been on and off each goal, the number of corners and dangerous attacks. If it seems a goal is coming then you could Back one of the Overs markets (Over 1.5, Over 2.5 goals etc). Then trade out by placing a Lay bet at a lower price if there’s a goal before the match finishes
Pay Attention!
- do you like to watch horse races and try to read who might win? Can you spot horses which seem out of the running but like to come from the back of the field towards the end of the race? These types of runners might be ripe for backing in-running. Back them when their price drifts as they are out the back of the field. Place a lay bet at a lower price ready for when they get involved and move towards the front. In-play horse racing betting is ruthless and not for the faint hearted. However, profits can still be made!
- An opposite strategy is finding horses typically put near the front in the early stages of the race. Their price will likely shorten in-running. Trade these by backing them just before the race starts. The trade is to place a lay bet at a lower price for in-running or simply laying them in-running
The great thing about trading is that you aren’t looking for a winner or loser. You are looking for price movements.
Tennis Trading
In tennis, each player’s service might be broken several times in the First Set. You might be able to make plenty of profit from several trades without even bothering to check who won the First Set let alone the Match.
How would you know to trade that match I hear you ask? There are sites where you can access and compare statistics about each tennis player. You can check whether they both have low Service Hold percentages compared to the average. This is particularly useful for the Women’s ATP Tour . Service games are broken more often in women’s matches than on the Men’s tour.
Tennis trading demonstrates how there are so many angles to trading – knowledge is key. Sometimes trading opportunities can be found from identifying players who appear to be weak or strong mentally. Do they often win tie breaks? Are they known to be determined fighters who often come back to win the second set after losing the first? Is a player more likely to give up once a set behind?
Food For Thought?
Hopefully this gives you a very basic flavour for types of trading. Has it set you thinking whether there are trading angles to be had from sports you are interested in? Remember trading doesn’t have to just be on sports. Exchange trading doesn’t have to just be on sports. Large sums are traded on politics and entertainment shows like Strictly Come Dancing.
You can find more details in the Trading Menu. This covers Trading Software and Trading Services which provide you with a selection of different trading strategies. Some Trading Services have bespoke software to help you identify the best matches and events to trade using their strategies. All you need to do is Trade and you might even be able to automate that using Trading Software. Services like Goal Profits also provide live notifications to your mobile with potential trades to place.
