Method 1: Directional Bets
Compass - Directional or Value Bets Directional bets simply consist of betting on a result. Behind lies the basic mechanism of betting: we put money in favor of a certain team, if I win it, I multiply it by the odds, if not, I lose it. We play, then, simply against the probability of the result, something that the bookmakers handle perfectly.
Does it make economic sense to bet this way?
Yes, in a single situation: when the implicit probability of the odds offered by the bookmaker is less than the real probability of the result happening. In this case, the bet is said to have value.
With an example, let’s imagine a football match: Real Sociedad - Real Betis Balompié. Assume that the quota for the victory of the Royal Society is 2. This means that the probability that the bookmaker assigns to this result is 50%. Therefore, it only makes sense to bet if the real probability that the Real beat Betis is greater than 50%.
This is not a frequent situation, but rather the opposite. As we explained earlier, bookmakers have huge human and technical resources, so they handle statistics and probability better than anyone else. However, it does happen on occasions that the bookmaker is forced to move the odds out of what the statistics mark them, and that situation can be created precisely by the erroneous estimates of the mass of bettors. If a large part of the money is concentrated on certain results, it is very common for the bookmaker to modify the quotas of the complementary results to make them more attractive to other bettors and balance their risk, thus providing a long-term profit opportunity. .
Again with our example, if most of the betting money goes to Betis draws or wins, our bookmaker may choose to offer odds of 2.2 or 2.4 that assume implied odds of 45% and 42% respectively. With these fees and a 50% real probability, it makes perfect sense to bet on the Royal Society. The bet thus offers value to the bettor, in Anglo-Saxon terms, its expected value or expected value is positive. To evaluate them, we have developed this method of analyzing the value of sports betting.
With this mechanism, the individual bettor helps the bookmaker rebalance the market, and is in fact positioned against the other bettors.
Method 2: Betting Arbitration
In terms of investment, the word arbitration is used when a secure benefit can be obtained in situations where two or more markets are decompensated with each other. In betting, as a large market that is where event probabilities are bought and sold, it is possible - and very profitable - to apply this concept. Who would not be delighted to find a profit opportunity Betting arbitration or how to win safe bets on football and other sports insurance? To do this, we simply have to find a match where the opposite results give us quotas whose sum of probabilities is less than 100%. Or put another way, where the net spread is negative.
Just a moment. If we had the spread was the margin of the bookmaker … no house will offer quotas for a match where you lose insurance!
Indeed, no. The key is to compare the odds of various bookmakers. No bookmaker will give us his margin, but it may be possible that due to market dynamics, two bookmakers are forced to adjust their odds so that a bettor takes a position in a bookmaker, and the opposite in another , so that regardless of the result a benefit can be obtained.
With our football example: if a bookmaker offers odds 2 for the victory of the Real Sociedad, and another house offers odds 2.4 for the draw or defeat of the real, investing 100 euros in the first betting house and 83 in the second , we will obtain a SAFE gain of 17 euros, regardless of the result:
If Real Sociedad wins: we have invested 183 euros, the prize is 100 x 2 = 200 euros, we get a profit of 17 euros
If you tie or lose the Real Sociedad: invested: 183 euros, prize = 83 x 2.4 = 200 euros, profit 17 euros
Note that the odds of the fees handled are 50% and 42%, whose sum is 92%.
Again, this situation will occur in cases where two bookmakers have two opposite results decompensated. With this double operation we are helping them to balance their positions by standing against the majority of bettors.
Method 3: Sports Trading
The concept of sports trading also comes from the stock market. It consists, in the purest style of stock market speculation, in negotiating with the temporary evolution of the quotas of a party. As we have discussed Sports Trading before, the bookmakers dynamically move their odds as the bets are settled to ensure that they offset each other, and they get their profit from the spread.The most evident situation of this evolution of the odds is during the live matches. Let us again take as an example our clash between Real Sociedad and Betis. Imagine that the match starts with a zero draw, is very locked, and we think it is very likely to end like this. We place a bet on a draw, say with odds 3. After 20 minutes, if the score has not moved, the odds will have been reduced to 2.4, since the probability of the match ending in a tie will have increased. If now the match opens and we believe that either team can score, we can choose to close our position and win the odds difference, in two possible ways.
The betting simultaneously on the two complementary results (it should be ensured that the margin implied in these other installments allows it)
selling our tie position, or in stock terms, getting short to the draw
This second option is of course cleaner, but the only bookmaker with a real market that allows us to be the brokers that offer bets is Betfair, making it the ideal operator for trading exchange bets. We have done a complete analysis on the Betfair betting house, which you can check in the previous link.