In this article, we discuss what Sports Trading is and what are the pros and cons vs regular sports betting.
WHAT IS SPORTS TRADING?
Sports Trading is a relatively new concept within the world of sports betting.
In the old days before Sports Trading, the only way to bet was to bet on an event ending one way or the other – say, for instance, you would bet on a football (soccer) match between Liverpool and Arsenal and you could choose to either back Liverpool or Arsenal to win (or to back the Draw, i.e. neither team wins). Once you had placed your bet, you would wait until the match was over and you would either be the happy winner of the bet or the not-so-happy loser of your whole stake.
Then, in the year 2000, a new player arrived on the sports betting market. It was called Betfair and it changed the game of sports betting. Now, instead of backing a result to happen, you could back a result NOT to happen (called a “lay bet”). But even more “revolutionary” was the way, Betfair was set up: It was not an ordinary bookmaker. Instead of betting against “the house” (i.e., the bookmaker) the bettor actually would bet against other bettors.
So, in keeping with the example of the match between Liverpool and Arsenal, if you believed that Liverpool would not win this match, you would Lay them and if the odds you offered were accepted by another bettor, who believed Liverpool would win the match, you now had made a bet with the other bettor. As it was you who provided the odds for the bettor to back, in reality, you acted as a “bookmaker” in this instance.
LIVE SPORTS TRADING
As live betting/trading was introduced, i.e. the possibility to bet/trade after the event has started and all the way until the end, you had even better opportunities to trade your bets. At any time before or during the event you have the option to place new bets – for instance, in order to “close your position” with a profit or a loss, depending on the situation.
Since the markets are live, the odds will change according to the events taking place – e.g., if Liverpool scores in the match we use as an example, the odds on Liverpool to win the match will naturally decrease, as it is now more likely they will actually win the match. If you Laid them at odds 1.80, the odds can now drop to 1.25 (just as an example). Obviously, a goal for Liverpool is bad news if you Laid them but you now have the option to stay within the match and let it play out in the hope that Arsenal will equalize, or you can choose to cut your losses and back them to win at odds 1.25 (these odds will be provided by other bettors – it may even be the same who “bought” your Lay odds at first, but we can’t know that). This will mean a loss of course, but you will lose less than if you just let the bet run. On the other hand, if Arsenal score first, the odds on Liverpool to win will increase (to, say, 2.95) and you can now choose to “cash-out” (i.e., close your position) in order to lock in a secured profit or you can choose to let it run to get the full profit – but that is a gamble as you run the risk that Liverpool strikes back. And as a trader, you do not want to gamble so the advice would be to cash out.
SPORTS TRADING STRATEGIES
The emergence of Betfair meant that a plethora of new strategies for the betting (or rather trading) market emerged. We shall not dig deep into that here but we will cover this in more detail in another article.
Just as an “appetizer”, some of the following trading strategies emerged and are to this day still potentially very profitable, when applied correctly:
- Lay the Draw (football/soccer) – read more about this strategy here
- Scalping the Unders (football/soccer)
- Pre-race scalping (horse racing)
- Dobbing (horse racing)
SPORTS TRADING vs SPORTS BETTING
The major difference between Sports Trading and Sports Betting can in a simplistic way be said to be that Sports Betting is a “set & forget” approach while Sports Trading requires that you take action on certain events in the match/race/whatever you’re trading.
When trading, you can’t just place a bet and then leave the event to after it is over and check if you won or lost.
When you place a bet as a sports bettor, you risk the full stake but will also, of course, win the full amount should your bet win.
As a Sports Trader, you should never lose the full stake as you will trade out at a given “stop-loss” point you’ve set before you entered the trade. For instance, in the match above, if you had Laid Liverpool to win, you would automatically trade out in case Liverpool scored first. If the odds dropped to 1.25, you would then save 25% of your loss compared to the bettor (unless, of course, Arsenal equalizes).
Depending on how you select your sports event to bet on, Sports Betting, in general, should have a lower strike rate than Sports Trading. Of course, if you prefer to bet on football teams or horses who have odds at 1.15 or lower, you will expect to have an extremely high strike rate, but very few will do this, as a single loser (and they WILL happen) wipes out a lot of profits and will take a long time to recover considering the odds you bet at.
Sports Trading is relevant for those who
- Can react to events in the match/race
- Accept a slow steady profit growth rather than the one-off major win from a 7-fold football bet that miraculously wins
- Don’t like long losing runs
- Treat it as an investment rather than a hobby
This is not to say that sports betting can’t be profitable either. It can and there are people making serious money doing that based on various sports betting systems – but for most people, regular sports betting is a bit of fun. Something to make a perhaps less exciting match a bit more interesting. Having said that, we will be covering Sports Betting systems here as well, since like we said, there ARE serious Sports Betting systems that can be very profitable.
It’s in the nature of sports trading that you will be taking it seriously. In fact, that is the main reason why you’d do it instead of pure betting. Otherwise, you’d just be wasting your time and money and you really should be doing something else in that case.
SO TO WRAP IT UP – WHICH IS BETTER: SPORTS TRADING OR SPORTS BETTING?
The obvious answer is: It depends on what you want and what type of person you are.
If you generally want to see a high potential profit per bet you place, Sports Betting is most likely your thing.
If you don’t have the time, or won’t dedicate the time, to watch the event you’re betting on, Sports Betting again is for you.
If, on the other hand, you want to treat sports betting as an investment, Sports Trading should be your path forward. Sports Trading is more likely to generate a profit long term than pure Sports Betting (for most, but not for all, obviously) and if you are willing to spend the time needed and accept that you will not get rich overnight (there is no such thing anyway), then Sports Trading should be as relevant and interesting to you as any other investment you make. Just make sure to treat it as serious.