<![CDATA[Sports Betting Arbitrage, Scalping, Sure Bets, and Trading all refer to the one thing, the idea of making a guaranteed profit from a difference in odds between sportsbooks. Normally, backing all outcomes of a single sporting event at a single bookmaker would result in you guaranteeing a loss of a few percent – this is the bookmaker’s margin. However, if we take the best competing odds from different bookmakers, it is possible to make it so that guaranteed loss turns into a guaranteed profit. By betting on those high odds so that your winnings are the same no matter what the outcome, you are arbing.
Technically, Sports Trading is defined as “the simultaneous buying and selling of assets in different markets or in derivative forms, taking advantage of the differing prices.” Which is another way of saying ‘Buy low, sell high’.
Similarly, Scalping is defined as “To engage in the reselling of something, such as tickets, at a price higher than the established value.” This practice is most commonly seen with sports and music concert tickets.
Both of these terms have been used to describe the idea described above – betting on all possible outcomes for a guaranteed profit – because they use the same principles: Take advantage of a difference in pricing for your own profit.
‘Surebet’ is another term frequently used to refer to an individual occurance of this situation. Similarly arbitrage is abbreviated to ‘arb’ and used the same way – thus a ‘Sports Arbitrage Trader’ will place arbs (surebets).
TRADING or GAMBLING?
Is trading gambling? – the distinction is very subjective with several shades of grey, and in my opinion, is more a stasis of connotation rather than any difference in the underlying activity.
- Nothing ventured nothing gained
If you were not a gambler and felt that gambling was not trading which one would you pick? If these are your only choices as a trader, then you’re not trading.
It all depends on your definition and perception of gambling. Based on this definition, can you think of anyone who has made money without taking some sort of a gamble? Will buying an investment property to flip it and sell it for a profit a gamble? Aren’t there adverse possibilities in the odds for or against that profit? How about starting a business? If you are not 100% guaranteed success and a positive outcome, then you must be gambling. Right?
The word gambling has the same taste in people’s mouths as the word greed. They are both facts of life except when pursued recklessly and in excess. As with everything, the truth can only found in somewhere in shades of gray, and while it may be argued that all transactions which involve derivative instruments are gambling by definition it is possible that you have found at least one way to trade that isn’t gambling as most people think of the term.
All trading action involves risks, and your trading model would have to factor all of them out of the equation to really be considered not gambling, and if it does effectively eliminate risk to the point where it is pretty much non-existent, well then for you trading is not gambling.
And I’d say that for over 90% of the trading community (including those that use all aforementioned derivatives, options, and the purchase of stocks for the purpose of short-term capital growth), no matter how good their trading is, it is still gambling. However, I’d also say that any trader who readily accepts unknown outcomes, whether he calls it gambling or not, is far better off than the trader who is so stubbornly sure of his views or methods that he feels insulted by being called a “gambler”. Beyond that, it’s a matter of semantics.
Perhaps one of the real distinctions between gambling and trading is that a successful trader will be given more opportunities to trade, however a successful gambler will find that other participants in his market decline to gamble with him!
In next articles I will look at sports betting strategy to help you decide if you want to start sports trading. The things to think about are; what betting systems there are, what sports betting books should I read, which bookmakers should I use, what are the potential traps, which sports should I trade, some trading psychology, and what tipsters can help me start. Also I will discuss the best sources of information for sports betting systems.]]>