cosmicsports
Colt
Arb is a method to make small but sure wins.
The betting companies don't like it and if they detect you they will impose limits or close your account.
I 'm going to give you a simple example of an arb bet.
It is an event with two possible outcomes for the sake of simplicity and the prices are as follows:
book A 1.40 - 2.90 (bookmaker's margin = 5.6%)
book B 1.60 - 2.30 (bookmaker's margin = 5.6%)
If you bet with "A" and divide your money among the two possibilities you lose 5.6% and the same happens if you bet with "B".
But if you take the 2.90 from "A" and the 1.60 from "B" and do the dutching, you make a profit of 3.1%.
That's an arb.
But what is happening here ?
Why the two bookies offer different prices even though they operate with the same margin ?
It's because they have evaluated things differently and some times we know why, other times we don't know.
Yet one of the two is wrong.
Either the 1.60 is too generous or the 2.90.
Which of the two ?
Logically the correct bookie is the one who worked his prices closer to the event.
If A is right, then the probability of the 1.40 is 67.4% ( = (1/1.40) / (1/1.40 + 1/2.90) ).
But we can have this for 1.60 and therefore our expectation is = 0.674 x 1.60 = 7.84%.
If B is right, then the probability of the 2.30 is 41.0% ( = (1/2.30) / (1/1.60 + 1/2.30) ).
But we can have this for 2.90 and therefore our expectation is = 0.410 x 1.60 = 18.90%.
The differences with arb are as you can see big, much better results in the long run.
Provided the good price remains available.
The two clues are first the arb must exist and that the correct probabilities are those of the bet that was announced closer to the event. It's difficult
for this not to be true because the second bookie reacted to something.
Our problem then becomes the following:
a) finding the arbs of the day
b) knowing which bet was announced closer to the event (from the two/three bookies involved)
If one does that it's a certain win in the long run, just like the arb and better.
Will you be saved from limits-account closure ?
Maybe because you won't be a classical arber.
But because your capital will be growing maybe you will not escape - because that's what bookies are doing to people !
The betting companies don't like it and if they detect you they will impose limits or close your account.
I 'm going to give you a simple example of an arb bet.
It is an event with two possible outcomes for the sake of simplicity and the prices are as follows:
book A 1.40 - 2.90 (bookmaker's margin = 5.6%)
book B 1.60 - 2.30 (bookmaker's margin = 5.6%)
If you bet with "A" and divide your money among the two possibilities you lose 5.6% and the same happens if you bet with "B".
But if you take the 2.90 from "A" and the 1.60 from "B" and do the dutching, you make a profit of 3.1%.
That's an arb.
But what is happening here ?
Why the two bookies offer different prices even though they operate with the same margin ?
It's because they have evaluated things differently and some times we know why, other times we don't know.
Yet one of the two is wrong.
Either the 1.60 is too generous or the 2.90.
Which of the two ?
Logically the correct bookie is the one who worked his prices closer to the event.
If A is right, then the probability of the 1.40 is 67.4% ( = (1/1.40) / (1/1.40 + 1/2.90) ).
But we can have this for 1.60 and therefore our expectation is = 0.674 x 1.60 = 7.84%.
If B is right, then the probability of the 2.30 is 41.0% ( = (1/2.30) / (1/1.60 + 1/2.30) ).
But we can have this for 2.90 and therefore our expectation is = 0.410 x 1.60 = 18.90%.
The differences with arb are as you can see big, much better results in the long run.
Provided the good price remains available.
The two clues are first the arb must exist and that the correct probabilities are those of the bet that was announced closer to the event. It's difficult
for this not to be true because the second bookie reacted to something.
Our problem then becomes the following:
a) finding the arbs of the day
b) knowing which bet was announced closer to the event (from the two/three bookies involved)
If one does that it's a certain win in the long run, just like the arb and better.
Will you be saved from limits-account closure ?
Maybe because you won't be a classical arber.
But because your capital will be growing maybe you will not escape - because that's what bookies are doing to people !
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