The basics of Sports Trading

The basics of Sports Trading

Trading on sport uses the same concepts as trading on the stock exchange or in real estate.  Buy low and sell high = making profit.  In sports trading, instead of the terms “buy” and “sell” we refer to the terms “back” and “lay”.

To “back” a team means that you are betting on them to win.  It’s the most traditional bet format used at most sports betting agencies around the world.  If you “lay” a team, then it’s the opposite as you are betting on them to lose.  Betfair is the most popular sports betting exchange that allows punters to both back and lay.

So in order to make money, without taking a risk on the actual result, all you need to do is back high and lay low.  It doesn’t matter whether you back or lay first, and it doesn’t matter whether the market is rising or falling.  Much like the stock markets, as long as the price is moving, there’s opportunity to make money.

Let’s take a look at an example:

You back the horse "Puffing Billy" to win in Race 4 at Flemington.  You put a $100 back bet on ten minutes before the start of the race at odds of 6.00.  Your position is:

Puffing Billy wins – You win $500
Puffing Billy loses – You lose $100

Suddenly there’s a late surge of money for your horse and its odds shorten to 4.00.  You can now lay this horse and reduce, or even remove, your liability.  You decide to lay the horse for the full $100.  Your position is now:

Puffing Billy wins – You win $200 (+$500 from the back bet, -$300 from the lay bet)
Puffing Billy loses – You break even  (-$100 from the back bet, +$100 from the lay bet)

When you lay the $100 at 4.00, your liability is $300, and combined with the $500 you made from the back bet, your overall position is +$200 if the horse wins.  So you’re in a strong position and effectively “freerolling” Puffing Billy to win.  But what if it doesn’t win?  You don’t lose anything, but you don’t win anything either.  Wouldn’t it be nice to lock in a profit regardless of the result?

With this position, you can achieve what is referred to as a “green book” (or hedging) and that is when you guarantee a win regardless of which horse wins.  To do this, we could’ve laid for $150 instead of $100.  Here’s how that changes the numbers:

Puffing Billy wins – You win $50 (+$500 from the back bet, -$450 from the lay bet)
Puffing Billy loses – You win $50 (-$100 from the back bet, +$150 from the lay bet)

Now we win $50 regardless of the result!  That’s the ideal position to be in, and should be a goal of any trader to achieve a green book.  Remember that this can be achieved on any sport – horse racing, cricket, football, golf, tennis...it doesn’t matter.  It’s the same technique.  You can also do this both pre-game or in-play.

In order to work out how much to lay to lock in a profit you can use software or a calculator such as http://www.oddschecker.com/betting-tools/hedging-calculator.html.

There are many trading strategies that can be employed in order to achieve a green book and we’ll discuss these in more detail in future articles.

TIPS

2020-21 NBA Betting Tips: Tuesday 13th April

We’re absolutely rolling with our NBA betting tips at the moment and are confident we have some more winning plays for you on Tuesday. Catch our best spread and player prop tips for FREE right here! read more

2021 AFL Round 5: Tips, Predictions & Betting Odds

Round 5 of the 2021 AFL season kicks off on Thursday night with the Saints hosting the Tigers in what is a highly anticipated 'Maddie's Match'. As usual, we have you covered with a preview and betting tips for every game in Round 5 of the AFL season here! read more

Esports Betting Tips: Monday, April 12th

Michael Lee is back to kick off the week in esports with a massive article featuring not three but four best bets this Monday, the 12th of April! In this edition, he focuses in on the ESL Meisterschaft: Spring 2021 and the ESEA Season 36: Premier Division - Australia for his best bets. read more

2020-21 NBA Betting Tips: Sunday 11th April

The exciting NBA season continues on Sunday with another juicy seven-game slate. Catch our best spread and player prop bets for the value games right here! read more

ARTICLES

Best Australian Sports Betting Sites

The best Australian sports betting sites ensure safe and successful online betting for punters. Here's our list of the best sports betting options in Australia. read more


Performance Ratings & Pricing with Julian Vallance with Sportsbet

Julian Vallance from Sportsbet takes us through some of the key factors which he uses with pricing upcoming horse races such as performance ratings. Check out his video from Sportsbet here. read more


What is Over-Round and How do Sportsbooks Make Money?

Over-Round is an important concept for both punters and sportsbooks. It's how Australian sportsbooks make money! All punters should understand over-round, how to spot it, and how to find better value on the Betfair Exchange. read more


Betfair Commissions and Charges

Ever wondered why you can get such great odds at Betfair in comparison to other online bookmakers? We break down why that is the case and why Betfair isn't just for professional punters here read more


BLOGS

2021 AFL Brownlow Medal Votes Round 3

The extended weekend of football over the Easter weekend brought some entertaining matches and some surprise results with Sydney and Melbourne both undefeated after three rounds of action. Check out who the star performers were with our Round 3 Brownlow vote predictions. read more


2021 AFL Brownlow Medal Votes Round 2

Round 2 of the 2021 AFL season produced a couple of thrilling finishes and the cream is rising to the top early on the Brownlow Medal leaderboard. Check out our analysis and Brownlow vote predictions for Round 2 of the season here. read more


2021 AFL Brownlow Medal Votes Round 1

The first round of the 2021 AFL season is in the books with some stellar performances to start the season which will be sure to attract the eye of the umpires. Who will get the Round 1 Brownlow votes? Every week we'll have analysis and Brownlow vote predictions for every match of the 2021 season. read more


2021 Brownlow Medal Leaderboard

Once again the BYB team are bringing you comprehensive coverage of the 2021 Brownlow Medal, with round-by-round analysis and Brownlow vote predictions for every match, as well as our 2021 Brownlow Medal Leaderboard tracker. Click here for access to our Brownlow Medal content for free! read more


BetDeluxe

PlayUp