What Does It Mean to “Trade” Sports?

Millions of people have now placed sports bets, but how many of you have traded in and out of sports outcomes with the ease of trading stocks? It may seem like something you pondered, but thanks to new technology and fewer gambling restrictions, it’s actually possible now.

So what does it mean to “trade” sports? And how can you get started?

The Concept of Trading Sports Outcomes

The ability to trade sports outcomes now exists because of a new app, Sporttrade, which allows users to dynamically trade in and out of positions on sports outcomes through a betting exchange.

The best way to think about this is to compare it to trading stocks on a stock exchange, like the Nasdaq. Just as you can buy individual shares of a company on the stock market and sell them when they rise in value, you can take a position on a sports outcome on a particular game and sell that position for a profit if  the probability of that outcome occurring increases. 

Conversely, you can sell your position to trim a loss if the probability of the outcome occurring decreases. You can even place limit orders to automatically buy or sell certain positions once they reach a predefined price.

For example, if the Mets are playing the Phillies and the Mets are favored by 2 runs, the probability of the Mets winning might be priced at $57 per contract where price = probability.  This means that you can buy one contract of the Mets to win at $57.  If they do win, the contract settles at 100 – netting you $100-$57 or a $43 dollar profit on that trade less a 2% commission.  If the Mets go onto to lose – your trade would settle at $0 or a $53 loss.

The key is that you don’t have to buy and hold!  You can trade in or out of your position at any time – just like a stock. 

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Why Trading Sports Bets Is Advantageous

Why is this concept so advantageous for sports bettors?

  •       Tighter pricing, better odds. Sports betting probabilities and pricing can sometimes be difficult to understand, but betting exchanges are built with lower fees which translate into better odds for the customer.  Additionally, because exchanges are a 2 way market where buyers meet sellers, the spreads between pricing is usually much tighter than those provided by one way markets like traditional sportsbooks where the book sets the price: take it or leave it.
  •       The ability to trade mid-game. One of the most appealing aspects of trading sports is the ability to trade mid-game. If you don’t like the momentum of the game, or if you get the feeling that your bet is going to result in a loss, you can sell your position and trim your losses. Conversely, if you feel the game is going in a good direction, you can take additional positions and potentially increase your chances of  of making a profitable trade.
  •       Immediate cash out (and cut loss) options. With a conventional sports bet, traditionally, you’ll only be able to collect a profit at the end of the game. But when trading is on the table, you’ll have the option to trade out at any time you want. If your position is up 15 minutes into the game, you have the option to sell and collect your profits immediately. Of course, this premise is also true for cutting your losses and selling; if your position is down 15 minutes into the game, you can sell before you lose anything more.
  •       Limit orders. Just like in the stock market, limit orders allow you to set and execute automatic transactions when positions reach certain thresholds of pricing. In the sports betting world, this means you can set your price in advance and execute a trade instantly, without manual intervention, if your predefined threshold is ever reached. In other words, you can place limit orders, then sit back and enjoy the game.
  •       New options for hedging. If you have mixed feelings about a particular matchup, you can literally hedge your bets. Before or during the game, you can secure new positions to maximize your winnings or minimize your losses.
  •       More interactive games. Most people love the idea of sports bet trading because it makes the game more interactive and more interesting. You can remain an actively engaged throughout the course of the entire game.

Keys to Success When Trading Sports Bets

If you plan on trading sports, keep the following in mind:

  •       Pay attention to the odds. Sports trading apps try to simplify american odds by converting them to probabilities  and projected outcomes, but it’s still on you to review that information. Pay close attention to the odds and only place bets you’re truly comfortable with.
  •       Set upper limits for yourself. Create a bankroll for yourself, so you have an upper limit to how much you can lose in sports betting. For example, you might allocate $500 to your bankroll; if and when you lose $500, you have to start betting. From there, it pays to ration out your bankroll; for example, you can commit to betting only in $25 intervals.
  •       Have fun. It’s tempting and reasonable to chase after profits, but remember that trading sports is also meant to be fun.

Trading sports is a relatively new concept, but it shows incredible promise. If you’re looking for ways to make your sports viewing experience more interactive and more memorable, or if you just want to spice up your sports betting, you should give it a try.

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Author: Ben Burd

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Sports Betting