[AgainstAllOdds]

BookA

Tampa Bay +1.5 -200
Boston -1.5 +140

Book B

Tampa Bay -1.5 +150
Boston +1.5 -193

[Wheell]

No, although complicated arbs are possible this merely allows you to bet on or against a 1 run game. Let me give you an example of a complex arb:

-2.5 +120
-1.5 +101
+2 -110

If you bet 100 on -2.5 and -1.5, and bet to win 200 on +2 you create a situation where if the favorite wins by more than 2 you profit, if the win by more than 1 they profit, and if they by 1 or lose you break even. You could bet a tiny bit more on the underdog to ensure a small profit in all 3 scenarios.

[AgainstAllOdds]

Thanks Wheell....Ive been doing mainly the basics of arbing...know anywhere that I can read up more about complex or advanced arbing?

[Wheell]

PAGING GANCHROW, AAO on line 2 with questions on complex and advanced arbing, PAGING GANCHROW on line 2.

[Ganchrow]

PAGING GANCHROW, AAO on line 2 with questions on complex and advanced arbing, PAGING GANCHROW on line 2.

Considering the gratitude and respect AAO showed me shortly after I helped him with his math homework, I'd jump at the opportunity to answer any intelligent question he might have to pose.

[Wheell]

Ah, missed that thread. In hindsight, after reading it, I am glad I did.

[AgainstAllOdds]

Ganch, I thought there was no hard feeling between you and I? I was under the assumption it was "water under the bridge" but I guess not. I'm just intrested in Arbing and hoping to learn a little more about it. Any help is much appreiated.

[Blondie]

AAO, there are several books you can read to better understand arbing. Check out Borders or Noble or Borders.

[AgainstAllOdds]

AAO, there are several books you can read to better understand arbing. Check out Borders or Noble or Borders.

Yes, I know this...But there are probably 100 books on this subject and maybe only 5 of them contain useful information. Just hoping one of these fellas can point me in the right direction.

[Blondie]

Well what is your exact question?
Are you looking for those five titles?

[AgainstAllOdds]

I am looking for information on the internet or a book that has useful information about Advanced Arbing.

I still dont understand why Ganch would not want to help me considering like a week ago he sent me a PM and everything seemed to be cool after that.

[ManOfValue]

Whats the definition of arb ??

[Wheell]

and arb is a series of bets that profits the player without putting his funds at risk.

Brazil -5 +104 at Pinnacle
Peru +.5 +100 at CRIS

Bet both, win money.

[ManOfValue]

oh , ok . Its a SCALP right ? or are they different ?

[Munson15]

oh , ok . Its a SCALP right ? or are they different ?

I've often wondered that myself.

[Ganchrow]

oh , ok . Its a SCALP right ? or are they different ?

Well technically speaking, yes, a scalp and an arb are synonymous.

A scalp (also sometimes referred to as a "riskless" arb -- but that's actually redundant) refers to the practice of buying an asset and simultaneously selling it at a higher price, locking in a profit with zero risk to one's funds (although sportsbook default risk, much to the chagrin of some would-be arbitrageurs tends to be overlooked).

For example, if you can "buy" the Yankees to win a given game at a price of -120 at Book A and "sell" the Yankees (i.e., by betting on the opponent) at a price of +125 at book B then you have an arb worth 1.0204%.

In practice, however, it's not always possible to find a true (that is to say a "riskless") arb. For example, during Super Bowl time a book might offer as a promotion a bet on the coin flip at slightly better than even odds. If you're able to pick up a bet on heads at +103, but are able to bet on tails at no better than -105, then you don't actually have an arbable opportunity. This is because the +EV side (the heads at an EV +1.5%) offers lower value than the -EV side costs (the tails at a -EV of -2.38%).

What you do have, however, is what's referred to in finance as a "statistical arbitrage" (or briefly, "stat arb"). It's only "statistical" because even though you expect a profit of 1.5% on your wager, you still do run the (the hardly inconsequential) risk of a loss. This means while statistically speaking (which is to say over an infinite numbers of trials) you're guaranteed a profit, you might very well lose in the short term.

This is why with a true arb a bettor (other exogenous real world factors notwithstanding) should be willing to risk (although there's no "risk" actually involved) every he dollar he has on the opportunity, but why on a statistical arb a bettor should do no such thing.

When it comes right down to it every bet for an advantage bettor is really a statistical arbitrage in that he should expect (assuming his forecasts accurate) his probability of turning a profit provided he doesn't overbet to approach certainty as the number of such bets placed increases.

Nevertheless, the phrase "statistical arbitrage" is generally limited to describing those bets where the bettor has a quantifiable edge that has been demonstrated through statistical analysis.

Another kind of near arbitrage that exists to a very limited extent in sports betting futures is "cost-of-carry" arbitrage. Such opportunities may occasionally be found on betting exchanges. These arbs take advantages in differing opportunity costs associated with wagered funds.

For example, a player might have bet an MLB team to win a given number of games at short odds earlier in the season. If the team goes on a long winning streak, the posted season win total might become a certainty (provided we assume the requisite numbers of games are eventually played for the bet to have action).

However, if that bettor is looking to free up capital (say for NFL betting), he might be willing to sell out of his bet at very long (but less than infinite) odds. A player with a sufficient amount of capital might be willing to take such an opportunity for a guaranteed profit of say (1%) over a 1-month time horizon.

Another near-arbitrage is what's known as a "risk arbitrage" (which is a subset of "merger arbitrage" in finance, although the two are frequently use synonymously). This refers to a statistical arbitrage where the bettor takes advantage of the differing risk characteristics between himself and his counterparty.

For example, a bettor might have gauged an underdog vastly overvalued at +1000, forecasting it should really only have been +200. Being a quarter-Kelly bettor he lays 4.31% of his bankroll on the underdog, and with 2 minutes left in the game and his team winning by a wide margin he accurately judges his bet's win probability at 98%, implying a fair line of ±4900. This means he'd have a 98% probability of increasing his bankroll by 43.1% and a 2% probability of decreasing his bankroll by 4.31%.

It's at this point that he notices that an exchange is offering live betting on the event. An advantage bettor (the "risk arbitrageur", who apparently missed the pre-game bet) also applies the same 98% win probability for the (initial) underdog with 2 minutes left in the game. As he's an advantage bettor, he offers the bet at +4000 (meaning he'd be willing to bet the favorite at -4000 for an edge of 0.45%).

Now this bet offers an EV of -18% for the initial bettor. He fully understands this, but being a quarter-Kelly bettor he'd nevertheless be willing to bet up to 0.985% of his initial bankroll on what he knows to be a long term loser in order to maximize his expected utility.

Technically, risk arb is still a subset of stat arb in that a win isn't guaranteed. What the risk arbitrageur is doing is essentially charging a premium to the other bettors in order to take on some of their risk. This is the whole concept underlying all types of hedging (including insurance). The risk arbitrageur is simply is charging a bettor a fee in order that the bettor may reduce his risk.

What's interesting about both cost-of-carry arb and risk arb is that that buyer and seller don't need to disagree on the fair value of the event for the bet to take place and still be in the best interest of both parties. This is due to differing preferences between the two parties, and may create a win-win situation for even two rational advantage bettors. It's a win for the arbitrageur in terms of entering into a +EV bet, and win for his counterparty in terms of either freeing up capital for other purposes or reducing undesired risk.

[ManOfValue]

Thanks for the explanation , now its clear...