Trading your bets
Trading out is the process of placing a bet against an outcome that you have already bet on. You may begin by ‘backing’ an outcome with the view to ‘Lay’ it, or vice-versa. Betting against your original bets can reduce risk, increase profit from bettings and in the right circumstances guarantee a winning outcome. You can read more about backing and laying here. Trading your bets is essentially about anticipating how betting odds movement may occur and using that to your advantage.
Pros & Cons
- Pro - Trading is becoming increasingly popular, so there are many useful tools that will assist you when trading your bets.
- Pro - Trading can be very enjoyable. Bettors are able to truly immerse themselves into sporting events and also develop a deeper understanding of the market.
- Con - To a beginner, trading can be confusing. It can be easy to misinterpret the aim of a successful trade and lose money.
- Con - Trading is time consuming, so it isn’t for everyone. It takes being able to set aside hours of time to watch and observe betting odds and live events.
The three main functions of trading your bets are to guarantee a profit from sports betting, to reduce your overall risk (exposure) and it can act as a way of cancelling out a bet that you had previously matched. The latter two options are also known as hedging your bets, but that’s something that is worthy of an explanation of its own. You can read all about hedging your bets in this article right here once you’re familiar with trading.
The first important thing to know about the act of trading your bets is placing that initial bet. You either back or you lay. Back means betting in favour of something, whilst lay means betting against it happening. It’s different from the traditional two/three way market of betting with bookmakers but acts in the same way. You can read about backing and laying at Betfair in this article here. It may be a good idea to cover that subject before reading on about trading.
Before we dive into trading your bets, there are some terms you’ll come across that may be foreign to you in the world of betting exchanges.
- Hedging: Hedging your bets is a way of protecting profit from bettings or reducing losses by backing both sides of the betting market. This can only be achieved in-play or as the betting odds begin to move.
- Green Up: To hedge your bets leading to a profit from betting on all selections.
- Red Up: To hedge your bets leading to a loss on all selections.
- Scratch: Scratching your bet means to erase it. You can do this by placing a bet against that outcome at the same odds as the original bet, or by cancelling your bet before it is matched.
- Tick: A tick is the difference between the two closest prices at Betfair. The size of the tick is dependant on the price. Smaller odds allows for ticks that are 0.01, 0.02 for example, whilst bigger odds the ticks may be 0.10 and even higher for best odds of 7.00 and above.
The terms on their own are scary and there’s a lot to take in when you’re trading, but actually, the explanation of them simplifies things. They’re just fancy words for describing actions that you’ll pick up whilst learning to trade. Understanding the terminology helps, but not knowing it isn’t going to halt your learning.
There are different types of trades…
There are different ways to make money when trading your bets. There is a method of trading your bets that can be likened to arbitrage betting, but it’s more risky in that you may have to become creative and hope for the right movements during a sporting event. Below are the three popular methods of trading your bets.
Scalping is a method of trading that relies on making lots and lots of little profits to build up your overall profit. It’s time consuming and takes knowledge of the betting markets and also patience.
The process of scalping involves extremely short-term backing and laying. You may back something at one price, and a movement of one tick (0.10) may be enough for you to happily trade out for a small profit. You have to be very pro-active and reactive, as this type of trading is perfect for fast-moving and sensitive betting markets.
For example a team may open at 2.20 and you back them, and a good spell of pressure in the opening minute or two can often be enough to spark a momentary drop in the odds. A drop to 2.15 or even 2.10 may be all you need to take a quick profit and move on to the next one.
You can employ the same approach with slower moving betting markets, but you’re going to limit yourself as you spend a lot of time sat around, waiting for things to happen.
Scalping doesn’t literally mean settling for pennies by the way, as you can also reduce bet volume and increase target profits. Quite how you employ the method of scalping is up to you.
Cross Market Trading
Cross Market Trading involves getting creative. It is like arbitrage betting in that you can create scenarios where a profit is guaranteed. Cross market means using more than one market, for example a correct score market and a total goals market.
It’s a more complicated method of betting but it holds an advantage. If you back and lay on the same betting market, then you’ll pay a commission on both bets despite only being able to win one. If there is a way to create the same situation using cross markets, then you will only pay commission on the winning selections which reduces your overall commission and can protect or increase profits.
Because the exchange won’t calculate such potential profit or liability for you (because you have used more than one single market) you’ll need to do this yourself, which makes for some complicated calculations and more room for error. This method of trading is not really for beginners.
Again, swing trading is a more risky method than just scalping. Swing trading involves making a judgement on a game and how and when the odds may move throughout the course of that game or the markets life. You’ll place one bet with the expectation that the best odds are going to move a certain direction. If they don’t, you can make a loss. If they do start moving the way you hoped, then you can move in for a profit.
Trading is for anyone, but it can be complicated at first. Even once you understand the nature and aims of trading, it’s still a challenge that may be beyond a number of casual bettors. It takes a deeper understanding of odds, their movement and team performance to be a really successful trader. So it may be that trading is more likely to be a practice utilised by a professional bettor. Some sports don’t lend themselves to trading, but football and other team sports are particularly popular, whilst if you’re watching live Horse Racing there is also money to be made. Expecting a horse to start well but ultimately fade could be an angle to exploit.
Trading is all about betting on how you expect the odds to move and cashing out for a guaranteed profit, rather than worrying about the eventual outcome of an event. Trading is a good betting strategy, but it does take a lot of time, focus and patience. Trading is a way of building more careful and risk-free profits, but at the same time these profits could be smaller hence why patience is required. It takes dedication and also a level of betting intelligence. Not every bettor will lead a lifestyle that makes successful trading a possible betting strategy, but even on a casual level trading may be a fun exercise to improve knowledge of the market and enjoy some in-play streaming events. Truthfully though, trading is a good betting strategy that is arguably best left to a professional bettor or those with more time on their hands.