Last Updated on Apr 8, 2020 by James W
Something that’s becoming more of a profession and less of a pastime, sports trading is an opportunity to make consistent profits on trading the movements of sports betting markets on trading exchanges such as Betfair, Betdaq and Matchbook.
What is a sports trading exchange?
Put simply, it is a marketplace for sports traders to trade the outcome of a sporting event in real-time. It’s a platform for gamblers to trade against each other as opposed to a bookmaker. Users can set their own odds for an event by backing (buying) or laying (selling) at a specified price or taking odds set by another trader. In fact, a sports trading exchange effectively allows individuals to become their own bookmaker, with prices determined by a free market as opposed to a bookmaker.
What is sports trading?
To be realistic, the average bettor on sporting events through online and offline bookmakers arguably still doesn’t know what sports trading actually is. In essence, sports trading on exchanges is just like trading the stock market. Rather than purchasing and selling shares of a company or commodity, a sports trader buys and sells a team or player during or before sporting events. Sports traders will seek advice from fellow traders and pundits experienced in specific sports and leagues, much like financial traders who seek spread betting tips on forex, for instance – another activity that’s becoming increasingly popular online.
What is really cool about sports trading is that once you have bought and sold your player or team to complete a trade – by either buying high and selling low or vice versa – you can guarantee a profit regardless of the final outcome of the event.
That’s unlike those who place outright bets with bookmakers who run the risk of losing their entire stake. Better still, if you’re a UK resident, all profits derived from online sports trading are deemed tax-free in the eyes of the UK government as sports trading exchanges are still under the umbrella of ‘gambling’, offering an attractive alternative to financial investments.
What sports are most profitable to trade?
In short, the best sports to trade on exchanges are those with the most liquid markets. A ‘liquid’ market is one which has plenty of money looking to buy and sell at both ends of a sports market. Liquidity makes it easier to complete a full trade. Trading an obscure Romanian second division football match will no doubt have very little money flowing through it, making it hard to complete your trade in some circumstances, forcing you to accept poorer value prices in the long run.
On Betfair Exchange, the world’s leading sports trading exchange today, the best sports to trade for beginners are football, tennis and horse racing. With football, the most popular markets to trade are the ‘Match Odds’ and ‘Over/Under ‘X’ goals’ markets. The Match Odds markets allow traders to buy or sell a team to win or lose, or sell the draw if both teams are trying hard to score a goal. Similarly, sports traders will also use their knowledge of teams to decide whether a match will feature over or under a specified number of goals.
In tennis, traders can trade the price movements of players in a 1-v-1 or doubles match with every point that’s played; buying or selling a player at a time when the trader thinks they may go on to win or lose. It is a similar case with trading horse racing markets, with the ability to buy or sell one or more horses each race and take small profits over the course of a day.
Of course, being an online-based profession, sports trading also means that you can do this from the comfort of your own home or even on your travels anywhere around the world, providing you have an internet connection. That’s another common element sports trading shares with forex trading, in fact.
Traditional sports bookmakers are certainly feeling threatened about the growth of trading exchanges, which offer traders better value than almost all high street bookies and the ability to make money pre-match or in-play regardless of the final score. Most exchanges will offer new customer bonuses upon sign-up, so take advantage of that to build up your trading bankroll slowly. It’s not a get-rich-quick scheme and success won’t happen overnight, but if you excel at it, you could achieve at least a decent second income.
