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How Arbitrage Trading Works
By Timothy Rohrer, Sat Dec 10th
Copyright 2005 Timothy Rohrer If you are reading this article, you are probably one of themany people who would like make money online working from home.The truth is 99% of these people fail because they simply lackthe information that will guide them to success. Sportsarbitrage trading is an extremely effective way to make moneyonline given the right information and execution of trades. Arbitrage trading is not to be confused with gambling whereasgambling involves a risk. Sports arbitrage trading is using themarket in such a way that a risk-free-profit can be generated onthe outcome of an event. In arbitrage trading we are takingadvantage of bookmakers with different opinions on an event toensure a certain profit.
In the financial markets, this may involve buying a commodity orfinancial instrument in one market and simutamously selling thesame commodity or financial instrument at a higher price onanother market to ensure a risk-free-profit. In Sports bettingarbitrage we are profiting from bookmakers having differentopinions on the outcome of a sporting event. Arbitrage in the sports market exists because different agenciesoften post different odds on the outcome of a game. Suppose theYankees are playing the Red Sox. BookmakerBet365 is giving evenmoney on the game, so a $100 bet placed on either team will earnyou $100 if
the team you picked wins. Another bookmaker, Bodogshas the Yankees at +200 which means if you place a bet withBodogs on the Yankees to win you will get $200 if they win, and$100 if they lose. You can guarantee yourself a profit if youmake the following bets. 1) Place a $300 bet on the Red Sox with Bet365 at even odds. 2)Place a $200 bet on the Yankees with Bodogs at +200. If the Red Sox win, Bet365 pays you $300. However, since theYankees lost, you lost your bet with Bodogs and must pay him$200. Your profit is $100, as that's the difference between whatBet365 pays you and what you must pay Bodogs. If the Yankees win, you will also profit $100 since the bet youmade with Bodogs was at +200, Bodogs pays you $400 for your $200bet. Since the Red Sox lost, you must pay Bet365 $300. Again,your profit is $100, represented by the difference of whatBodogs pays you and what you must pay Bet365. There are a number of gamblers who exploit the differences inodds from bookmaker to bookmaker. It's not as easy at it seemsbecause it requires extensive research and time consuming numbercrunching. However, there are software programs available thatwill find arbitrage trades automatically in real time and do thenumber crunching for you, making it a very profitableopportunity. About the author:Tim Rohrer is an established writer and arbitrage trader. Learnhow Tim Rohrer makes thousands of dollars each month as anarbitrage trader. http://www.profitplusonline.com
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