Technical Arbitrage and Hedging in Sports Spread Betting

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I’m pretty experienced spread betting the stock markets which is why I’m keen to get my teeth back into trading sports and taking advantage of arbitrage opportunities. Shares are too volatile at the moment and could be for a while for my style of trading. As you can imagine arbitrage spread betting opportunities in sports are scarce these days no matter how good you are at it, because getting decent amounts matched are impossible as spread betting providers keep improving their pricing systems.

By technical arbitrage/hedging I mean, (as an example) looking to exploit cross market performances in sports by stripping out the component parts and reducing exposure or at times creating an arbitrage situation…

I was initially introduced to the sports spread betting arbitrage concept way back when I was a client of SpreadTrades. Sadly they have since disbanded. At the time team performance in football was my biggie. However, the firms just got better and better at pricing it up as time went on and it is harder these days to arb successfully.

What I do to take advantage of arbitrage opportunities is to buy and sell the ExtraBet team performance index and hedge the best available time of the opponents 1st goal. Occasionally one can still get some on the rugby, but they are as rare as hen’s teeth these days.

That was one of the options. The best was the Irish lot’s component where they took off three for a corner conceded. In these days they had an unusual method of pricing up the set markets in tennis, when they first started out. I took full advantage, even though they had a couple of attempts at getting it right, their market maker was way off base. Unfortunately I did not last long with them. They took away my internet trading and when I phoned them up they referred me to the trading manager, who restricted me and moved every price as well. Basically they were telling me that I was not welcome anymore, so I gave up with them. I noticed after that, they changed their tennis set betting to fall into line with their competitors.

Of course, there’s no such thing as a free lunch or a holy grail and I have to accept that. My next step is to invest in some decent software as trading off the Betfair site isn’t suitable, and thus I need to keep researching.



Source by Andy Richardson

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