We explain how to calculate arbitrage bets to give you an understanding of the maths behind arbitrage betting, and why it’s a low-risk betting strategy. Learn how to calculate arbitrage bets between bookmakers and an exchange to maximise your potential arbitrage betting profit.
If you’re new to arbitrage betting we have already explained in detail what it is, but to provide context for this article, it is a trading technique which benefits from price differentials between two or more bookmakers or betting exchanges to guarantee a profit regardless of the outcome.
Arbitrage sports betting is the method of placing bets on all outcomes of an event at odds that guarantee a profit regardless of the eventual result.
Let’s explain this briefly. A fair market would be priced at 100% based on the likelihood of an event occurring, however, bookmakers will price their odds to go above a 100% probability, therefore giving them an edge.
Arbitrage opportunities are the reverse of this, whereby an arber will bet on all eventualities across a number of betting providers, giving them the opportunity to take advantage of discrepancies in price so the probability of the odds they have bet on is lower than 100% – therefore in their favour.
It is fundamental when making an arbitrage bet to understand the maths behind arbitrage betting, however if you need to quickly calculate an arbitrage bet our arbitrage calculator is free and easy to use.
Arbitrage calculator
Using the Smarkets arbitrage calculator is simple. Just follow the below instructions:
- Input the total stake you want to risk.
- Input the odds for outcome 1 and the commission if on a betting exchange (if you are arbing between bookmakers set the commission value to 0).
- Repeat for the other outcomes you would like to arb (add new outcome if you require more than 4 outcomes on a market).
- The arb calculator will then automatically inform you how much you need to stake on each outcome and your profit.
How to calculate arbitrage betting between a bookmaker and exchange
The most common arbitrage bet is made by taking positions in the market across a bookmaker and a betting exchange – backing at the bookmaker and then laying the same outcome on the betting exchange.
As an example let’s say you want to bet on a tennis match between Player A and Player B. The odds on the bookmaker and the market implied probabilities in brackets – learn how to calculate betting margins – are displayed below:
Player A to win |
Player B to win |
Market margin |
|
Odds |
2.20 (45.45%) |
1.68 (59.52%) |
105% |
You now look at the lay price on Player A to win – betting that he won’t win – which is 1.98 with the Smarkets exchange. The table below highlights this is an arbitrage opportunity as the combined implied probability for bets is 95.96%.
Player A to win at bookmaker |
Player A not to win at Smarkets |
Combined market margin |
|
Odds |
2.20 (45.45%) |
1.98 (50.51%) |
95.96% |
Calculate your lay stake for arbitrage bets on a betting exchange
Now you stake £200 on Player A to win on the bookmaker with odds of 2.2. To calculate your lay stake on the Smarkets exchange you simply use the following calculation:
(back price x back stake) / (current lay odds – exchange commission)
Resourse: https://help.smarkets.com/hc/en-gb/articles/