For sports bettors looking for an edge on some action, the extremely niche but growing industry of sports trading might be the move.
The next step in the evolution of betting, sports trading, similar to stock trading, is the exchange of bets between two users who perform transactions on opposite sides through a betting exchange platform, allowing for the matching of the bet.
Sports trade exchanges work just like other financial markets, with traders worldwide using the matched trading platform to place wagers with each other in a few easy steps.
Rather than wagering on a straightforward bet such as the winner, sports trading is a more sophisticated approach to wagering on outcomes, allowing players to sell their positions before the end.
The beauty is the result of the contest doesn’t factor in, just the price movement.
Started by Betfair in 2000, the hybrid trading and sports betting exchange offers peer-to-peer sports trading rather than betting against the house. One of the most appealing aspects of trading is that sports exchanges allow players to lock in trades at their preferred odds. The exchange doesn’t set the odds or the line; the bettor makes their own odds.
Sports trading hasn’t been able to maintain operations stateside, but Colorado, Nevada, New Jersey, Tennessee, and Virginia are working towards bringing sports betting exchanges back online in the US. Prophet Exchange is the first p2p betting app to go live in NJ, with plans to expand further.
This form of sports trading isn’t like your classical activity involving sports trading cards. There is no sports card or a trading card to hand, this involves betting on the horse racing, baseball or any other sporting event. You may have also heard of pins but this also isn’t relevant for a sports bettor.
Novice sports traders should have an in-depth understanding of sports betting and sports trading resources before they begin.
To help you get started, we’ve created a comprehensive review covering everything from the basics, to placing a bet, sports trading techniques, different trading software, and additional resources.
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Is Sports Trading Currently Available in the US?
Although there is no dedicated sports trading app currently available in the US, these should arrive soon. We have provided a guide below on what you can expect when using betting exchanges.
- DraftKings Sportsbook
- BetMGM Sports
- FanDuel Sportsbook
- BetRivers Sportsbook
- Caesars Sportsbook (Part of Caesars Entertainment, formerly William Hill)
- Barstool Sportsbook (Owned by Penn National)
All of the above new online sportsbook sites excel in the online sports industry. If you want to bet on significant events such as the Super Bowl, you may find perks such as a free bet to wager on major events. Legal sports betting is massive in the US; no longer is gambling reserved just for the bright lights of Las Vegas. Numerous legal sports betting sites are now available, so sign up and get involved today!
What Exactly is Sports Trading?
Sports trading works by having two bettors place opposing bets on the same selection. Like stock trading, sports traders are trying to find underpriced assets relative to their actual value, but instead of trading stocks of a company, sports traders pick a side of the price movement on spreads, point totals, player props, etc. Buy low and sell high, if you will.
To make a successful sports trade, bettors must have a reason to believe the price is expected to move. There can be many reasons for this, including injuries, rotation changes, various in-game events, etc. Sports traders interact with the sports betting exchange by either backing a bet, which means accepting risk in the market, or taking the pessimistic opposition by laying a wager.
Sports Trading 101
Depending on the current market price and the direction a trader thinks it will go, bettors can either back or lay stake. The range is adjustable, although not all numbers are getting matched. A more active type of wagering, it’s crucial to understand and monitor the subtle changes in the situation and be ready to close out to capture the trade in the green if on the right side or when in the red to help limit the losses. Quickly cutting matched betting losses will ensure you have more to roll into winners.
Trading a Bet
Backing a bet means the trader believes the bet will win and the number will increase and will be able to cash out later in the positive as the line moves as anticipated.
Laying odds would be the opposite. The trader thinks the price will slide in their favor. Like shorting the stock market, there is more risk to laying a trade, as you can lose more than the stake you wagered. It does require you to have some reserve funds in your account.
Placing the wager is similar to sports betting. Select the best odds, enter the stake, and click confirm.
Closing a Bet
During the match, closing a position in profit or loss itself is trading, not betting. Trading out of a position comes down to comparing the value of the bet at the time of placing vs. the current market price. If the price is at or higher than anticipated, traders will want to consider closing out their position. Sports betting exchanges have a cash-out tab with unrealized gains indicated like straight betting sites. Click to close out.
Hedging a Bet
To spread the result, traders can hedge. Also referred to as greening, hedging is placing two bets against each other to make yourself a profit. Laying low and backing high, no matter the event’s outcome. This strategy is particularly effective for horse races betting. To make a successful trade, place a back bet on the favorite in a horse race to win while also putting a lay bet against them, effectively locking in the field as a security blanket.
It’s essential to keep your back and lay bets in an enticing range to ensure they lock in quickly at the numbers you’re looking for when working with real-time odds. Being on-site is still the best way to bet horses. Track-side betting causes significant and swift changes in odds, leaving only half of your hedge locked in if you’re not cognizant. If the opening bet is going well, traders can place an extra lay bet for added insurance if it were to fall off the wheels.
What did we learn from this sports trading example?
Hedging can be an easy way to guarantee a small profit but understanding and executing is more complex than playing one trade. It will also require more upfront cost and extra time to place and close effectively.
Capital Required for Sports Trading
Sports trading doesn’t require substantial capital because odds exploit the temporal decadence over time, allowing traders to start small and compound gains. For those serious about learning the ropes and being able to absorb any early teaching-moment losses, traders should begin with at least $100.
Can you Win Money Trading Sports?
To make sports trading profitable many variables need to align, including the understanding of the sport traded, size of the bankroll, and speed advantages of additional software. The difference between a successful sports trader and someone in the red is the ability to digest new information quickly and execute trades even faster. Take the time to learn, observe and sharpen your skills in a training mode setting.
Sports Betting vs. Sports Trading
A sports trading exchange is different from a sportsbook betting market. Instead of betting on the outcome, users are wagering on the change in odds of the predicted result. Trading is more complicated than traditional sports betting but has the opportunity to net higher rewards faster. There is more control over the bet variables and a chance to make a profit even on an unsuccessful outcome.
Systems and Sports Trading Strategies
Just like with stock trading, money management is vital. It allows you to divide funds for each trade to minimize the risk. Remember that immediately before an event starts, or as the market gets closer to the end of a contest, the price will trend towards its true probability while becoming less volatile, thus limiting the upside.
Value betting is the basic betting strategy of placing a wager on odds you think are a good value. For instance, a coin has a 50/50 chance of landing on heads or tails. If you value bet $1 that the coin would land on tails, you will win $2 if correct. That’s $1 of the original stake plus an extra $1 of winnings.
Value bettors understand not all of their bets will win. They hope to be profitable in the long run by staying consistent.
Scalping is a term commonly used in financial trading. It’s used in a very similar fashion in sports trading. Scalping is a technique that involves trading small price movements repeatedly. Typically, scalpers use a tight stop-loss and only aim to make 1 or 2 ticks by backing and laying continuously, exploiting the temporal decadence of the odds of the current result during a live match.
This technique is best used in stable markets where the price isn’t moving much. To scalp successfully, it is necessary to fully understand the operating and technical features that allow you to trade with minimum delay.
Opposite of scalping, swing trading involves a more significant and longer position. Swing traders aim to profit from bigger price movements. Stop-losses are generally set further away from the current price because swing trading is more suited to volatile markets where the price is bouncing around and liable to continue moving.
Impatience is the enemy of this type of trading technique. Before placing a wager, it’s essential to have a clear plan of entry and an understanding of what conditions will cause you to exit.
Longer plays run the risk of overnight movement wiping out a position in the market. Unlike financial markets, sports trading exchanges still operate at night, so there is no guarantee that last night’s price will be today’s starting number.
Sports Trading Software
Sports traders will be missing a significant advantage if you’re not using trading software. These programs give a speed and data edge by allowing traders to see odds faster than on the sports betting exchange and place bets quicker.
At the click of a button, traders can wager a pre-specified stake amount. The time saved can make the difference between missing a big swing and catching it at the exact moment. Along with one-click betting, trading software features full market depth, including advanced charts & trading ladders. Most software also has back-end connections to the Betfair website.
- Bet Explorer
- Geeks Toy
- Odds Archive
- Trademate Sports
Best Way to Learn about Sports Trading
With the idea of sports trading still gaining traction, helpful information can be tough to come by; however, some individuals are still keen on helping others level up online. Be sure to cross-reference and backtest any strategies before implementing them with real funds.
Join the Community
With limited accessibility, sports trading communities are few and far between. Along with the Betfair forums, the chat sections of top sports betting software like Geeks Toy and BetAngel may be your best bet for finding like-minded individuals or vetted sports betting exchange strategies.
If you’re passionate about playing the lines, the lack of consistent online content is an excellent opportunity to start your own gig. It could lead to more money for trading, which never hurts.
Sports Trading Platforms
Betfair is the leader in the sports trading business. Publicly listed on the London Stock Exchange, Betfair is compatible with all Android and iOS mobile devices and offers a trusted and safe gaming platform. Regulated by multiple gaming commissions, the exchange uses encryption technology so players can register, make payments, and use the site knowing their information is protected.
Betfair accepts bank transfers, checks, PayPal, Skrill, and Visa and offers new exchange users a risk-free bet worth $20. The trade must be placed within the first seven days of signing up. Use sports promo code VAL225. Other terms and conditions may apply.
Other significant sports betting exchange names include Matchbook, Smarkets, and Betdaq. The first two have websites with modern layouts, which are much easier on the eyes than Betfair.
Matchbook features a pair of welcome bonus offers to choose from along with medium liquidity. Traders can get 0% commissions for 90-days using promo code COMMFREE or a risk-free first bet up to $30 by entering MATCHBOOK30. To qualify, traders need to place their first wager within seven days of signing up and on odds of 1.8 or higher. Free bet credits must be used in seven days.
Smarkets does have higher liquidity but charges a commission on trades, albeit lower than most other exchanges. Smarkets have two welcome bonuses, including 60 days of commission-free trading using promo code COMMFREE or a free $20 first-bet refund with SMK20. Traders must deposit at least $10 using either a debit card or an instant bank transfer. New users have seven days to use their bet credits. Accounts using trading software will not be eligible.
Betdaq has the most generous welcome bonus of the bunch, offering $20 in free bets no deposit after placing a $20 first trade at odds of 2.0 or greater. Use promo code BG2020. New users have two weeks to place their qualifying first bet and the standard seven days to play through any credits.
Prophet, ZenSports, and Sporttrade hope to break into the US market. ZenSports is making inroads in Colorado and Nevada, while hoping to gain access to markets in Tennessee and Virginia. Sportstrade inked a deal with Bally’s Corp with plans for New Jersey.
Some aspiring online personalities or infrequent YouTube posters put out sports trading content. The problem with many monotonous subjects; presenters tend to be a bit dry, which is the case with sports trading.
Picking a personality is a bit of a personal preference. Many of the guides and trading strategies will be similar, so an engaging watch or consistent streamer will be the difference. A quick search of sports trading should suffice.
There are individual and group courses available from some companies or content creators. They could be helpful, but there are usually enough free resources to get started. Along with Betdaq, Matchbook, Sportstrade, and ZenSports having their own active YouTube channels, various personalities are trying to capitalize on the resurgence in trading on sports betting exchanges.
Sports Trading 101 Videos
Sports betting exchange tips and tricks can be easily found on YouTube with a quick search.
With 54k subscribers and an excellent website, BetAngel is a name you need to know. Some of the content is bland, but the output is consistent and covers sports trading topics in-depth.
Alex Ong is another personality with 54k subscribers, but sports trading nuggets are mixed with more traditional financial talk. Caan Berry Pro Trader has the most subscribers at 105k and more energy but less educational content. Lesser-viewed Trademate Sports is making videos, but coverage includes sports betting talk and some shilling.
Popular YouTube Tutorials:
- Under 2.5 Goals Strategy (How To Make An Income on Betfair Exchange)
Alex Ong / 463k views / posted two years ago / 15 minutes
- Betfair Trading (Sports Trading for Beginners)
BetAngel / 88k views / posted 13 years ago / 7 minutes
- How to Use a Betting Exchange (Betfair Trading for Beginners)
Caan Berry / 63k views / posted 2 years ago / 11 minutes
- Betfair Trading Strategies (Scalping on Betfair Explained – Full Tutorial)
BetAngel / 54k views / posted 3 years ago / 20 minutes
- From Stock Market to Football Trader (Interview with Alex Ong)
Trademate Sports / 4k views / posted 2 years ago / 34 minutes
Tips for Trading Sports
The trading edge will depend entirely on the individual. It’s best to narrow your focus to a few sports and bet types. Some traders might be highly knowledgeable about a particular sport, while others may have a good understanding of market forces which helps them trade pre-event odds.
Once a focus has been determined, it’s time to observe odds changes and correlate events to help develop a reliable system. Experts will advocate keeping a journal to track trades, which can help quickly identify what is and isn’t working. If concentration is lacking, this may be a sign you’re either not ready or need to hang it up for a bit.
- Select a sport – one you understand the nuances: Example: NBA.
- Narrow down – what part of that sport will you focus on? Example: Golden State Warriors line movement before it was announced Steph Curry was back in the starting lineup.
- Develop a hypothesis – Do rotation changes/star players move spreads or points totals? Example: A star getting more time should mean more opportunities to score.
- Confirm or deny – is the market reacting as you anticipated?
- Document the results.
- Repeat until comfortable.
Sport Trading FAQ
Is sports trading like gambling?
While there is a risk, sports trading methods rely more on knowledge and skills and less on luck. The real gamble is you can digest an entirely new way to wager and execute at similar speeds as the competition.
Are there resources for sports traders?
Simply searching sports trading will bring up plenty of links to articles and videos. As the sports trading industry grows, expect more resources to be available.
Is sports trading better than betting online?
Sports trading is not better or worse than sports betting on typical sporting events, just different. Traders don’t have to worry about the outcome and have profit-producing hedge strategies available. Still, the high learning curve in trading and choosing software can be discouraging. In addition, the need to stay on top of in-game changes can be time-consuming.
Do US betting sites allow sports trading?
US betting exchanges are legal; the issue is liquidity. The Wire Act forces exchange operators to run separate exchanges in each state, which does not allow the transmission of gambling across state lines.
With that said, there is currently no dedicated sports trading available in the US. Users will either need a VPN to bet or take a vacation. If neither of those options sounds right for you, this is the perfect time to hone a strategy for when the time comes. States mulling moves include Colorado, Nevada, New Jersey, Tennessee, and Virginia.
How much money do you need to start?
One thing punters often want to know is how much capital do they need to start. The good news is you don’t need much. Most of the modern software available has a training mode option, so you don’t lost any money while getting to grips with the process. Our tip would be to definitely start with the training mode.
Once you feel comfortable with the market dynamics, you should still start out small. If you are successful, the numbers will add up quickly.