How to Bet on the Stock Market?

Bet on the Stock Market

Professional sports betting sounds like a dream for many. But with the rise of sports betting exchanges, it’s now more possible than ever to find consistent profits from betting on sports. It’s far from easy, and you still need luck to move in your favour as you bet. But by using the unique mechanics of sports trading, similar to stock market trading, it is possible to find these opportunities for profiting by betting on sports exchanges.

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How sports trading markets work

Sports trading takes place on betting exchanges, where punters are able to buy (back) and sell (lay) different markets. For all intents and purposes, this functions just like the stock market. You buy odds when they are low, sell odds when they are high and pocket the difference - or so the theory goes. In practice, this takes both nerve and judgement, not to mention a bit of luck, in order to profit from the difference.

Betting exchanges have sports traders on both sides of every market. When someone is buying (backing) an outcome, someone else is selling - and so, a market is made. Your job as a sports trader is to exploit the fluctuations in odds that happen when outcomes become more or less certain over the course of a sporting event, in order to give yourself the best chances of success.

Sports trading benefits from more flexibility than placing bets with traditional bookies, as well as the ability to respond quickly to changes in the action as it unfolds. Sports traders will almost always look to follow the action along live to make sure they are responding to changing conditions in a timely fashion, and to prevent taking undue risks with the bets they make. Profits can only be found when you bet on the right directional movement of the markets and buy/sell at the right times.

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Practical examples of sports trading markets

Consider a player lining up a free-kick from 25 yards out. At this point, his team’s odds of winning drop from 1.50 to 1.40. In anticipation that the free kick will not result in a goal, you lay the outright result - i.e. sell at 1.40 for £100. The free-kick misses, then the odds of the win shoot to 1.55 - giving 0.15 gap. At that point, you buy back the win for £100 to close the position, and make a £15 profit in the middle. If, however, the free kick does result in a goal, the odds could plummet to 1.20. Buying back at this level reduces the risk, and locks in a loss of £20 - 0.2 between the 1.40 you sold and the 1.20 you bought back.

This can be a little tricky to get your head around at first. It’s essentially looking to profit from the movement of odds over the course of a sporting match - when things move against price-in expectations, you can take your advantage from the drift in odds. But you need to move quickly, execute the right decisions, and be prepared to take some losses early along the way to avoid getting caught out.

One of the hardest facts of life when you’re trading sports like this is accepting losses when they arise. But it’s invariably better to buy or sell your position and lock in a loss now, than it is to give undue patience to positions that are losing. This is what separates successful long-term sports traders from those who will burn through their bankroll like an average punter. It’s this trading mindset you need to succeed from trading on sports exchanges.

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How to get started trading sports

If you’ve decided to give it a shot, check out betting exchanges like Betfair, and start without software until you learn how the markets respond to different changes in the action. Look to get started with little amounts of money in the early stages, and try to build your first months in profit before looking to scale your operation. The lessons you learn here, even trading with small amounts, will be vital to determining your future success - as well as highlighting errors in your strategy and approach.

Only once you’ve cleared some repeatable, consistent profits should you think about tooling up with software, and approaching sports trading on a more serious footing. While you might have to bet a lot to get there, there are profits to be made for those who trade sports effectively. With the right approach and a focused mindset, finding these opportunities for profits becomes more achievable with time.

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How much money do you need to get started?

There’s no need to have a lot of money on betting exchanges to get started. Most trades are very short term in their nature, exploiting movements in odds over a matter of minutes. All the money you win is reinvested as your bankroll, so there’s not strictly the need for a large amount of capital to get the ball rolling. However, you might find in practice that you need to bet a lot of money to make small gains in terms of a profit.

One trader we spoke to said he would consider betting up to £400,000 to yield a profit of about £10,000 - all in short term trades, with high volume turnover of betting positions to maximise the opportunities for profit.

However, you do need to control your downside exposure very tightly. Positions that could result in a loss need to be closed out ASAP, or you’ll end up eating into what you’ve won, with potentially devastating consequences. It’s all about balancing the risks with the rewards, and making sure you’re never exposing yourself to runaway losses on your trades.

Trading sports on betting exchanges is far from easy - but it is doable, as many professional sports traders will attest. With discipline, an unemotional attachment to trades, and a willingness to learn from your mistakes, it’s possible to use your bankroll to build a reliable source of revenue from winning trades. It’s not without its risks either, but with the right strategy and learning in place, it’s possible for anyone to make decent money betting on sports exchanges.

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