Using volatility to create profits on the Betting Exchanges

Bookmakers, betting markets, etc.

Similarity betting exchanges – financial exchanges

There is a tremendous similarity between betting exchanges and financial exchanges. Successful traders depend on numerous things in order to operate and one of them is volatility of price movement. Volatility is nothing of course without liquidity and the horse racing markets on the betting exchanges offer both of these advantages in abundance.

Some of the biggest swings in online sports betting odds occur during horse races in running as under and over reaction seems to rule the roost. You can often find races where several horses are odds on in the same race or the same horse is odds on in the same race several times. I have seen numerous horses reach 1.01 in running only to then get beat or to ricochet out to far bigger odds.

Volatility in many forms of gambling is not your enemy but your friend. In fact in forms of gambling like poker for instance then volatility can mean weaker players over value their own skill and this serves to keep them in the game for far longer!

A professional acquaintance of mine is highly adept at reading races before they are run. He uses a combination of watching past races and form analysis to try and ascertain how races are going to be run. If he feels that the line up of horses dictates that certain horses will be held up or will lead then he bases his bets accordingly.

I know that he uses the effect of the draw as well to form his bets and he also keeps a close eye on the local weather as this is another clear factor on how horse races are run. If a horse likes fast ground and the overnight rain has softened the ground then this will have a clear impact on the race.

But this guy does not form opinions or bets on what will win the race, he merely uses data in a different way. He uses data to assess how he thinks the race will be run and bets accordingly. Another factor in his method of operation is in the types of races that he picks. He will only ever bet on sprints and races of no more than a mile. National Hunt races and longer races can lead to certain horses pulling away slowly and that is something that he does not like.

He finds that the sprints and shorter races offer him the most scope for volatility with regards to in running prices and odds. This is a highly effective way of operating and I have sat beside him on two occasions and have been amazed at how he can call races and how he expects them to play out. It takes a lot of hard work and preparation but then again that can be said of all forms of gambling.

If there are markets on the exchanges that have tremendous volatility and have also immense interest among large numbers of punters then opportunities to make money will present themselves.