Lesson 4 of 9

Hedging, arbitrage and middles

Positions that pay whatever happens, and the ones that sometimes pay twice.

  1. 4.1Hedging a bet you already haveLocking in a result, or walking away flat — and the stake that does each.
  2. 4.2How to hedge a parlay on its last legWith one leg left, bet the opposite side of that leg. Stake the parlay's full return divided by the hedge's decimal odds to lock the same profit either way, or less to keep some upside. Every hedge costs a little EV.
  3. 4.3Arbitrage: profit that does not depend on the resultWhen two books disagree far enough, covering every outcome costs less than it returns.
  4. 4.4How to find arbitrage betsConvert the best price on each outcome to implied probability and add them. Under 100% is an arbitrage; stake each side in proportion to its implied probability and every outcome returns the same.
  5. 4.5Arbitrage betting risks, and how people manage themAn arbitrage is only locked once both legs are placed on identical outcomes and both stand. Voids, rule mismatches, stake caps, line moves and limits are how that fails, and each has a routine fix.
  6. 4.6Middles: the small loss that occasionally pays 20 to 1Two bets either side of the real line, where one result cashes both.
  7. 4.7Low hold, and clearing a rollover without bleedingThe cheapest two-way markets on the board — how to churn turnover for the least money.
  8. 4.8Hold and vig explainedAdd the implied probability of every outcome; the amount over 100% is the book's margin. At −110 each way that is 4.76%, which costs about 4.55% of whatever you stake.