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SportsInsights.com Article -- "SureBets" and
"MOP" Features
As a leader in
sports information services, SportsInsights.com has recently
introduced some interesting
sports betting strategies and
additional features
to our Premium Pro Members. This article highlights two of
these betting strategies that will diversify our Members' portfolio of investing strategies:
SureBets and MOPs
(Middling Opportunity Plays). Please see our
Guide
and Introduction to SureBets and MOPs if these
approaches are new to you. The goal of this article is to
help you understand the thinking behind these arbitrage methods.
The information
on this site is for entertainment and educational purposes only.
Use of this information in violation of any federal, state, or
local laws is prohibited.
Arbitrage
On Wall Street,
there are categories of traders that seek out arbitrage
opportunities. These unique opportunities are great: you
take offsetting positions that result in no risk -- and a
profit (which is normally relatively small). These
arbitrage trades can be made in any financial market. One
famous example involved a trader who studied the Japanese Nikkei
stock market and took offsetting positions whenever there was a
price difference between two different country's futures markets
on the Nikkei. For example, if the Nikkei was trading at
15,800 in Singapore, but 15,780 in Tokyo, the trader
could buy at 15,780, while selling an equivalent amount at
15,800 at the other exchange.
Sounds good,
eh? Why can't we ALL do this? Well, the profit margins
on financial market arbitrage are normally razor-thin.
Trading costs and commissions would eat up more than the
arbitrage profits. This is why the "big players" on Wall
Street have a corner on this market (as well as related trades
such as Long/Short Equity or Basket Trading). Other
drawbacks include:
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Arbitrage opportunities are relatively rare. Seeking "arbs" are
a lot of work for a relatively small profit,
percentage-wise. As a result, the large Wall Street
firms typically do this in large size.
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Commission costs might make it too expensive to take the position
(eliminate profit). Professional Wall Street
arbitrageurs often trade in bulk and have negotiated low
commission costs. Note that in the case of the sports
investor, "vig" replaces commission costs.
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Other arbitrageurs (and the market itself) often corrects
mis-pricings rapidly and diminishes the arb's profit
potential.
SureBets
SureBets are
similar to Wall Street arbitrage -- but is arbitrage within the
sports marketplace. SureBets are a combination of
offsetting bets in the sports marketplace that yield a profit,
with no risk. For instance, if you were to find the
following set of bets at two different sportsbooks, you could
take both bets and be guaranteed a small profit.
No matter which
team wins, you are guaranteed a small profit due to the
"positive (+102) vig." Bets are not normally this easy to
compute (both with "positive vig" of +102). Many will
involve a combination of plays that might be +115 and -110 on
the same game. In sum, however, this still yields a
profit. The SportsInsights SureBet feature sifts through
the data at all of our sportsbooks to uncover arbitrage plays.
MOPs (Middling Opportunity Plays)
In our example above, what if, at Sportsbook B, the Jets were instead:
This would seem
to be an even better opportunity, right? It
definitely is -- and would be flagged as a MOP play. In
this case, no matter who wins, we would be guaranteed a small
amount of profit based on the "positive vig." In addition,
if the game happened to end with the Colts winning by EXACTLY
10, we would win one side of the MOP (Colts -9.5), and PUSH the
other side (Jets +10). This wouldn't happen often, but
when it does, it would be a nice surprise.
Note that this
set of lines at two sportsbooks is very rare. More often,
you will see a line as follows:
In this case,
there IS some cost of VIG. However, it would be a good MOP
play. How much VIG can we afford to pay to make this
profitable? What percentage of the time does a MOP hit?
SportsInsights.com's MOP feature takes into account the
multitude of probabilities and events that can occur. We
flag plays that should earn a positive return on investment in
the long run. For a better feel for the percentage of
games that might land on a "middle," take a look at the
probabilities in this article. Most of the time, we
won't "hit" a middle -- and will lose a little bit of vig.
On the other hand, when we DO hit a MOP, we can win one or both
"legs" of the MOP.
Important MOP Points
SportsInsights.com's MOP feature considers all of the factors we
list below. Investors should have a good understanding of
all of their investments -- including MOPs.
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We want to
stress that a large majority (perhaps 90%!) of MOPs will result in a small loss (a few
percent; normally -1% to -6%) of your invested capital.
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However,
when a MOP "hits" (potentially 2%-10% of the time), you will
win one of both legs of the MOP. Depending on how you
look at it, this can be 1 or 2 units -- or 50% to 100% of
your invested capital.
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Thus, the
reward to risk ratio can be 10 to 30 (or more) times the
normal expected loss of "vig." The main thing, of
course, is that we expect long-term positive returns for
MOPs.
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VIG is very
important to MOP profit margin computations. If you
overpay for the chance of a MOP hitting, it could turn a
positive-expected return to a long-term loser.
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MOPs are
available for sports that use Point Spreads or Totals -- but
not Moneylines. Thus, MOPs are available for baseball
totals, but not baseball moneylines and sides.
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In
football, "key numbers" such as 3 and 7 are important to MOP
calculations. SportsInsights has studied these (and
other) relationships carefully over years and thousands of
games.
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In
baseball, MOPs are available for Totals. We've studied
historical results -- and
have even studied how odd numbers come into play for run totals.
Disclaimer
We do not guarantee that the trends and biases we’ve found will
continue to exist. It is impossible to predict the future. Any
serious academic research in the field of “market efficiencies”
recognizes that inefficiencies may disappear over time. Once
inefficiencies are discovered, it is only a matter of time
before the market corrects itself. We do not guarantee our data
is error-free. However, we’ve tried our best to make sure every
score and percentage is correct.
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