- Surebets and Middle Opportunity Plays
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.
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:
- 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.
- 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.
- Other arbitrageurs (and the market itself) often corrects mis-pricings rapidly and diminishes the arb’s profit potential.
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.
- Sportsbook A: Colts -9.5 at +102, and
- Sportsbook B: Jets +9.5 at +102.
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:
- Sportsbook B: Jets +10.0 at +102
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:
- Sportsbook B: Jets +10.0 at -103.
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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
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.