Unlike a recreational gambler who bets primarily for entertainment purposes. A sport trader is someone who places or manages bets for financial gain. This can either be in an individual capacity or on behalf of a company.
What is a Sports Trader? Two Types of Traders
In order to best answer the question of ‘what is a sports trader‘, we first need to break the term ‘Sports Trader‘ down into two sub-categories:
- Non-Corporate Sports Trader
- Corporate Sports Trader
A non corporate sports trader is someone who places bets on a sportsbook or betting exchange as a customer.
A corporate sports trader is someone who works for a sportsbook or sports betting company as an employee.
In essence, one trader is trying to beat the sportsbook and the other it trying to stop the sportsbook from getting beaten. Let’s take a look at both types of traders in a little more detail.
Non-Corporate Sports Trader
A non corporate sports trader is essentially a profitable bettor, often referred to as a sharp bettor or ‘Sharp’ for short.
Some people reserve the term ‘Sports Trader’ exclusively for people trading on betting exchanges, but I think the term really applies to anyone betting with the sole purpose of making a profit.
Sports Traders will utilize a mixture of analytical betting strategies to find undervalued or overvalued betting selections offered by betting companies. Similar to how wall street traders analyzes stock for under or overvalue companies.
I have listed some of these analytical strategies below:
Many sports traders start out with matched betting and arbitrage betting taking the relatively easy profits available at the soft books such as Fanduel and Draftkings before focusing more of their time on positive EV betting at sharps sportsbooks such as Circa Sports.
Ultimately, some of the most profitable sports traders use sports trading strategies at betting exchanges such as Betfair or Sporttrade.
Corporate Sports Trader
A corporate sports traders main role within a betting company is to maximize the profitability of the sportsbooks betting markets whilst minimizing the companies financial risk and exposure to sporting outcomes.
What does a sports trader do?
A sports trader may be tasked with the following responsibilities:
- Create betting markets and set opening lines
- Monitor companies exposure to sporting outcomes
- Hedge excess risk and liability according to company exposure limits
- Analyze customer bets to profile and identify sharp bettors
- Review potential promotions for loopholes and oversights
- Manage in-play and live betting markets
- Identify erroneous sports data and suspend markets.
A sports trader working for a ‘soft book’ or ‘retail book’ (sportsbooks that limit winners) will spend a significant time analyzing customers bets in order to determine if a customer is profitable in the long term and will ultimately lose the sportsbook money.
However, a sports trader working at a sharp book (sportsbook or company that accepts bet from winning players) will spend more time ensuring that the betting odds offered are as accurate as possible.
How much do Sports Traders earn?
As a corporate sports trader you’ll start on a salary of about $50,000 with the salary increasing up to $250,000+ as head of sports trading and risk management.
As an independent sports trader your earnings can vary. They can be anywhere from a few $1000’s of dollars to over $1,000,000+ in a year. It all depends on a number of factors such as your available capital, expertise and time spent looking for profitable opportunities.
Often an independent sports trader will find a profitable exploit or mistake in how a sportsbook prices there lines or set their house rules. This is called an ‘Edge’.
The independent sports trader will profit from the edge until the corporate sports traders realize and try to fix the oversight which created the ‘Edge’.
The larger and more profitable the ‘Edge’, the quicker the corporate sports traders are to focus their attention on fixing it. It’s really a cat and mouse game between both types of traders
This can result in sports traders making hundreds of thousands of dollars in a few months, weeks or even days. However, once the ‘Edge’ is fixed by the corporate sports traders I can be a while before another good opportunity arises.
This can make the world of sports trading very volatile when it comes to making a steady income as you’re edge can evaporate overnight. This is why many sharp bettors opt to become corporate sports traders.
How to become a Sports Trader?
In order to become a sports trader you’ll need to understand the core mechanics of sports betting such as:
- How sportsbooks make money
- How sportsbooks set their lines
- How to profit using arbitrage and matched betting strategies
- Bankroll management and Kelly Criterion staking theory
- Understanding of Expected Value
If you haven’t heard of Matched Betting or Arbitrage Betting before then the first starting point to becoming a sports trader is understanding these strategies. I have a guide on both of these betting strategies linked below.
These strategies are a great way to learn the fundamentals of profitable sports betting whilst earning money. Learning these strategies will set you up for transitioning over to longer term winning strategies.
Additionally, if you want to get a job as a corporate sports trader understanding these strategies and identifying customers using them is an essential part of the role.
If you’ve already profited from matched betting and arbitrage betting. The next step is to understand betting exchange trading and positive ev betting at sharp sportsbooks.
I would recommend reading a book called ‘The logic of Sports Betting’. It was written by Matthew Davidow and Ed Miller who together founded Deckprism Sports (Merger with Huddle Tech in 2022) a company which modelled in-play sports for sharp sports books such as Pinnacle.
The book gives a behind the scenes look at how sportsbooks create and set there odds and the area’s that sportsbooks are most vulnerable.
Their second book ‘Interception’ focuses on how to exploit these vulnerabilities for a profit.
The real end game of professional sports betting is sports trading on betting exchanges.
Sports Trading on Betting Exchanges
Firstly, what is a betting exchange?
A betting exchange is a peer to peer market for betting odds. Unlike a sportsbook where we are exclusively betting against the house. At a betting exchange we are betting against other sports bettors.
As a result, betting exchanges allow winning players. This is because they make their money by taking a small commission for matching players betting on opposite outcomes together. This means they don’t require players to lose money to make a profit themselves.
Another feature of a betting exchange is the ability to offer bets into the betting exchange market for other players to take. This means you can essentially become the sportsbook and set your own odds.
Additionally, On a betting exchange we can bet for both an outcome to happen and an outcome to not happen.
For Example, at a sportsbook we only have the option to bet for ‘Patrick Mahomes to score a touchdown’. At a betting exchange we have the option to bet For or Against ‘Patrick Mahomes to score a touchdown’.
This creates far more options in how we can bet during a sports event. For example, we could bet against Rory Mcilroy to win a golf tournament. Even though we may think his odds are priced correctly.
However, we know that he struggles with the first few holes of the current course. So we can bet against him and wait for other bettors in the market to react as he struggles through the first few holes. Other bettor will then bet against him and his betting odds will increase.
We can then place a bet for Mcilroy to win at the higher odds to hedge out our bet against him for a profit. Similar to buying and selling a stock.
Rather than profiting by picking winning or losing bets. We can profit by simply predicting which way the odds will likely move during a section of a live sports game.
If you’d like to learn more about sports trading there is a wealth of information created by professional trader Caan Berry on his sports trading guide.
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