How do betting odds work ?
It often happens that people are surprised at the odds set by bookmakers for a given sporting event.
Of course, they can sometimes make mistakes, especially when opening a market before it stabilizes.
But in general, it is us bettors who really influence the odds. We'll explain it all to you…
Sports betting supply and demand
Each rating is really only the balance point between supply and demand. As in many markets, there is a “real” price at which people are willing to “buy” a quote, or “sell” it. This is what Exchanges are for in betting. Betfair Exchange is also considered the undisputed number 1 in this area.
Over time, from the moment the market for a sporting event goes out, the bets accumulate, the stakes arise, and the odds are created under different formats (according to supply and demand) to form a new “price Steps".
Bookmakers set their odds
For their part, traditional bookmakers use slightly different operating systems. They set their own ratings and then adjust them according to the degree of financial risk they represent.
Even though they are inevitably bound by the perpetual movement of the market, a movement that requires price adjustments in parallel with the Exchange, they have a little more leeway to set their prices according to the margins they operate. Bookmakers therefore develop their own “odds strategy”, even if market traction remains unavoidable.
“Market Maker” bookmakers
Now let's talk about what is called "Market Making", namely the sports betting sites that reveal their odds first, thus putting themselves exposed on the scene.
It's true, early markets are often the most inefficient, with opening odds that differ significantly from closing. This is where good bettors make their profit.
In reality, these bookmakers are well aware that potentially ill-adjusted odds carry high risks. Therefore, they tread cautiously, accepting only a limited total amount of bets at these initial odds.
Very quickly, they then react to supply and demand on these incipient events, and adjust to the general market. Additionally, early markets typically have a higher margin to protect against increased uncertainty.
The evolution of odds in sports betting
On the other side of the scale, some bookmakers are patient, preferring to release their own odds once the market picks up steam and other bookmakers are already in place.
They analyze the existing odds, mix that with the market “limits” and their margins, then they create their own “prices” by sort of mixing all this data.
As I told you about above here, bookmakers focus their energy on risk management. They can accurately estimate the true odds of a given event, if the stakes expose them too financially on one side, they will not hesitate to put themselves slightly "out of the market" to encourage bettors to play on the outcome where they have few stakes and thus balance the risk.
If we try to summarize this big subject, a large part of the odds, especially in the most liquid and dynamic markets, reflect the law of the market.
Market maker sites can let quoting errors linger due to their lack of expertise, but beyond that, moves are driven by bettors actions. They are the ones who, in effect, dictate the trajectory of the odds, resulting in fair and balanced prices.
Thanks to Bet2Invest, you now have the chance to benefit from great opportunities via our “Opening Odds” bot. This will give you the possibility to obtain the opening odds of a sporting event in real time, and you will be able to play on potential values before the market stabilizes.
For the rest, our tipsters generally publish their predictions once the market has stabilized, which will allow you to follow them while keeping the same odds as the one at which they themselves posted, a real luxury when you know that today odds can drop significantly in some markets.
Wednesday, August 9, 2023
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