How to Milk the Betting Exchange Cash Cow

By Drew Kasch

Online betting exchanges such as Matchbook, Betfair, and Intrade are quickly becoming a speculator’s paradise. This is the very same book that has been selling online since 2005 for $39 per copy, recently revised and updated. Many professional online speculators credit this book as their training manual.
 
In fact, they don’t want you to have it. While you are sitting there a handful of betting exchange pros are going through their daily routine of finagling profitable positions, playing bookie, and working arbitrage angles at the betting exchanges for 6-figure annual incomes. Armed with the knowledge and tactics taught in this course, you can be one of them. Topics covered include:
 
• Complete detailed strategies for trading in the various markets offered at betting exchanges
• Differences between sports books, financial brokers, and betting exchanges – and how to exploit them
• Playing Bookie vs. finding overlays
• Primer on what betting exchanges are and how they work
• Explanation of the markets covered
• Understanding the odds
• Plenty of tables and examples
 
When you are done with this book, you will understand exactly how to get the best of it at the online betting
exchanges - and will probably never make a bad wager again.

 
In fact, they don’t want you to have it. While you are sitting there a handful of betting exchange pros are going through their daily routine of finagling profitable positions, playing bookie, and working arbitrage angles at the betting exchanges for 6-figure annual incomes. Armed with the knowledge and tactics taught in this course, you can be one of them. Topics covered include:
 
• Complete detailed strategies for trading in the various markets offered at betting exchanges
• Differences between sports books, financial brokers, and betting exchanges – and how to exploit them
• Playing Bookie vs. finding overlays
• Primer on what betting exchanges are and how they work
• Explanation of the markets covered
• Understanding the odds
• Plenty of tables and examples
 
When you are done with this book, you will understand exactly how to get the best of it at the online betting
exchanges - and will probably never make a bad wager again.

• Language: English
• Publisher: Andy Kasch
• Release date: Sep 19, 2019
• ISBN: 9781393993834

Book preview

How to Milk the Betting Exchange Cash Cow

See how a handful of sharpies are making 6-figure incomes wagering on everything from bowling to elections...

Drew Kasch

© 2012-2019 Andrew Kasch

All Rights Reserved.  No part of this publication may be reproduced in any form or by any means, including scanning, photocopying, or otherwise without prior written permission of the copyright holder.

Disclaimer and Terms of Use: The Author and Publisher has strived to be as accurate and complete as possible in the creation of this book, notwithstanding the fact that he does not warrant or represent at any time that the contents within are accurate due to the rapidly changing nature of the Internet. While all attempts have been made to verify information provided in this publication, the Author and Publisher assumes no responsibility for errors, omissions, or contrary interpretation of the subject matter herein. Any perceived slights of specific persons, peoples, or organizations are unintentional. In practical advice books, like anything else in life, there are no guarantees of income made.  This book is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

Online gambling may not be legal where you live so check with your local jurisdiction before pursuing the contents of this book. Problem gamblers should seek professional help and stay away from poker, online or offline.

First Published 2005

Table of Contents

Forward

Introduction

Obstacles to Successful Speculation

The Solution Part 1: Winning Psychology

The Solution Part 2: Betting Exchanges, a Speculator's Paradise

Betting Exchange Orientation

Your Primary Strategy

Playing Bookie and Booking Profits

Winning Intra-game Trading Tactics

An Adventurous Way to Double your Bankroll

Beating the Financial Contracts

Low Risk Arbitrage Angles

Your Betting Exchange Business Plan

Becoming an Official Market Maker

About the Author

Forward

When this book was first written, it was released to a select number of regular players who were part of the community on Intrade.com and Tradesports.com. It was considered ground-breaking material. Most of those who chose to follow the advice herein reaped considerable financial rewards as a result. Tradesports.com has since closed down, as Intrade decided to suspend the sports markets and concentrate on politics, financial markets, and current events. Intrade markets are still regularly quoted by media such as CNBC and Bloomberg, and are considered to be the most accurate predictions of election results. Something about backing polls with a tremendous amount of money improves their prophetic abilities.

This third edition is being edited in 2012 and as of this writing there are four major betting exchanges available to the public:

• Intrade (no sports)

• Betfair (USA residents not allowed)

• Matchbook

• eHorsex

...and a handful of smaller operations as well. But those four big ones listed above are enough. Between them, you have an incredible opportunity to siphon off a lucrative income from a never-ending stream of money that is going back and forth between people who like to wager on the outcome of events. This is true regardless of where you live, and whether or not you are any good at predicting the outcomes yourself. What kind of events are we talking about? Just about anything that makes the news, holds the public interest, and has an uncertain outcome. People are betting on everything these days, including:

-  Sports

-  Politics

-  Weather

-  Television Contests (American Idol, etc.)

-  Entertainment Awards (Oscars, Grammies, etc.)

-  Financial Markets

-  Major Court Case Decisions

-  Foreign Affairs (Including Wars)

-  Pending Legislation

-  Major Construction Projects

-  Developing News Stories

-  Economic Numbers

-  Scientific Discoveries

-  Technology Release Dates

...and anything else that holds the public interest which has an uncertain outcome. Yes, people are really betting on all this stuff! Right now. Lots of people. Lots of money.

Betting exchanges are not like playing against a bookie or a sports book. Here you can put the odds in your favor, because there is no house. All you have to do is find people willing to take slightly the worst of it – which is really, really easy to do. A skilled betting exchange player can operate as a successful speculator, a middleman like a bookie, or even an arbitrager.  (To make the most money do all three.)

This book will teach you how to become a skilled player who can use the betting exchanges as his own personal cash cow. The principles I am about to teach you are timeless. While the betting exchange landscape may change in the future, once you are armed with the proper knowledge and tactics you can use them the rest of your life and always place yourself in favorable risk versus reward situations. So let’s get started...

Introduction

There is probably no challenge more satisfying to meet than that of becoming a successful speculator. I define successful as having reached a point where you can comfortably rely upon an income stream from your speculating. This is the real accomplishment; the one worth pursuing. Anyone can get lucky and cash a few winning bets or a series of profitable trades, because chance plays such a significant role in the outcome of any single proposition. But that role is just a role and not the controlling factor for the successful speculator. His positive results over time can only be attributed to a learned skill.

Games of skill are at the forefront of human interest. They always have been, so there is no reason to think that we will ever consider a good battle of wits anything other than top-shelf entertainment. From tic-tac-toe on the playground to modern day warfare between nations, we are a people consumed by the desire to participate in and observe strategic conflict. Champions are honored and remembered for generations in many different types of games. Likewise, the world's greatest speculators usually become some of the world's wealthiest men, at least for little while.

Some games, like chess, involve pure skill and very little (if any) luck. These are in the minority. Most strategy games that become popular in society have an element of chance involved in the outcome of any particular battle. Backgammon, poker, and professional sports all involve varying degrees of luck in the short run. Perhaps we recognize and appreciate that this element makes a game harder to ultimately conquer. I'm sure you have noticed that those who master these activities appear in the winner's circle far more often than their fair share would seem to warrant. So it goes for the successful speculator as well.

The role of luck involved in speculation is magnified in the eyes of the general public. This is partially due to the pundits who don't understand what moves markets, yet whose job it is to explain market movements. As you are probably aware, the overwhelming majority of new speculators fail miserably. The reasons for this will be discussed early and often in this book, but it all boils down to gambling without an edge. New speculators that are gambling without an edge are quickly consumed by the smaller percentage of professionals and semi-pros who have learned how to play with an edge. Over any statistically significant series of outcomes this is the only possible mathematical result.

The most glaring example of this is in the financial markets. If you have unsuccessfully attempted to trade through a broker account you may not even be aware of all the factors you were up against. One of the players who had an edge when you were trading was your broker. They made money because you opened an account and started trading. Another party that made money because you were trading were the market makers who took the other side (of at least some) of your trades. It's important that you understand these people made money because you traded. That money had to come from somewhere. You lost money. Guess where it came from? This is especially true in markets that have any kind of bid and ask spread, such as options, futures, and forex. (I find it especially amusing that spot forex brokers advertise 5 pip spreads as if that were some sort of advantage to you.)

Some individual speculators using brokers in the financial markets do succeed, despite the formidable obstacles that deter most. These dedicated few become yet another factor working against the new speculator. Yet it does show that it can be done. In fact there are enough successful speculators in the financial markets to conclusively disprove the random walk theory that all market movements are random and cannot statistically be beaten. Anyone reading Jack Schwager's Market Wizards series of books will have the opportunity to get inside the heads of some the best of these financial market champions.

If there is one thing that I hope you and I can agree upon at this point, it's that beating the financial markets with a broker account can be done, but it ain't easy! Those that have done it can be counted among the very best at an extremely difficult game. They are comparable to those who have risen to the top of the professional sports field. Which is an ironic comparison, because the goal of this manual is to teach you how to become a successful speculator in an arena that involves sports wagering. It isn't absolutely necessary that you include sports in your speculations - but you should seriously consider it.

What this book is going to do is introduce you to a wonderful market to speculate in, and show you how to go about doing it successfully. A market where instead of fighting the bid and ask spread you can take advantage of it. One where you can be the market maker instead of competing against him, if you so choose. A diversified market that is chock full of casual gamblers willing to give you the best of it. A market that includes fast-paced intra-day action where profits go to both quick fingers and astute mathematicians.

This place is so much easier than those financial market brokers! Yes, it includes sports as a major part of the daily action. It also includes entertainment contracts such as box office week-end receipts, and political contracts such as election results right up to the concession speech. And of course, financial contracts are traded - including intra-day stock index closings. But why should you care what market you speculate in as long as you can get the best of it?

I am going to show you this utopian market that is void of all the pitfalls of the financial markets broker. I am going to walk you through getting an account set up and show you how to navigate the trading platform. I will teach you how to become fluent in the lingo of the place, and how find propositions where you have an edge. I will show you how to enter and exit positions. I will give you valuable insights into playing all the different types of contracts at all different time frames.

Perhaps most importantly, I will show you how to manage your money so that your success is virtually assured. The end result is, should you decide to follow the advice herein, you will become a successful speculator.

Obstacles to Successful Speculation

The definition of speculation, according to Webster, is the buying, holding, and selling of stocks, commodities, futures, currencies, collectibles, real estate, or any valuable thing to profit from fluctuations in its price as opposed to buying it for use or for income - dividends, rent etc. A speculator buys or sells something in anticipation of profit from a forthcoming change in value of that item.

This is not all that easy to do, nor should it be. If everyone knows that the value of something will be changing soon, then the value of that item tends to change to that level now, because nobody wants to overpay for something that they can buy cheaper shortly. Thus everything in a free market tends to be priced correctly at all times. This is known as the efficient market theory.

A speculator bets on changes in price based on a catalyst such as inside information or a better analysis of the situation than the crowd. A profitable speculator does not need to be correct all, or even most of, the time. He just has to be correct enough of the time that his profits exceed his losses to the point that it is worth his while to speculate. To accomplish this he must enjoy a mathematical edge. That edge can manifest itself in many ways. Some option traders only see 5% to 10% winning trades but still come out ahead overall. Others book a very high percentage of wins but make only fractional gains on individual trades.