What is odds?
In order to understand the secret behind each game, we must first understand what the odds are.
Let’s look at an example.
Betting platform gave a German-to-Mexico odds.
Germany is a traditional strong team, so the German win odds is relatively low.(1.24 to 1 odds, which means one could win $124 if one were to bet $100)
If it is a draw, the odds is 4.8, which means one could win $480 if one were to bet $100
If Mexico really wins, then the odds is 8.7. You can now understand that if one were to bet $100 that Mexico would win, he would get $870.
Then we can use odds to calculate the return rate
The return rate is 89%.
How is this return rate calculated?
First, if we want to get back $100, how many should we spend?
We first consider if we bet on German wins, how much do we need to bet ?
We know that Germany’s odds of winning are 1.42.
So if you want to get back $100, the amount you need to bet should be 100 divided by 1.24, which is calculated to be $80.65.
However, betting just on the German win is not okay because there are other situations.
If it is a draw, how much money do you need to bet in order to get back $100?
The odds is 4.8, so you should bet 100/4.8, which is equal to $20.83.
Then, there’s another situation that Mexico wins.
The odds is relatively high(8.7), so you can just bet 100/8.7, which is $11.5.
If you want to make sure you can get back $100, how much money do you have to spend in all three places?
We’ll add them all together, and the answer is about $113.
So the return rate should be 100 devided by 113, and this number is about 88.5%.
The rate is always lower than 100% becuase it represents profit to the betting platform in the event of a balanced/even book.
Winning method 1
After we understand the odds, I will tell you now how to win it.
We can first discuss this issue from the perspective of probability.
First, the market gives a probability judgment. and you may also have your own probability judgment.
We assume that your personal judgment is better than the market, because you can only make money if you judge it better than the market.
The market believes that the probability of victory in Germany in the end is about 80.65 in 113.
So the probability of victory in Germany is actually 80.65/113, which is 71.4%.
We know that there are 20.83 in 113 which is draw, and the result of 20.83/113 is 18.43%.
In other words, the market believes that there is a 18.4% probability that it is a draw.
So what if Mexico wins the market?
Mexico has a 11.5 at 113, about 10.2%. The market believes that the probability of Mexico winning is about 1/10
Then you personally need to have a judgment.
For example, after a long period of research, you discovered that Germany is very strong.
But Mexico is not weak, too.
So you think that the probability of German’ victory is not so high.
You think that there is only 50% of the probability that German will win and there is 30% that it will be a draw.
The probability of Mexico winning is 20%
You are different from the market, How do you think about buying this time?
The probability that the market thinks about a German victory is 71.4%, compared to what you think, which is only 50%.
Obviously, the market has overestimated this, so you shouldn’t buy it.
Well, you think there is a 30% chance of a draw, but the market believes that it’s 18.4%, so the market is undervalued. You should buy it flat.
You think the probability of Mexico winning is 20%, but the market thinks it’s only 10%.
So, We should buy Mexico to win or a draw.
In terms of expectations, how much reply can you get?
Let’s look at the 30% probability when the game is a draw, so at this time we count 30%×$100×4.8, which is $144.
So if you are flat, you can earn 44 dollars from expectations.
Expectation is the average of the statistics
However, there is still a chance that Germany still slaughter Mexico and you will lose your money.
Is there any way that no matter what the outcome is, we will definitely be able to win?
This involves the third way, which is hedging.
A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. Hedging is a common method in the financial market. Once there is a profit opportunity, there will be a lot of money coming in.
If we find an opportunity to buy the hedge, no matter what the result is, we will definitely make money.
For example, in addition to the betting platforms we mentioned above, there is also another one who gave different odds.
It says Germany wins odds is 1.5. (v.s. 1.42)
If it is a draw, it will be 4.2. (v.s. 4.8)
If Mexico wins, the odds is 7.5. (v.s. 8.7)
Why is this higher than that the previous one?
The reason for this is that they or their customers have different beliefs, and they will adjust the ratio accordingly.
So we can buy the game like this:
Buy draw and Mexico win in the first market and buy Germany wins in the second one.
We will than be sure to make money.
For example, if we want to get back $100,
We want to buy $100 divided by 4.8 and $100 divided by 8.7 in the first market.
Then, we buy $100 divided by 4.8 in the second market, which is equal to $66.67.
Well, how much money do we need to spend after we add all of them?
A total of 98.99 yuan
You only spent $98.99 and it your final income is $100.