Sports trading is like day trading: you can buy or sell at any point during a fast-action, open market full of momentum swings, surges and crashes. However, as a sports trader, you don’t trade an abstract financial instrument, you trade sports markets. The great thing about trading sports instead is that you are trading something that you know and have a feel for already, making sports trading much more accessible, interactive, and entertaining.
How does sports trading actually work? How is it different than sports betting? The really interesting thing about sports markets is how they are organized and how dynamic the trading process is. Unlike sports betting, there is no line or odds. Instead of betting on a team at a certain set price, you make a trade on the rankings ladder or point spread of a live game. You can buy or sell a team, player, or game in the standings or on the point spread of whatever market you choose. This creates elasticity in a market where buyers can become sellers, and sellers turn in to buyers in a dynamic battle of the market place.
Sports betting does not achieve elasticity. Even if you are live betting, you have to choose if you want to accept a set bookie price and then you are stuck with your bet until the end of the game. Sure you can always make another bet later on if you want to adjust your position, but you will basically be drowning yourself in the juice that is created by betting odds. How fun is that?
Sports trading obviously creates freedom and liquidity in the market place. Now lets take a closer look at the different kinds of markets you can participate in when you trade sports.
Team Markets: There is a market for each pro sports team based on the team’s regular season ranking within their league, conference or division. For example, a team will be traded at a certain standing, such as the San Francisco Giants at number three in the National League. If you believe that the Giants are about to move up in the standings, you would want to buy.
All markets are based on trader’s expectations. The market trades a team at the position it expects the team to end up at the end of the season. When Lebron James announced that he was signing with Miami, the Heat jumped up the market from number six in the east to number one – obviously this would have been a great opportunity to make a quick and lucrative trade.
Player Markets: Similar to team markets, player markets are based on standings, however, these are stats rankings such as home runs or passing yards. An example would be to sell Jose Bautista at number one in the MLB home run rankings.
Live Game Markets: This is where sports trading gets really fun. Remember that there are no odds when you trade sports. Sports traders trade the point spread of the game – the difference in points between the two teams that are playing. If the New York Knicks are hosting the LA Lakers, the Lakers would probably be expected to win by about 4 points.
This is reflected as a spread bet at a bookie where the bookie offers a “break even” bet on the spread with odds earning you about ninety percent of your investment. A bet at a bookie is obviously stacked in favor of the bookie so that they are assured to make money. It is also boring considering you are stuck with the bet no matter what happens during the game.
There is action before and during live sports games. There are no restrictions on when or what spread the market trades at. Before the game starts, sports traders are buying and selling the spread, pushing it up and down around minus 4 (-4). It is minus because New York is the home team and the spread represents the score of the home team compared to the away team. This spread will obviously move around a bit before the game as traders play tug-of-war for positioning.
The real action begins when it’s game time. Traders start adjusting their positions as they see how both teams are playing the current match-up. The spread is a completely liquid, free-flowing tradable good, fueled by the traders who influence its path. The market’s expectation of the final spread is based on the pre-game expectation, the current score, how much time is left in the game, and of course, opinions on how the match-up is unfolding.
If the Knicks go on a 12 to 4 run to open the game, traders will buy and push the market up. Let’s say that by the end of the first quarter, the Knicks are up by 12 points. Now, the current spread being traded will likely be anywhere between +2 and +8. Let’s say that New York’s strong first quarter caused buyers to push the spread up to +4 (this is 8 points higher than the spread that was traded before the game). You could now say that the market expects the Knicks to win by 4 points. If you were short in the market (sold the Knicks before the game around -4), you will now have the opportunity to adjust your position and buy because of the change in market expectation.
As you can tell, there is an unlimited number of possible events that can change the flow of a live game and consequentially, market expectation. A few to note: hot streaks, cold streaks, substitutions, foul trouble, changes in strategy, changes in possession, field position, power plays, player attitudes, team confrontations, and injuries. When you trade sports, you have the opportunity to buy or sell at any time during the game and profit from a shift in momentum. These shifts can also be applied to a team’s season and longer term trades can be made.
You can give sports trading a shot at [http://www.TradeTheScore.net]. Open a paper trading account and try it for free. Trade The Score is the first and only company that provides an actual trading platform that streamlines the market place. This is what makes trading sports possible. You can also win prizes and get friend referral bonuses.
Article Source: https://EzineArticles.com/expert/Su_Johnston/719158
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