Definition
Arbitrage (arb) locks a positive payout by betting all outcomes of an event at different books where prices disagree. Requires the sum of implied probabilities across books to be below 100%. Profit = 1 - (sum of implied probabilities). Arbs are rare, small, and close fast as books sync prices. Requires accounts at multiple books, fast execution, and awareness that books will limit or close accounts identified as arbers. Best found in player props and game props where pricing is less efficient.
Worked Example
Book A: Team X +105 (implied 48.78%). Book B: Team Y +102 (implied 49.51%). Sum = 98.29%. Arb exists. To lock the same profit regardless of outcome, size each stake to its own side's implied probability: stake on X = 2000 × (48.78 ÷ 98.29) = $993; stake on Y = 2000 × (49.51 ÷ 98.29) = $1,007. X wins: profit = $993 × 1.05 = $1,042.65, plus the $993 stake back = $2,035.65 total against $2,000 risked. Y wins: profit = $1,007 × 1.02 = $1,027.14, plus the $1,007 stake back = $2,034.14 total against $2,000 risked. Profit ≈ $35 either way.
Why It Matters
Arbing can create a locked payout but still carries account-limit and execution risk. More useful as a line-shopping strategy - find the best price before the arb closes rather than trying to execute both sides simultaneously.
