ARBITRAGE CALCULATOR

1. What is an Arbitrage Calculator?

An arbitrage calculator is a piece of betting software that allows individuals to identify profitable betting opportunities by comparing different sportsbooks' odds on the same event. The calculator uses the variance between the two sportsbooks' odds to calculate how much you must bet on each to guarantee a profit.

By working out the optimal amount to place both on your main and hedge bet to return a profit regardless of the outcome, arbitrage calculators simplify arbitrage betting and help take the 'gamble' away from sports gambling.

2. How to Use an Arbitrage Calculator

To use an arbitrage calculator effectively, follow these five steps:

1. Pick out two different sportsbooks offering odds for the same event but on opposing outcomes.
   
   
2. Enter these odds into the arbitrage calculator - e.g. your 'Original Bet' may be for team 1 to win the game, and your 'Hedge Bet' for team 2 to win the game.
   
   
3. Enter the amount you wish to stake on your original bet.
   
   
4. Note: The calculator will display how much you must stake on the hedge bet to receive the displayed profit (if this starts with a '-' symbol, it is not a profitable arbitrage opportunity).
   
   
5. Place your bets accordingly in both sportsbooks and await the conclusion of the event to receive your profits.

3. Worked Example

To understand how this process of using an arbitrage calculator would work in a real-world context, we've added an example below:

1. The Green Bay Packers are playing the Chicago Bears and you find the following odds from two different sportsbooks: Packers to win -385 (Draftkings), Bears to win +420 (Fanduel).
   
   
2. You enter the odds into the calculator, entering -385 as your original bet and +420 as your hedge bet.
   
   
3. You wish to stake $100 on your original bet (Packers to win) so you type '100' into the 'Original Bet' cell.
   
   
4. The calculator now tells you that if you place $413 on your hedge bet, at the given odds you will make a total profit of $7.27, regardless of the outcome of the game.
   
   
5. Now you've calculated this, you go ahead and place your above selections with Draftkings and Fanduel and await the game's end to receive your winnings.

4. How Does an Arbitrage Calculator Work?

You can find out how to easily use an arbitrage calculator above, but in case you're curious about how the calculator actually works, we've outlined its four key stages below:

1. Analyses Variance: The calculator's formula will calculate the variance (difference) between the two sportsbooks' odds.
   
   
2. Calculates Percentage of Profit: It then works out if there is sufficient variance between the two odds to earn a potential profit, and calculates the % profit of the original bet.
   
   
3. Calculates Specific Profit: Now the percentage profit has been calculated, it will now calculate the specific amount of profit the bettor would receive from these odds. It does this by multiplying the percentage profit by the stake.
   
   
4. Displays Optimal Hedge Bet: The optimal amount you should place on your hedge bet in order to achieve the specific profit is now displayed.

5. Why Do Different Sportsbooks Offer Different Odds?

Knowing how to use an arbitrage calculator can give you a valuable edge over sportsbooks. But understanding why some sportsbooks offer different odds on events in the first place can help you to identify opportunities quicker and master arb betting.

Here are the top five reasons different sportsbooks offer different odds for events:

• Varying Opinions: Different sportsbooks have different experts working for them and algorithms in place. This can lead to odds being adjusted differently due to varying opinions and calculations.
  
  
• Customer Pull: Another common reason is to attract and maintain customers. If a sportsbook's odds on an event are more favourable than their competitors', they are generally more likely to attract greater bets.

• Wagering Popularity: Sportsbooks may adjust their odds based on the amount of money that has been wagered on each outcome. If a very high number of bettors are placing bets on one team to win, a sportsbook may adjust their odds to spread risk and create a 'balanced book'.
  
  
• Recent Updates: Some sportsbooks may be more reactive than others, and know about market or event updates faster (such as injuries, transfers or even a change in weather conditions). As a result, some may adjust their odds faster.
  
  
• Different Profit Margins: Not all sportsbooks have the same profit margins. Some may have smaller margins and so will be willing to offer more favorable odds to bettors. Also known as the "juice" or "vig" you can calculate these different sportsbook profit margins using a vig calculator.

6. Arbitrage Betting vs Hedging: What's the difference?

Arbitrage betting involves making use of price differences in a market to guarantee a profit, typically sports betting. Bettors place multiple bets on all possible outcomes of an event, ensuring a positive return regardless of the outcome.

Hedging, on the other hand, is a risk management strategy where a bettor places additional bets to minimize potential losses from their original bet or secure a certain level of profit.

While hedging does in fact play a role within arbitrage betting (making the arb calculator and hedge calculator's core functionalities the same), as a process it can also exist in a range of other concepts, like matched betting, trading and even investing.

7. 2 Way vs 3 Way Arbitrage Calculator: What's the Difference?

A 2 way arbitrage betting calculator is designed for scenarios involving two possible outcomes, commonly used in sports betting where there are only two potential results, such as an NFL game where one team must win the game.

On the other hand, a 3 way arbitrage betting calculator is tailored for events with three possible outcomes, such as soccer matches where a team can win, lose, or draw.

These tools can even extend to 4 way and 5 way arbitrage calculators (though less common). However, in order to calculate arbitrage quickly and simply, and to maximize potential profits over the long term, 2 way and 3 way arbitrage calculators are often preferred (both of which our calculator offers).

8. What are Palpable Errors in Arbitrage Betting?

A palpable error in arbitrage betting is a term used to describe a mistake or error made by a sportsbook or in setting the odds or lines for a particular sporting event. This error is typically so obvious and significant that it becomes clear to both the sportsbook and the bettors that there is a problem with the odds.

When a palpable error occurs, the sportsbook may have the option to void the bets that were placed on the erroneous odds. This is often done to protect the sportsbook from significant financial losses that could result from the error.

In some cases, although rare, sportsbooks may choose to honor bets placed at erroneous odds to maintain customer trust and goodwill, but this is not always the case. The decision to void or honor bets in the event of a palpable error is typically at the discretion of the sportsbook.

Palpable errors, also known as palps, can be easily avoided by taking note of the rating. A 100-106% rating is a common arb opportunity, however, ratings above 106% could very well be a palpable error. 110% and higher is most definitely a palpable error and should be avoided.

9. 5 Tips When Using an Arbitrage Calculator

Using an arbitrage calculator effectively is simple once you know a few simple steps. But applying these 5 key tips can help you upgrade the profits you make when arb betting and make sure you don't fall victim to sportsbook account limits:

1. Grasp the Calculator: Get to grips with how the calculator works. Understanding features like odds formats and a the 3-way hedge option can help ensure you can calculate profits rapidly and don't miss valuable arbitrage opportunities.
   
   
2. Follow Normal Betting Activity: Arbitrage betting gives the bettor an edge over sportsbooks, and so they're not a big fan of it (though it's still perfectly legal). So follow a few simple tips to make sure your betting activity isn't flagged as usual and to prevent your account from being limited.dutch mat
   
   
3. Use Alongside Other Tools: Though the arbitrage betting calculator is a powerful profit-building tool, using it alongside other tools such as a no-vig calculator and Dutch Matcher can help you get the very most out of it and maximize potential profits.
   
   
   
   
   
4. Track Your Profits: By keeping track of your profits when arbitrage betting, you can paint a clear picture of the most and least profitable arb opportunities. This can be carried out basically using an excel sheet, but making use of specialised tools like a profit tracker can help take your betting strategy to the next level.
   
   
5. Explore Alternatives: Arbitrage betting can build major profits in the long term. But doing it alongside other, risk-free betting activities can help you earn even greater wins over a shorter period of time. Explore activities like matched betting with the help of a free bet conversion calculator (AKA free bet converter). This method can help you take advantage of sportsbook promos and add $1,000s into your pot every month, risk-free and perfectly legal.

10. How to Make Money Using an Arbitrage Betting Calculator in 4 Steps

Knowing what an arbitrage calculator does is great, but at the end of the day, the main reason you're going to want to harness this handy bit of software is to make money.

So, let us show you in four easy steps how you can do exactly that.

Step 1: Research & Sign Up for Sportsbooks

The very first step you should follow before putting your calculator to use is to research and sign up for sportsbooks. But it's not just as simple as signing up for the first betting site you lay eyes on, there are some things to look out for.

First of all, you should check out the sportsbooks available in your state. Not all sportsbooks have a presecne in every state where sports betting is legal. After that, narrowing it down to regulated sportsbooks (and weeding out the offshore ones) can give you another layer of protection and guarantee.

If you'd like to go a step further, you could research the most trusted US sportsbooks, as well as those which tend to offer the most favourable arbitrage opportunities. But at ProfitDuel, save our members all the time and effort of doing that with our Dutch Matcher tool. 

Step 2: Find Arbitrage Opportunities

To spot profitable arbitrage opportunities, it's essential to regularly monitor multiple sportsbooks for discrepancies in odds.

But "shopping" for odds discrepancies over multiple sportsbooks can be time-consuming and even frustrating if you're doing it all yourself. Sometimes you will discover a difference in the odds only to find out that you have not reacted quickly enough to place your bet. 

The ProfitDuel Dutch Matcher simplifies the process by scanning for arbitrage opportunities, 365 days a year. Arbitrage bets can easily be identified by the rating. Any rating higher than 100% is an arbitrage bet.

Step 3: Calculate Stakes & Profit

Now you've identified a profitable arb opportunity, it's time to bring your arbitrage betting calculator into use to check how much you should stake on each bet to get your intended profit.

Using an arbitrage calculator like the one at the top of this page, which offers the option to rapidly enter odds, calculate potential profits and suggest optimal stakes rapidly is recommended. 

Step 4: Place Bet

Now you've signed up to sportsbooks, browsed arb opportunities and calculated your potential profit, all that is left to do is place your bet and await your winnings.

Where doing this by yourself can be a time-consuming process - switching from account-to-account and tracking bets manually - using ProfitDuel we cover all of this for you in one easy-to-use platform.

This makes building risk-free profits with arbitrage betting quicker, easier and more exciting than ever before.

So go on, discover how the ProfitDuel platform can allow you to level-up your winnings with arbitrage betting with 50% off your first month of membership.