TradeSports

[DeucesUp]

I think TradeSports system is very confusing to a lot of people but it sounds like you've got it.

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Someone sets a line for an event. You can either Buy that event or Sell that event. To sell the event, do you actually have to buy it first, or is it like a short sell? The price for the event will be between 0 and 100. There is a fee to buy or sell, like a stock trading commission.

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Correct. And its a short-sell. You don't have to own it first, this is how you bet "NO" on an event - you sell "YES" contracts that you DON'T own. The only difference from stock short-seling is that the proceeds ($'s) from the sell don't go into you account until the contract expires.

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As the line is set for the event, it won't move, but the price of it could move, depending on how many buyers and sellers there are. While a normal sportsbook moves the line itself, this exchange book moves the price instead. This gives an opportunity for someone to buy and sell the same event before it actually occurs and make a profit.

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Correct. However when a line moves at other places, they often will start trading contracts at the new spread as well as the old. They will trade simultaneously and independently. Indeed someone can start trading contracts at any spread for a game and it is not unusual to have the option of buying/selling contracts at 4 or more different spreads on the same game. This occasionally creates middling opportunites, but in my experience, not that often. Generally the market is pretty efficient.

Buying and selling on price moves before the event occurs is what TradeSports really excels at. You can do this at other books or exchanges by "buying back" the other side but it requires that you have enough money for bets on both sides and you end up locking up your bank roll until the event occurs. If you want to bet on events far in the future and profit from the swings in public opinion, TradeSports is great.

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Either way, the event will "expire" at some point in time. If the event occurs, then it is settled at 100. If you bought it, you'll basically trade it in at the price of 100. If you sold it, you have to "buy it back" at 100 to settle your account. If the event doesn't occur, then it goes off at 0, and the buyers lose, the sellers win. From the DeucesUp post, you get charged a fee for settling this as well, as if it were another stock trade.

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Correct - where each contract at 100 is actually worth $10.

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Now, what is up with the way they do fees? I get that you're paying fees for every transaction (unless you're the price setter), but it's .4% on everything? So if you buy at 8, you're paying .4% at 8, but you'll settle at 100 if you win, and it's .4% of 100? If you lose, there's no fee?

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As previously pointed out, it's a flat fee of $0.04 per contract and it's win or lose. Before you ask, yes, you are charged a fee even on a contract which is worth $0. I used a percentage above because a previous post suggested that the fees were only 0.4% and I wanted to demonstrate that this was wrong and also compare to the other exchanges that DO use a %age based fee system.

This is also why TradeSports can get quite expensive. See my example in my previous post where you pay around 10% of your bet on longshots and 10% of your winnings on heavy favorites.

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Yes I think that helps. So, if I wanted to wager several hundreds of dollars on one event, I'd need to buy up multiple contracts. They might not all have the same price, depending on who is willing to sell these contracts, right? But it's 4 cents per contract period.

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Correct.

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And what are the other similar exchange sites? Do they all work in the same manner?

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The only ones I know of are:

BetFair which I've never used and know nothing about.
Mansion - charges 1% on winners only
Matchbook - charges 2% on winners only

for comparison from my previous post, TradeSports charges roughly 1.6% win-or-lose.

The software at Mansion and Matchbook make them operate much more like traditional sports books, and in most peoples opinion much simplier. Instead of $10 contracts priced at 0-100 and buying and short-selling, they simply use dollars and when you place a bet of, for example, $112 Sea-3.5-112, the software automatically puts up an offer of $100 Car+3.5+112 for somebody else to take. Internally they work the same way, but the user interface operates quite differently.

[sygamel]

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It's not a percentage. It's 4 cents per contract. You buy or sell a contract at 20, 50, or 75, it's 4 cents per contract to settle.

Each contract works in increments of 10 dollars. If you buy one contract at 40, you are risking $4.00 to win $6.00. The fees mean you are risking $4.04 to win $5.96.

If you set the price of the contract and someone else takes your price, you pay no other fees. If instead you agree to pay someone elses price, whether it's to buy or sell, you pay an extra 4 cents per contract (2 cents if the contract is trading in the range of 0-5 or 95-100).

Does that help?

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Actually it's $4.08 to win $5.92, or $6.08 to win $3.92 depending on which end you take. Assuming 40% are the real odds for an event to occur, Tradesports' odds are very similar to Pinnacle:

608/392 = -155
408/598 = +145

This assumes of course you're making a transaction w/ another trader at a number you like, and not with TS itself (they offer their own contracts).