#预测市场 introduces a method to bet on sports events in prediction markets.
Betting on sports events is similar to playing options.
Simply betting on which team will win is very difficult to profit from. Because the betting price for strong teams is high, and even if you win, you won't earn much.
There is a way to play that is similar to spread trading in options.
Specifically, it goes as follows:
Team A competes against Team B. Team A is the strong team. The market on PolyMarket shows that Team A winning is $0.8.
This means that betting on Team A requires a payment of $0.8, and if Team A indeed wins, you can only gain a profit of $0.2, which is too low.
There is another type of market where Team A's score is compared to Team B's after deducting N points, at which point the probabilities are roughly 5:5.
This is called a point spread. The result after the strong team gives points is compared to the weak team.
Friends who have played sports betting must be familiar with this type of play.
At this point, you can combine the win/loss bets with the point spread betting.
For example, I can establish the following positions.
Position X: bet on Team A winning, with a cost of $0.8.
Position Y: bet that Team B's score is greater than Team A's score minus N points, with a cost of $0.5.
Based on the match results, my gains and losses are as follows:
(1) Team B wins. Position X loses $0.8, Position Y wins $0.5. The net loss is $0.3.
(2) Team A wins, but Team A's score minus N points is less than Team B's score. Position X wins $0.2, Position Y wins $0.5. A total profit of $0.7.
(3) Team A's score minus N points is greater than Team B's score. Position X wins $0.2, Position Y loses $0.5. The net loss is $0.3.
So, in cases (1) and (3), I lose $0.3.
In case (2), I earn $0.7.
The profit and loss ratio is 7:3, which is quite high.
Then, through analysis, you can determine whether the probability of situation (2) occurring is high or not.
Especially since the probability of situation (1) occurring is very low, because the market predicts that the weak team has only a 20% chance of winning. Team A has a significant lead.
Through analysis, if you find that the probability of Team B winning is almost nonexistent, you can rule out situation (1). This way, you can gain an advantage in probability.
Betting on sports events is similar to playing options.
Simply betting on which team will win is very difficult to profit from. Because the betting price for strong teams is high, and even if you win, you won't earn much.
There is a way to play that is similar to spread trading in options.
Specifically, it goes as follows:
Team A competes against Team B. Team A is the strong team. The market on PolyMarket shows that Team A winning is $0.8.
This means that betting on Team A requires a payment of $0.8, and if Team A indeed wins, you can only gain a profit of $0.2, which is too low.
There is another type of market where Team A's score is compared to Team B's after deducting N points, at which point the probabilities are roughly 5:5.
This is called a point spread. The result after the strong team gives points is compared to the weak team.
Friends who have played sports betting must be familiar with this type of play.
At this point, you can combine the win/loss bets with the point spread betting.
For example, I can establish the following positions.
Position X: bet on Team A winning, with a cost of $0.8.
Position Y: bet that Team B's score is greater than Team A's score minus N points, with a cost of $0.5.
Based on the match results, my gains and losses are as follows:
(1) Team B wins. Position X loses $0.8, Position Y wins $0.5. The net loss is $0.3.
(2) Team A wins, but Team A's score minus N points is less than Team B's score. Position X wins $0.2, Position Y wins $0.5. A total profit of $0.7.
(3) Team A's score minus N points is greater than Team B's score. Position X wins $0.2, Position Y loses $0.5. The net loss is $0.3.
So, in cases (1) and (3), I lose $0.3.
In case (2), I earn $0.7.
The profit and loss ratio is 7:3, which is quite high.
Then, through analysis, you can determine whether the probability of situation (2) occurring is high or not.
Especially since the probability of situation (1) occurring is very low, because the market predicts that the weak team has only a 20% chance of winning. Team A has a significant lead.
Through analysis, if you find that the probability of Team B winning is almost nonexistent, you can rule out situation (1). This way, you can gain an advantage in probability.