Discussing the article: "Triangular arbitrage with predictions"

MetaQuotes 2024.05.21 12:49

Check out the new article: Triangular arbitrage with predictions.

This article simplifies triangular arbitrage, showing you how to use predictions and specialized software to trade currencies smarter, even if you're new to the market. Ready to trade with expertise?

Arbitrage is very curious, it's been prohibited from the bookies of sports betting. Imagine you have some winning odds of 1.25 for Real Madrid to win the champions 2024, and Borussia Dortmund has 3.60 odds, that means Madrid has 100/1.25 = 80 % of probabilities to win and Borussia 27.7 % to win. If you add those two, you have 107.7%, that is because bookies want to win money and that over 100 % is their commission. But, imagine you find Bookie number 2 and hey offer odds for Borussia of 19% probabilities to win, odds of 5.26. Then you could bet in Bookie number 1 to Real Madrid and Bookie number 2 for Borussia, and if you bet the appropriate quantity to each team, you will win money in the game, because both add less than 100%. This is a simple way to explain why its prohibited in sports betting and what is arbitrage.

Imagine you are a "legal" person and you don't want to have your sports account closed by doing arbitrage, you know that even if you bet for Madrid, you could do "legal" arbitrage if you waited for minute 70' of the game if draw or wait to Real Madrid to score to have those odds for Borussia and have a win win... this seams a bit risky, but here is where we can take advantage of Deep Learning, we know Real Madrid is gonna score, so you are gonna have those odds with a 98 % of probabilities (we know this with cointegration between the predictions and the real values). This is what's new with Deep Learning and Arbitrage.