Is This Free Money, Or Am I Being Stupid?

[Bingley Bloke]

I just glanced at the live prices on Binarybet.com for their FTSE Daily 'Tunnel' bets in the 'Exotics' section and saw the following decimal odds for today's FTSE to trade within a specified range:

| FTSE to keep in range -20 to +20 | Back: 6.2 | Lay: 13.5 |

If I place a £10 bet to Back the FTSE to keep in range -20 to +20 and it wins I'll get back £62

If I place a £10 bet to Lay the FTSE to keep in range -20 to +20 and it wins I'll get back £135

Here's the interesting bit:

If I place a £10 Back bet and a £10 Lay bet the total outlay will be £20, but the minimum I can get back is £62, so I'm guaranteed a profit of at least £42 whatever happens!

Maybe Binarybet.com has a mechanism that prevents you from Backing and Laying simultaneously, but what's to stop me having two accounts, or if that's not allowed, me and a partner getting together and one of us Backing and one of us Laying and then sharing our profits?

The only catches I can imagine might exist are as follows:

1: You are paid out according to the odds being quoted for the bet at the time it is settled, not the odds that were quoted for the bet at the time it was made.

or,

2: A back bet would fail as soon as the FTSE trades outside the specified range but the Lay bet doesn't win unless the FTSE is still outside the specified range at the day's close.

Does anyone have experience of this?

Edited May 10, 2006 by Bingley Bloke

[jackoms]

Well I looked at it for ages trying to work out how the lays work, but even with an example in the help I can't figure it out! The lays arn't as simple as you think, see http://www.binarybet.com/content/sites/bin...xample_spo.html

£649.35 lay at 1.54 gives you either +£649.35 or -£350.65

I don't understand! But anyway, I know for sure that it isn't free money - these sites are very, very careful about avoiding giving people free money - and if they do mess up, they'll cancel your bets even if you've closed them, and withdraw the profits from your account. Looking at the other decimal bets, however, I think its unlikely they'd get it wrong in every market they're offering.

Nice try though

Edited May 10, 2006 by jackoms

[Bingley Bloke]

Yeah, I've got it now – Being Stupid it is! The 'Lay' bets work the other way round!! The only way to get a genuine guaranteed profit would be with two different 'Back' bets, the collective cost of which was less than the winnings from either one. Sometimes opportunities like this come up when two different bookies are offering different odds on the same event, but it's a lot of work finding them.

[the_duke_of_hazzard]

Yeah, I've got it now – Being Stupid it is! The 'Lay' bets work the other way round!! The only way to get a genuine guaranteed profit would be with two different 'Back' bets, the collective cost of which was less than the winnings from either one. Sometimes opportunities like this come up when two different bookies are offering different odds on the same event, but it's a lot of work finding them.

A friend of mine made £0.5m last year doing just that. He'll make more this year.

[Perfectionist]

There is always somebody who says he has a "mate" who got rich doing this or that !!

Dude !! Tell your friend to come on this forum and post his investments !!

I'd gladly pay him a hefty percentage of my £500,000 profit !!

[RobertPaulson]

if you lay you are simply fronting for another bet (backing). They easy way to think about it is punters back, bookies lay, if you work out the over-round (i.e. the odds on the all the possible options for the bet, say 110%) then you get the bookies profit (always assuming they are good enough to hedge themselves properly). www.betfair.com has a good tutorial if you want to delve further.

[the_duke_of_hazzard]

There is always somebody who says he has a "mate" who got rich doing this or that !!

Dude !! Tell your friend to come on this forum and post his investments !!

I'd gladly pay him a hefty percentage of my £500,000 profit !!

He turns over £1m a day betting on exchanges. He reduces risk according to algorithms he's written. He's a mathematician who was formerly a quant and is a remarkably good programmer.

He is therefore effectively *guaranteed* to make money every day, provided there are windows of opportunity for arbitrage. And there are.

He could make more if he turned up the risk rating, but he doesn't. He just leaves the machines on. There are risks, but they are inherent to gambling on the web with large sums (eg bookie doesn't pay up).

I offered him money to invest. He didn't want/need it.

His PC emits a "kerching" noise when the program makes money on a deal. Having lunch with him in his office is *very* annoying, as you literally hear him make money while doing nothing.

[dnd]

I thnk 'natural selection' needs a good long reassessment

"Arbitrage using bookmakers"

http://en.wikipedia.org/wiki/Arbitrage_betting

"A typical arb is around 2%, often less, however 4%-5% are also normal and during some special events they might reach 20%"

Edited May 11, 2006 by dnd

[Perfectionist]

He turns over £1m a day betting on exchanges. He reduces risk according to algorithms he's written. He's a mathematician who was formerly a quant and is a remarkably good programmer.

He is therefore effectively *guaranteed* to make money every day, provided there are windows of opportunity for arbitrage. And there are.

He could make more if he turned up the risk rating, but he doesn't. He just leaves the machines on. There are risks, but they are inherent to gambling on the web with large sums (eg bookie doesn't pay up).

I offered him money to invest. He didn't want/need it.

His PC emits a "kerching" noise when the program makes money on a deal. Having lunch with him in his office is *very* annoying, as you literally hear him make money while doing nothing.

This friend of yours ..... it seems he is without doubt, imaginary !!

There are countless people in the world who are smarter than your friend, who have the immense capital of major investment houses backed by computing resources which would put NASA to shame ...... still nobody has cracked the secret to making/programming a machine/system that makes money like a printing machine !!

Next you'll be saying you have a "mate" called Indiana who has found the Holy Grail and Lost Ark !!

[Guest boredwaiting]

Next you'll be saying you have a "mate" called Indiana who has found the Holy Grail and Lost Ark !!

That's my mate - he just came back from an expedition - you wouldn't believe the traps those ancient mayans used to have... He had to dodge arrows and then the big stone ball chased him down the corridor... He was lucky to get out alive.

He's a good friend so no taking the mickey....

[the_duke_of_hazzard]

This friend of yours ..... it seems he is without doubt, imaginary !!

There are countless people in the world who are smarter than your friend, who have the immense capital of major investment houses backed by computing resources which would put NASA to shame ...... still nobody has cracked the secret to making/programming a machine/system that makes money like a printing machine !!

Next you'll be saying you have a "mate" called Indiana who has found the Holy Grail and Lost Ark !!

When he was first approached about this by a trader (who made 350K in a year doing it by hand), it took about 3 months to persuade him it was worth trying to automate. He happened to have done a lot of the maths when looking at betting exchanges when working with my company.

He now figures he only has a limited amount of time before the holes close (or bigger boys do catch on) so he's looking at moving into other areas for analysis, possibly to take positions etc.. He has in no sense cracked the secret to printing money, he's just found a gap. Others have too, it's just that his programs are more efficient and aggressive. He has a fortuitous set of skills for the problem he has. He runs a registered company and employs two people, but he doesn't want publicity, for obvious reasons.

I've done small arbs myself on sportsbooks, but found it to be much too hard work and too much risk, and didn't have the maths to develop a method for reducing risk.

You seem to overestimate the organisational skills and knowledge of the investment houses. In general, they are very smart at exploiting known areas, but they make bungled decisions and won't get involved in new areas just like every other big institution.

I haven't got a Lost Ark, but my mate has a Found Ark...

[thefruits]

Hey great work.. if only I could understand exactly how he makes the money ? Could you please put down in laymans terms how he actually makes the money ? I'd love to get some of my hard earned money back off the bookies but the 4 horse in the 3.30 at kempton keeps on letting me down !

Cheers,

TF

[RobertPaulson]

He now figures he only has a limited amount of time before the holes close (or bigger boys do catch on) so he's looking at moving into other areas for analysis, possibly to take positions etc.. He has in no sense cracked the secret to printing money, he's just found a gap. Others have too, it's just that his programs are more efficient and aggressive. He has a fortuitous set of skills for the problem he has. He runs a registered company and employs two people, but he doesn't want publicity, for obvious reasons.

I've done small arbs myself on sportsbooks, but found it to be much too hard work and too much risk, and didn't have the maths to develop a method for reducing risk.

Sounds just like a mini version of LTCM on sport betting websites! Quite a few people have built arb-bots which continually scrape the websites of spreadbetting/online betting firms looking for arbs and then automatically execute. There is money in it, but the risk is phenomenal, if your connection fails at the wrong moment you end up going naked on one position and can lose your entire years P&L due to the leverage you need to turn any sort of a reasonable profit. The best analogy I have heard for derivatives arbitrage trading makes it akin to running across a busy motorway to pick up pennies.

Eventually the margins get squeezed as other people wise up and then the temptation is to go taking positions or looking for convergence/divergence 'dirty' arbitrages (where you have basis risk due to the two/three/whatever instruments not being perfectly matched or off setting), at which point you quite soon find out that the market can stay irrational a lot longer than you can stay solvent!

Good luck to your mate though

[Flick]

I had a massive arb not so long ago. The offer is still open but has changed from a max £1000 to £100 on binary bets only - I havent used binary bets so maybe someone here can enlighten us.

This is how it worked previously (non binary bets) :Set up 2 accounts at cityindex - they are doing a double your profits promotion on new accounts - up to 1k.

simultaneously place an up bet & a down bet with the two accounts on a volatile index. when close to the 1k mark, close both bets. This leaves you around evens minus the spread - they then double the winning one.

Shame they changed the rules

Casinos & bookies offer big chances for 'free money' with their sign up bonuses - though these are getting much tighter now, with bigger playthroughs to cash out the winnings.

For anyone thats interested, theres a few docs on bonus-bagging with blackjack on www.cashbaggers.com - but they are a bit out of date now. Theres also a lot on arbing with free bookmaker bonuses on MSE forums.

[the_duke_of_hazzard]

Sounds just like a mini version of LTCM on sport betting websites! Quite a few people have built arb-bots which continually scrape the websites of spreadbetting/online betting firms looking for arbs and then automatically execute. There is money in it, but the risk is phenomenal, if your connection fails at the wrong moment you end up going naked on one position and can lose your entire years P&L due to the leverage you need to turn any sort of a reasonable profit. The best analogy I have heard for derivatives arbitrage trading makes it akin to running across a busy motorway to pick up pennies.

Eventually the margins get squeezed as other people wise up and then the temptation is to go taking positions or looking for convergence/divergence 'dirty' arbitrages (where you have basis risk due to the two/three/whatever instruments not being perfectly matched or off setting), at which point you quite soon find out that the market can stay irrational a lot longer than you can stay solvent!

Good luck to your mate though

Risk is minimised through mathematical models he's developed which are obviously proprietary. That's the trick. Also, he's an expert programmer, so his bots are faster than all the others. He's also in cahoots with a former bookie/trader who has the contacts required to seal large bets quickly.

The free money offers are too much work for too little benefit these days.

Re: freebets

William Hill had a bug that we exposed which meant that your credit card could be entered with spaces at different places - voila, a new account and another freebet. We had about £2160 in 216 accounts before they told us to desist.

Hey great work.. if only I could understand exactly how he makes the money ? Could you please put down in laymans terms how he actually makes the money ? I'd love to get some of my hard earned money back off the bookies but the 4 horse in the 3.30 at kempton keeps on letting me down !

Cheers,

TF

In layman's terms: he makes the money by being much much smarter than you or me. If it were that easy I'd be doing it myself.

Stop gambling, especially on horses - it's a mug's game and riddled with corruption.

[Flick]

The free money offers are too much work for too little benefit these days.

Re: freebets

William Hill had a bug that we exposed which meant that your credit card could be entered with spaces at different places - voila, a new account and another freebet. We had about £2160 in 216 accounts before they told us to desist.

yes they've had their heyday - i had about 9k out of them last year, but since the turn of the year, its been really hard to find decent offers. (at least ones I'm not already a member of several times over )

I guess you didnt manage to get that 2k out then?