Arbitrage occurs when the same instrument is traded in separate markets at prices which differ enough to overlap. For example, the Bund futures contract used to trade both in London on LIFFE and also in Germany on the DTB. Although their prices would mostly be the same, there would also be times when they were out of line and this is when arbitrageurs would step in to buy at the lower prices and immediately sell at the higher price. More complex arbitrage opportunities occur between interest rate markets and derivative markets where a relationship can be synthesized and then arbitraged if the conditions are correct.

Sports-Arbitrage opportunities appear everyday between large numbers of sports bookmakers and this enables traders to place risk-free bets. The opportunities are almost endless and always renewing themselves, event after event. Opportunities present themselves on a staggering array of sporting and non-sporting events. Our Sports-Arbitrage MiniCourse shows you clearly and in simple terms how to use a mathematical model to compare various bookmakers' prices, and then structure the bets in such a way as to ensure a guaranteed profit, regardless of the outcome of the event.

When bookmakers compile their odds, they are merely reflecting their opinion of how an event is likely to unfold and/or where the majority of its customers are likely to want to place their money. The only certainty they have is that they will structure their prices to ensure that the percentages are in their favour. Whilst there are times when various bookmakers' odds are the same on a particular event, there are many occasions when their views and, therefore, the odds they offer are very different.

These differences give rise to arbitrage opportunities and with the application of a simple mathematical model and a little search time, anyone can uncover and profit from them.