At Auburn University I studied business finance, economics classes in particular I found the most interesting. It’s where I really began to hone in on how markets work. For the first time in my life I found school very interesting. Considering you are reading this article you are probably familiar with the importance of two key words, ‘Supply and Demand’. The relationship between these two factors determines the price of a commodity. This relationship is thought to be the driving force in a free market. The commodity can be substituted for a stock or a team you are betting on, either way the demand to buy will be a key factor in the price. I parlayed what I learned at Auburn into a job as a licensed financial advisor with JP Morgan. Things went very well, although I always felt like I was not concentrating on my real passion. Eventually I made the change from trading in stocks and bonds for sides and totals, flipping calls and puts for futures and teasers.
I have learned betting on sports and betting on stocks are more similar then you might realize. Actually, due to sudden unknown government intervention and regulations affecting the stock market, the sports betting market acts as a more fair and free market. Not in the sense that it is legal in all states or countries, but more so that unknown government intervention can change the price of the stock drastically, putting the “common investor” at a disadvantage. In betting on sports, sure you can run into obstacles like injuries or weather factors, but for the most part the bettor/investor is on much more even playing field.
When comparing investing in the stock market to investing in sports betting, many will point to transaction costs being more advantageous to the investor in the stock market. I would not say this idea is wrong, but I would argue that it is not that big of an advantage. First, the -110 platform that most sportsbooks use is going to eat away at your bankroll faster then what most investors would have to pay at a discount brokerage. Last time I checked if you are paying more than $9.99 for a stock trade you are getting ripped off. Although, the same is true with sportsbooks, if you are playing at the -110 price tag and not receiving a heavy bonus for signing up or getting to place bets at reduced juice you are missing out as well. Heritage, 5Dimes,Bookmaker all with 50% bonus, BetOnline with a 75% bonus, Bovada leading the way with a 100% bonus. 100% match on your investment brings the gap in transaction costs closer than a lot of people give quality sportsbooks credit.
The last comparison I will leave you with is sports betting has a built in advantage that the stock market does not possess, at least not nearly the same advantage as the investor in sports betting. If you are smartly betting on sports you will have multiple (outs) sportsbooks to place your bet, and to find these, be sure to use a tool such as Sportsbook Review’s Rating guide, the industry leading standard for grading online betting sites.
The main reason is to find the best of the number for whatever wager you are wanting to place. This is an absolutely critical built in advantage to how each market works. If you want to buy Apple stock you are going to have to pay$115.57 a share, (I am writing this shortly after the close on Thursday9/15/16) no matter what broker/dealer you go through. Conversely, if you want to bet Ohio State on Saturday over Oklahoma, you can shop around and find a +3,instead of having to “buy” bet on Ohio State at just +1.5 at other sportsbooks. That is a huge advantage to the investor in the sports betting market. For a$500 bettor, in the event that the OSU/OU game falls 32-30 Oklahoma winning, that could mean a $1050 swing just by having the additional sportsbook options to place your bet.