Learn / Library / Market making
Odds across books
Book offers decimal odds of on outcome A and on outcome B. Book offers on A and on B. Exactly one of A or B happens, and a winning bet returns stake times odds. A bettor places a total of split between A at the best odds and B at the best odds, choosing the split so that the payout is the same whichever outcome occurs. What is the guaranteed profit, rounded to decimal places?
Checking an answer needs JavaScript. The hint and the solution open without it.
Hint
Each side's stake is the target payout divided by its odds.
Solution
- The best odds are on A and on B, so the stakes for a payout of S are and .
- Setting gives .
- The guaranteed profit is .
Answer: