# How to manually calculate an arb?

Pages: Author Topic: How to manually calculate an arb?  (Read 1251 times)
MrG
Gaining experience Karma: 0
Posts: 52 I was wondering how exactly is an arb calculated.

If I had one bookie offering odds of 1.4 for example, is there a quick calculation I can do to determine what odds it should be above at the other bookie? Logged
alealeale
Pro    Karma: 14
Posts: 340 (1/0.4)+1=3,50 break even Logged
alealeale
Pro    Karma: 14
Posts: 340 if you have 1,20 you have to do: 1/(1,20-1)+1=6 Logged
MrG
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Posts: 52 Excellent, thanks Logged
djordjeno
Has experience  Karma: 6
Posts: 104 if you have 1,20 you have to do: 1/(1,20-1)+1=6

True, but for me is less simpler to calculate like this way

odd / (odd -1)
in this scenario for 1.20
1.2/0.2 = 6

another example 1.80
1.80/0.80 = 2.25 Logged
MrG
Gaining experience Karma: 0
Posts: 52 That's great Do you also know what calculation would be required to a 5 or 10% arb for example?

Its very useful to know the maths you already outlined, but is there a similar calculation to work out what percentage arb im getting?

thanks  Logged
LazyBird
Gaining experience Karma: 1
Posts: 33 You can convert both odds to probabilities, add them together and then divide 100 by the sum of the two, minus one.

For example, if you had 2.1 with one bookie and 2.1 with another. The calculation for converting a decimal odd to a percentage probability is

Price A. 100 / 2.1 = 47.62
Price B. 100 / 2.1 = 47.62

47.62 + 47.62 = 95.2

95.2% is the combined probability in this case. Since it's under 100 it's an arb and we could call it an 'underround'. Any two prices offered by the same bookmaker will always be over 100 and are referred to as an 'overround'.

Anyways, 100/95.2 - 1 = 5%. So, in this case it's a 5% arb. Logged
kustef
Pro    Karma: 14
Posts: 319 when i started doing arbitrages i printed this "paper helper" Logged
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