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What is advantage play?

I see advantage play as a form of speculative investment. On the stock exchange if you do well you’re seen as a shrewd investor, do poorly and your choices are seen as a gamble.

The same is not said for gambling, do well and you’re lucky, do poorly you’re a fool.

There is little logic to the radical difference in how people view these activities; they are both in effect a gamble. The main differences are the timeframe they typically occur over and the odds.

Gambling is made up of quick transactions from start to end and the odds are typically quite high by comparison, odds tend to be fixed and the risk also tends to be fixed. Equity investments are typically long term gambles, with lower unknown odds but with higher unknown risks.

We all know the key to success on the stock market is research and choosing the right time to buy or sell. Well gambling is no different, knowledge of the events you’re betting on, selecting the right odds to bet at will give you an edge, also choosing your exit point, by backing out of the bet with the use of strategies such as arbitrage or through the use of exchanges will also add to that edge.

Advantage play is about finding that edge to maximise the expected value of your bet, however research is just one tool used by APers. There are dozens of ways of finding that edge, some rely on research, some on experience of movements in odds, some use promotions offered by bookmakers to encourage gambling, others use differences in odds offered by bookmakers.

The end game of advantage play is profit. If you can work your bets so the effective odds of your bets are higher than the probability of an event occurring, you will win in the long run.

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Posted February 13, 2012 by apeveryday in General

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