Investment Methods in Sports Trading

Are you interested in sports betting as an investment, but find the terminology and the methods slightly confusing? Don’t worry – ScoreMetrics Lab is here to help!

In this article, we’ll introduce all the basic investment methods that you’ll find from your sportsbook. Read on to find out what you should know.

The spread and the moneyline

The two most common ways of investing in the result of a game are by putting money down on a team using the point spread (often referred to just as “the spread”), or by investing in a team’s moneyline.

The moneyline is very simple – you pick a straight up winner for a game. The odds you’ll be getting for each team’s moneyline depends on how bookmakers favor them in a matchup. 

The spread requires a little bit of explaining. It’s essentially a handicap that evens the odds. Let’s look at this through an example where the Los Angeles Clippers are playing in Boston against the Celtics in the NBA. Here’s what the lines might look like for the game:

 

 

Moneyline

Spread

 

Los Angeles Clippers

+100

+2

-110

Boston Celtics

-120

-2

-110

This means that the bookmaker thinks that Boston is the favorite to win by two points. This is marked by the “-2“ in the Spread column. So, let’s say that we invest $100 in Boston against the spread. What needs to happen for us to win?

Boston needs to win the game by more than two points. Again, let’s look at this through some example results:

 

Clippers 101 – Boston 105 

Our investment wins (Boston won by more than 2 points)

Clippers 101 – Boston 102

Our investment loses (Boston won by less than 2 points)

Clippers 101 – Boston 103

This is a push, we get our investment back (Neither team covered the spread)

 

And finally, let’s compare the potential gains for each investment opportunity in this matchup:

 

Method

Investment

Odds

Return

ROI

Boston against the spread

$          100 

-110

$          191 

$            91 

Clippers against the spread

$          100 

-110

$          191 

$            91 

Boston moneyline

$          100 

-120

$          183 

$            83 

Clippers moneyline

$          100 

+100

$          200 

$          100 

 

A term you’ll often see when doing analysis for investment opportunities is how teams have performed “against the spread” (ATS for short). Let’s take a look at this season’s ATS records for the two teams we used in our example:

 

Team

ATS Record

Cover %

Boston

32-20-2

61.5%

LA Clippers

29-26-0

52.7%

 

The ATS record of a team simply shows us how often the team has covered their spread in games and the “Cover %” (sometimes referred to as “ATS%” or “ATS win %”) column just gives a percentage number for that. 

You’ll notice that Boston’s record is 32-20-2 – what do the ties mean here? When investing in the spread, a tie situation happens when neither team covers the spread. This is called a “push”. Investors get their investment back from the bookmaker in push situations.

Over and under

Investing in the total amount of points scored is the third common way to put money in a game besides the spread and the moneyline. Investing in the total is a different type of method – the winner or the loser of the game does not matter, so it’s independent of the outcome of the game. Instead, we’re investing in the “over” or the “under” (often referred to as “O/U”) of a game’s total points scored. 

 

Here’s how it works:

Over 210.5

-110

Under 210.5

-110

 

If the total combined amount of points scored by both teams in this example game exceeds 210, the game goes “over”. And if the total amount of points stays below 211, the game goes “under”. Pretty simple. 

Similarly to the spread and the moneyline, bookmakers often offer the possibility of investing in the over or the under of single quarters and halves as well.

Parlays and teasers

Now, if you’re familiar with sports betting, you’ve probably at least heard of parlays and teasers. These opportunities are less commonly utilized by smart investors.

A parlay is a type of investment where you pick two or more results and all of your picks have to be correct in order to win. You could, for example, pick the Celtics to win against the spread in our example game and pick another winner against the spread from another game. Both picks would need to be correct for you to win the parlay. 

Why would someone want to do that? Because the odds for the picks are accumulated, meaning that you’ll be getting a higher payout compared to investing in both results individually. 

Let’s look at an example where you’d be looking at investing in Boston and Milwaukee against the spread:

 

Method

Investment

Odds

Return

ROI

Boston against the spread

$          100 

-110

$          191 

$            91 

Milwaukee against the spread

$          100 

-110

$          191 

$            91 

Boston & Milwaukee parlay

$          100 

+265

$          365 

$          265 

 

As you can see, the ROI for the parlay ($265) is bigger than the combined ROI for the individual investments ($182).

But the problem for smart investors is this: trading in sports is a game of close margins. None of the single trades you’ll be making will ever be “sure bets”. When you parlay results together, you’ll most likely be making so much more losing trades that the accumulated odds you’ll be getting will not be enough to cover the losses.

Teasers are similar to parlays in the sense that they also require you to pick two or more teams. But the trick in this type of investment is that you’ll get to add points to the spreads (this is called “teasing”). 

You could, for example, do a six-point tease on Boston and Milwaukee. Let’s say that the lines for their spreads look like this:

 

Boston -2

Milwaukee -8

 

After teasing, they would turn into:

 

Boston +4

Milwaukee -2

 

So, essentially, teasers make it easier for you to hit your selection against the spread. But again, you’ll need to be right in all of your selections to win the teaser. And the odds you’ll be getting will be much lower compared to parlays. 

Experienced sports traders might be able to find value from parlays and teasers. We recommend others to stay away from them.

Conclusion

So that’s the basics on the methods available for sports investors. To get an understanding of what sort of investment possibilities are out there, read through some of the analysis and reports we do here at the ScoreMetrics Labs

And don’t forget to check out John Todora’s new book – “Zero Correlation Investing – The Score Metrics Secret”, which is currently on sale for a limited time. It’s a tremendous resource for anyone looking to get exposure into the sports trading market!

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