SMT 101 · Principles of Sports Markets

A sports market is an agreement about an uncertain outcome, offered at a stated price and settled against an official result. This lesson describes who takes part, what a position is, and how a position is settled.

Operators offer several standard market types on each game, and each type asks a different question about the result. This lesson covers the main types and shows how each one pays.

The same price can be written in three standard notations: American, decimal and fractional. This lesson explains how each one expresses the payoff and how to convert between them.

Every price can be restated as a probability: the share of the time a position must win to break even at that price. This lesson shows how to make that conversion in each notation.

The implied probabilities in a market add up to more than 100%, and the excess is the operator's margin. This lesson shows how to measure that margin and how to remove it to estimate the market's fair probabilities.

A market price is first set by the operator and then reshaped by information and by the positions participants take. This lesson explains how a price is formed at the open and why it moves before the close.

By the time a market closes, its price reflects nearly all the information and positions that arrived after the open. This lesson explains why the closing price is the market's best estimate, and how to compare a position's price with it.

The size of each position matters as much as the price. This lesson explains how to define a unit, how to size positions in units, and how to keep total exposure within limits that capital can absorb.

This session applies the methods of Lessons 1 to 8 inside the WAGERBIRD® Alpha Terminal. It is a guided walkthrough of the two screens that carry market prices and research: the Odds Screen and the Board.