Sports gambling is getting more interesting and more engaging. On one new sports betting exchange, it’s now possible to place a limit order – a way of executing an automatic contract purchase once the betting contract reaches a certain price.
But how exactly does a “limit order” work? And how can you use this feature to your advantage?
Traditional Limit Orders
The term “limit order” originates in the stock trading world. When buying and selling stocks in the most traditional sense, people typically place market orders, issuing buy and sell orders for whatever the current price happens to be. If a stock is trading at $50 per share, you buy it for $50 per share.
A limit order is a buying or selling order that specifies a certain price that must be met before the order is executed. For example, if a stock is trading at $50 per share, and you place a limit order for $45 per share, your trade will only be executed if and when the price falls to $45 per share.
It’s a way for investors to minimize risk and place orders proactively so that those orders are automatically fulfilled even if the investor misses the price drop or mistimes the order.
Limit Orders on a Sports Betting Exchange
On Sporttrade, limit orders work very similarly. The difference is that instead of placing an order for a specific stock price, you’ll be placing an order for the price of a sports outcome to occur. Rather than placing a bet and holding, you can trade in and out of a bet based on the probability of that outcome to occur, where price equals probability.
For example, let’s say the Jets are playing the Ravens, and you believe the Ravens are going to win. The Ravens are favored to win, so they’re currently trading on Sporttrade at $70 per contract (70% probability that they will win). If, before or during the game, the odds shift in favor of the Jets, those Ravens contracts might start dropping in value. You can place a limit order on a Ravens contract for $55 – so if the price drops to $55 or lower, you’ll automatically buy into the position for the Ravens to win.
Key Advantages of Limit Orders
There are several significant advantages of limit orders in the world of sports betting, including:
- Timing concerns. Baseball games have been known to go to 13 innings (and, prior to recent rule changes, beyond). If the game runs long, and you’re not able to watch the whole thing, or if you’re simply not available from the beginning of the game, limit orders on Sporttrade give you a way to control your betting despite missing the action. No longer will you have to avoid betting on a game just because you’re not available to watch the whole thing.
- Total financial control. Some gamblers love the idea of limiting orders because it gives them total financial control. You might genuinely believe the favored team is going to win the game, but you might believe that the odds are disproportionately favoring them. If this is the case, the potential payoff is not going to work in your favor. You might not be willing to buy into a position on Sporttrade for such an absurdly high price. With limit orders, you definitely don’t have to; you can set a price equal to whatever you’re truly willing to pay and only pay that price if the probability of that position drops.
- Multi-game betting management. Limit orders are also ideal for multi-game betting. Placing bets on multiple games at the same time, especially while those games are playing out in real-time, can get complicated and confusing. How do you keep track of all the odds and contract prices at the same time? With limit orders, you can set your trades in advance and have them fulfilled automatically.
- Betting without watching. This is also good for betting on games you don’t intend to watch in full. If you’re going on vacation, or if you have other responsibilities to fulfill, you can “set and forget” your strategy.
- More options for picky betters. If you’re a picky better, you might only place bets when you feel absolutely confident in a favorable payoff possibility. Limit orders are great for these types of gamblers as well; you’ll no longer be forced to only buy bets at market prices. Instead, you can set your own terms.
If you’re interested in taking your sports gambling to a new level, or if you just need a way to manage your bets more actively while you’re occupied or away, limit orders on Sporttrade could be a perfect fit for you. Start small while you’re experimenting and gradually ramp up your involvement as you gain more knowledge and experience in this field.