Whenever a bookmaker quotes odds, a prediction market quotes a price, or a trading venue quotes a market, it is really quoting a probability. This lesson shows how to read odds as probabilities, why a bookmaker’s probabilities deliberately add up to more than one, and how disagreement between two platforms can create a profit that is locked in no matter what happens. The arbitrage idea at the end is the same one that powers a lot of real trading, and it is a favourite interview probe because it tests whether you can turn a betting line into a probability and spot when the numbers do not add up. It builds on expected value from earlier in this course and follows naturally from the strategic thinking in the Game Theory lesson.
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