Arbitrage – General Overview
Before we get into the specifics of arbitrage as it applies to boxing, let’s go through a quick discussion of arbitrage in general.
The term arbitrage is usually used in economics and finance. Basically, arbitrage occurs when someone takes advantage of a price differential between two or more markets. The arbitrageur will enter into a combination of matching deals that capitalize on the differential. The profit is the difference between the market prices.
Statistical arbitrage is an imbalance in expected nominal values. A casino has a statistical arbitrage in nearly every game of chance that it offers—referred to as the house advantage, house edge, vigorish or house vigorish.
Arbitrage is possible when an asset does not trade at the same price on all markets. As we will see, the numerous sportsbooks and bookies do not always have the exact same odds for bouts.