Dutching & Arbing?
As I understand it dutching is the process of backing all possible outcomes at bookies to lock in a profit if the odds are "favourable". Please correct me if I'm wrong but am I right in saying that dutching IS arbitrage?
Dutching and arbing are quite similar concepts if not identical, I just looked up the two on wikipedia:
Originally Posted by csbr35883
Arbitrage betting - Wikipedia, the free encyclopedia
Dutching - Wikipedia, the free encyclopedia
and they are pretty similar descriptions.
Originally I was going to reply that a dutch is an arb if it's profitable, but I think that's my misunderstanding really of the terms... the explanations on wikipedia (which of course is always possibly not correct!) for dutch and arbitrage are very similar, backing all outcomes in an event to make a profit.
For some reason though I do think of an arb as being a back/lay thing - where you back an outcome and lay it at an exchange - and a dutch as involving two or more back bets at bookies - where you back each possible outcome at bookmakers to make a profit. However in both cases you are covering all possible outcomes, so in that sense they are equivalent.
Although then again how you define profit is up for question, if you're going for a WR then you don't necessarily have to make a profit on the qualifying bets so long as any loss you make is less in total than the value of the bonus.
So... clear as mud?!
Clear as mud?? Err... yes, yes it is... well... sort of if you catch my drift!! I accepted a long time ago that the arbitrage/gambling industry is rife with terminology that means absolutely nothing to the average layman, but in my mind, having originally started arbing via tips from betbrain I always thought of a "dutch" as a "surebet", and inversely thought of a "surebet" as an "arb".
In my mind I think I'll stick to believing it's all arbitrage at the end of the day, but just that there are two types of arb... the dutch and the back/lay.... :-) Of course, like you suggested, an arb is only an arb when it guarantees a profit. M'weh, anyway, I guess I shouldn't think about this too much, after all I've probably missed out on 2 or 3 arb opportunities while typing this!!
Thanks for the wikipedia links.
Arbs are short for Arbitrage, and this actually started around the turn of the Century when communication accross vast distances began to improve with the advent of planes, trains, automobiles, and telegrams and then telephones, etc etc.
In its original and purest form it was used by banks who had offices in several different countries to trade gold and $s to increase their Net balance sheet at no overall cost and with no risk. Assuming each branch in New York and London each had $100 in cash and 100 ounces of gold to start and the price in both countries is $1 = 1 ounce. Now obviously the price of Gold is always moving up and down, but back in 1900 they didnt have the internet and not everyone in London new what the price of Gold was in New York. So if in New York the price moved to $1.1 an ounce a bank which had the fastest link to its London branch could sell its 100 ounces in NY for $110 and at the same time tell its London office to buy another 100 ounces for $100. Overall the banks balance sheet has gained $10 for no risk. If later the price at London is ever higher than in NY the reverse would happen. Etc etc etc
The Gold and $s would never actaully move about, it was just paper trades, whoever had the best information could buy and sell simultaneously and garuntee a profit for no risk. What we do with bets, and arbs, is the same, you are buying and selling prices and whoever has the best/fastest information about the changes in prices will profit.
Im not sure how any of the above helps with anything, but that is how "arbs" began.
Have a plan and stick to it
Very insightful post Andy!
I can't help but feel partly responsible... :-) Thanks for the history lesson Andy... but I'm a little confused now.... are you sure they didn't have the Internet in 1900?
Originally Posted by munk
Hehe you were back in them thar gold trading indexes in the early 20th century!
Originally Posted by csbr35883
From a practical point of view you can divide matching bets in 2 different ways.
Originally Posted by csbr35883
The 1st is whether you make a profit by covering all outcomes or not. If you make a profit then I'd probably describe it as an arb (using the matched betting terminology, not the dictonary definition). If you make a loss that I'd not view it as a arb. That doesn't make it pointless - if you place bets as a qualifier to get a bonus of some sort then a 90-% return on your money may still make it profitable in the long term.
2nd is how you cover all outcomes. If you back something at a bookie then LAY the bet off at an exchange then you've covered all outcomes. You can also do this by backing the 1st bet then BACKING all the other outcomes at other bookies/exchanges - this is what I'd understand as dutching. Again this may be done for a profit in its own right (I've not read the links Munk put up yet, but I assume they relate to the American Gangster who gave it it's name) or just as a qualfier for a bonus.
Therefore you could...
1) Back/Lay something at a profit (an arb)
2) Back/Lay something for no profit/a loss but qualify for some bonus that will then put you in profit afterwards
3) Back all outcomes at a profit (an arb and a dutch)
4) Back all outocmes for no profit/a loss (at dutch, but non-profitable)
Hopefully the water isn't muddier now. If it is then please write to the management.
Well I say MSE has a lot to answer for for muddying a lot of these terms!
Gubbing has come to stand for having an account closed or limited which is a total misnomer (correct definition being a 1.01 'sure thing' that loses).
Similarly I think as you mention lazza, 'arbing' has come to mean something different as well courtesy of MSE, a way of making money in and of itself from a back/lay combination that results in a profit when the true meaning of arbitrage or 'arbing' is simply backing all outcomes within a line within an event... which is basically the same definition as dutching!
Oh well as long as we make money from it who cares what people want to call it!
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