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STOCK EXCHANGE v BETTING EXCHANGE: Many people consider playing the Stock Exchange as a sensible thing, and some consider it a gamble and a place for the rich. Similar stones can be thrown at the Betting Exchange, is it a sensible place to invest and make money or just an additional platform to use for the enjoyment of betting on sports and events you love?

Here at BETDAQ we thought we would take the time to consider The Stock Exchange v The Betting Exchange and see how the similarities or differences play out.


Trading the Markets

It’s hard to argue that both using a Stock Exchange and a Betting Exchange are effectively just trading markets. The difference being a variance in ownership of goods, however tangible they may be.

With purchasing stock, you own something, but if that stock reduces in value or eventually has no value, what do you really have? With a trade on a betting exchange this is a similar scenario except the end is always in sight. The trade and the position taken with a back or a lay cannot last forever, and will either win or lose at a fixed point in time. A blink of an eye is a long time on a betting exchange, but the time is also a horizon that allows for returns a stock market can rarely match when pitted against each other.

Skill, and luck of course, is needed with both. To hold, to sell, to back or to lay are where the money is made and multiple versions of the same can be needed to exit the position in a better place.

Liquidity

Without a liquid market place buyers and sellers, backers and layers, can’t operate, and it’s crucial in both a stock market and a betting exchange format that liquidity is there so competition between opinions can be matched and transactions can flow.

Prices need to move up and down and fluctuate from supply and demand. Whether it is stocks in a hot tech company that is being tipped for great things or a double figure price about a horse in the 2.15pm at Lingfield, if no one wants to sell or offer it up, then there is little to report.

The bigger the event, the closer to the action, and the greater the differences of strong opinions, the more depth you will find in any financial market and that applies to the Stock Exchange and the Betting Exchange.

Data Analysis

Comparing market movements and real time fluctuations in prices and opinions is another common theme shared by these two trading platforms. Data can be crunched, predictions can be made, and sensible strategies employed across the Stock Market and the Betting Exchange.

Timing of when to enter a market – a purchase price or a price to take when backing – and when to exit a market – a selling point or a lay bet price – can be set in advance or changed on the fly. Skill, judgement, and knowledge combine to decide the timing. All of these are crucial and can be analysed to find optimum moments and opportunities.

Summary

There are key differences of course between the Stock Exchange and the Betting Exchange, the biggest surely being the differing time horizons. Sports betting transactions can end in a moment, especially in-play, whilst stock plays taking various periods of time to play out will rightly feel less risky to the masses. The risk-rewards are similar, yet the tangible difference in holding a virtual bet slip to a virtual share certificate are too big for some to overcome and compare favourably.

The bottom line is both exchanges require skill, luck, liquidity, analysis, knowledge, and if it dare be said, an edge to make it pay. If tackled responsibly with funds you can afford to lose, it can be an enjoyable and financially worthwhile use of time and resources, enhancing everyday enjoyment, which is what it should always be about.

Whether gambling on Tesla reaching space with a moon bus before competitors, on Slow Joe landing the 3m handicap chase at Chepstow, or on Leicester winning the Premier League again, someone will be right and someone will be wrong.

The exchanges exist to cater for these fascinating differences of opinion.


Photo by Burak K from Pexels