From casinos, bookmakers and market makers.
For the past 25 years, I have been an avid supporter of all three businesses: casinos, sportsbooks, and market makers. And by supporter, I mean my hard earned money has gone to support these businesses.
At some point it occurred to me that these business models are connected and that connection became the access to a breakthrough in my performance and profitability.
Let’s look at these business models:
CASINOS
Casinos make money because every game they offer has a built-in statistical advantage for the casino. That edge may be very small (less than two percent), but over time and the millions of bets placed by casino patrons, that edge gives the casino enough money to build elaborate hotels, fountains, giant pyramids, towers, and more. replicas of famous monuments.
BETTING SHOPS
Generally, a bookmaker is an expert in the field in which he offers bets. Bookmakers must have great knowledge or they will not be able to make a profit.
The aim of a bookmaker is to establish a point margin that allows him to make a profit no matter what the outcome of an event is. This requires constant adjustment of odds and in some cases one bookmaker may even buy bets from another bookmaker to create the desired spread.
MARKET MAKER:
Have you ever thought about how you can just call your broker (or go online) and in no time sell 1,000 shares of Cisco? I mean, who is buying those shares? How does that really work?
Well, a market maker is to be thanked for this. There are people, market makers, who are willing to be there, waiting at all times, to buy or promise to sell any given stock. They will buy what you sell, or they will go out and get what you want to buy. They are the grease on the wheels of the market.
What is interesting, from our perspective, is HOW MARKET MAKERS MAKE THEIR MONEY!
Look, they’re taking a risk with every trade. Suppose they buy the 1000 shares of Cisco stock that you want to sell, and before they can sell it, the price drops. They are risking their assets with every trade they facilitate.
How they counter this, how they benefit, is that they add something to every trade. They buy for a little less than the going price and sell for a few cents more than the going rate. They don’t need a lot of marking. Just a few cents on each side, but given the volume of what they do, they end up winning.
Not only is your risk mitigated, but the amount they add puts the odds on your side. They are not playing for stocks to go up or down at all. They just want there to be volume!
THE MILLION DOLLAR CONNECTION
You can see it? All three make money by ensuring that THEY have the statistical advantage at all times.
None of them needs (or wants) to win big. No, your money comes from the EDGE you set BEFORE you place any bets. In fact, they are
TAKING the bets, not MAKING the bets.
All they need is a little lead and they know, mathematically, that they’re going to come out ahead.
So what about that? Good for them. What does that have to do with us?
Well, what if I told you that there is a way to gain the same statistical advantage that casinos, bookmakers, and market makers have? What if I told you that there is a way for you to stop MAKING trades and start MAKING trades (just like a casino, bookie, and market maker)?
I want you to know that there is. You can operate as a bookmaker. You can trade like a casino. You can use market makers to be a market maker.
