Trading and Punting

Professional sports betting players are heavily involved in trading on the betting exchanges, not just placing bets on traditional sportsbook where regular players make their punts. Firstly we need to look at what a “punt” is? A “punt” is a bet made where after the event is over you suffer either a 100% loss or a win that is dictated by the odds that you receive.

A “punt” is sometimes referred to as a gamble but many people who believe that they are punting are actually trading or vice versa or in some cases merging the two. If you always remember that a punt is a bet that can give you an entire wipe out of your stake at the end of the event.

A trade on the other hand if managed well enough doesn’t do this. Let us say that you want to make a trade for 100 pounds on the exchange.

What is the Difference

This is not a punt and you are never assuming the total risk of the 100 pounds as long as you have a stop loss in place. So even if the trade goes against you then you total loss may be say 15 pounds.

If you let the price go beyond this stop loss then you are inadvertently dragging yourself into punting. So what you have to remember that a trade is in many ways the same as any other trade that you may make in life. Like for example if you bought a watch for 100 pounds with the intention of selling it on for a profit.

If you keep the watch then you haven’t traded, you have actually made a purchase and as traders we are not interested in purchasing and we do not chase ownership of items. We only accept temporary ownership until we move them on.

The Key Analogy

If you have even the slightest idea of what to purchase then there is almost no way that you can take a full loss of the hundred pounds.

If the trade goes badly and you only get back say 80 pounds then this still isn’t a total wipe out. This is why traders can place far larger trades than they could if they were punting. A 100 pound trade is in fact far smaller than a 100 pound bet.

When we look at the possible potential loss if the trade is managed well of say 20 pounds then it is clear that a 100 pound trade is comparable to say a 20 pound bet when it comes the largest possible financial loss.