Glossary / Strategy / Arbitrage
A ParlayAPI glossary entry

Arbitrage (Arb)

An arbitrage (arb) is a position built from opposite sides of the same market at different books, at prices whose combined implied probability is below 1.0 - locking in a profit no matter the outcome. Arbs exist because books move lines at different speeds.

Worked example

# Two books disagree on the same game
        Book A:  Team X  +105   ->  48.8%
        Book B:  Team Y  +110   ->  47.6%
        implied sum = 96.4%  ->  3.6% locked margin
        
        # Stake in proportion to implied probability:
        stake_X = 48.8/96.4 × bankroll ; stake_Y = 47.6/96.4 × bankroll
        # Either result returns ~103.7% of total staked

Real arbs are usually 1–3%, short-lived, and operationally risky: one leg getting limited, voided, or repriced before the other fills turns an arb into an open position. Books also restrict accounts that only bet arbs.

Where it shows up in ParlayAPI

The arb scanner computes cross-book implied sums continuously across the aggregated feed and lists markets under 1.0 with their margin. Freshness is the whole game here - an arb computed on stale prices is just a bad bet.

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