Analysis of Liquidity and Market Depth in Arbitrage

In arbitrage betting (arbs), scanners often show profitable situations that turn out to be unworkable in reality. The reason is a lack of market liquidity or shallow depth. A bettor sees the odds, but it's impossible to place the required amount at that price.

In this article, we will break down how to analyze bookmaker market liquidity, what depth means, how to account for delays in odds updates, and how to assess the "playability" of an arb in advance.

What is Market Liquidity?

Liquidity in a bookmaker's market refers to the amount of money that can actually be placed at the current odds.

Example: odds of 2.10 are available in the market, but the bookmaker is only willing to accept $50 at that price. Any portion of the bet beyond that will be placed at odds of 1.95. Formally, an arbitrage opportunity exists, but in reality, there is almost no liquidity.

Factors Affecting Liquidity