# Arbitrage

> Independent. Not affiliated with, endorsed by or sponsored by Novig.

Canonical: https://novigapi.com/learn/arbitrage

Arbitrage is betting every outcome of a market across different books or exchanges at prices that guarantee a profit whatever happens.

```
arb exists when sum(1 / decimal_i) < 1; stake_i = total x (1 / decimal_i) / sum(1 / decimal_j)
```

An arbitrage, or arb, appears when two venues disagree enough that you can back every outcome and lock in a profit. It happens because books move at different speeds and shade prices differently. If one book has a team at +115 and an exchange lets you take the other side cheaply enough, the implied probabilities of the best prices add up to less than 100%, and the gap is your guaranteed margin.

## How it works

Take the best available price for each outcome, convert each to an implied probability, and add them. If the sum is below 1, an arb exists. Split your total stake in proportion to each outcome's implied probability; every outcome then returns the same amount, total stake divided by the sum. The profit margin is 1 / sum - 1.

## Worked example

A sportsbook offers Yes at +115 (decimal 2.15, implied 46.512%). On Novig the best Yes bid is 48%, so the No ask is 52%. Together 46.512% + 52.000% = 98.512%, an arb of 1.511%.

Splitting $1,000 across the two venues

| Leg | Price | Implied | Stake | Return if it wins |
| --- | --- | --- | --- | --- |
| Yes at sportsbook | +115 | 46.512% | $472.14 | $1,015.11 |
| No on Novig | 52.0% | 52.000% | $527.86 | $1,015.11 |
| Total |  | 98.512% | $1,000.00 | Profit $15.11 |


The Novig leg buys about 1,015 contracts at $0.52 each. If you place it pregame on a game market there is no fee and the profit is $15.11. If you place it in-game, the taker fee is 0.06 x 0.52 x 0.48 x 1,015.11 = $15.20, which is larger than the whole arb: the trade loses $0.09. The [arbitrage calculator](https://novigapi.com/arbitrage-calculator) runs two-way and three-way splits.

## On Novig

Novig is a natural arb leg because you buy at a price set by traders, and its percent prices make the arithmetic easy: the price is already the implied probability. Check two things first. Fees: per [Novig trading fees](https://docs.novig.com/api/concepts/fees) (checked 12 Nov 2026), game markets charge the taker 0.06 x P x (1 - P) per contract only while the event is live, so a pregame arb keeps its full margin. Depth: the ask is only good for the size resting behind it. Our `/orderbook/{id}` endpoint shows how many contracts sit at each price.

## Common mistakes

- Ignoring fees and depth. A 1.5% arb can vanish after a fee or a partial fill.
- Placing one leg and not the other. Prices move; place the harder leg first.
- Mismatched rules. A voided player prop at one venue and a settled one at another breaks the hedge.

---

Get a free API key: https://novigapi.com/sign-up . Docs: https://novigapi.com/docs . MCP: https://novigapi.com/api/mcp . Operated by Stunning Couches LLC. Independent. Not affiliated with, endorsed by or sponsored by Novig.