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Execution Risk
Q: What is execution risk? A: Execution risk is the risk that a theoretical arbitrage fails during real betting because odds move, limits change, or only part of the strategy is executed.
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Execution Risk
Q: What is execution risk?
A: Execution risk is the most practical risk in arbitrage trading.
The model only proves one thing:
Under current odds, current rules, and current stake ratios, the group of legs can theoretically cover the bankroll.
Real trading still requires every leg to be placed.
Common execution risks include:
| Risk | Meaning |
|---|---|
| Odds movement | The second leg becomes worse after the first leg is placed |
| Market closed | One leg disappears before execution |
| Limit too small | The bookmaker does not accept the required amount |
| Delay | Execution across bookmakers takes too long |
| Partial fill | Only part of a leg is accepted |
| Rule mismatch | Settlement rules differ across platforms |
For example, the model may require:
| Leg | Stake |
|---|---|
| Over 2.5 | 491.30 |
| Under 2.5 | 508.70 |
If Over 2.5 is placed but Under 2.5 drops from 1.98 to 1.85, the original ratio no longer works.
So a real strategy must check price existence, limits, order sequence, account funding, and fallback plans before execution.