Come on, all you "trader" bashers, why don't you tell everyone why you can't do the same, and see huge risk free sums just flow into your account with no effort or bother and paying betfair next to nothing for the priviledge, it doesn't make sense?!?

Would you not be better asking the traders why, if they think they're so hard done by, they don't just gamble and pay 40 or 50% of their profits in commission seeing as how they're apparently convinced this is less than 20%?

JC, if the exchange was run as a series of private price auctions with commission set at 1% of winnings on every individual bet (not market) that would be a level playing field. Would you be in favour of that level playing field?

Eddie, would they be needed in private price auctions. Market makers are just middlemen as well.

Contrarian

I really believe that there needn't and shouldn't be civil war between players with different MO's. It would be in everyone's interests if the site was offering the best for every different type of player but as Feck pointed out in his
post at 26 Feb 11 17:45, the site doen't work as well for traditional players as it does for traders or for that matter IR players and/or those clever people who have found that the site has encouraaged automated betting.

I, for one, would love to have an A/P market that could take bigger bets without collapsing.

I would love to play early sometimes but the reduction method is anathema to me and I have yet to experience it working in my favour, ever.

I would love to be able to play without having to drip feed.

So I don't play heavily on here at all.And there will be hundreds of others who think the same way.

The expensive IT superstructure is there for the benefit of the automated players who must make huge demands on the system compared to the minute demands of trad players yet the pricing system favours the former at the expense of the latter.And given the increased ratio of winners to losers Feck is right to point out the risk that somewhere in the tax authorities will be taking a close peep.

I have no problem with "trading" as such - other than it makes the market even more efficient - and nor do I have a problem with the profits made by anyone because for me they represent a function that BF would provide - and do I suppose with cross-matching - so I don't see traders as "the enmey" at all.Good luck to the IR players like aye robot, and people like yourself and The Management, Investor etc - all are very clever people and I wouldnt want to compete with them directly.

But I just know that there is a huge amount of money that is not finding its way onto the site for the reasons outlined.That's why its in BF's interests to sort this out. If they do become traditional bookies, you can bet your life that account closures would follow soon after so that's not the solution for me either.

But, as far as I can tell, none of us traders are moaning about how hard we have it,




and how easy it would be to make money taking bets that run to expiry. Whereas you're constantly complaining that the traders are able to perform simple tricks that are tantamount to theft.

Cut and paste one place where I said that. Shouldn't be hard if I say it constantly.

Eddie,

Feck biggest problem is in comprehending that market making is itself a risky activity.

That seals it for me regarding you Feck.  Up until now I have had some symphaty for some of your arguments, but saying that market makers on an exchange is just unneccessarry middlemen is so far from the truth that you obviously haven't got a clue !

That seals it for me regarding you Eddie. You obviously have no idea what a price auction is. Maybe you think there are market makers on the tote.

And once again we find ourselves back in the "traders are needed on quiet markets" territory. The lack of liquidity in quiet markets is provided by the traders. It's no wonder it's known as the famous liquidity.

So what is it you're saying contrarian? It isn't an advantage or it's hard to understand?

feck, do you want to make changes to b/fair because you are struggling to make money the way it operates now.....or is there another reason?

iz, he doesn't yse this site for betting anymore. He is a full time forumite.
  I'm sorry if this is wrong Feck, but you said a while ago you hadn't had a bet on here for ages. You may have started betting here again though ?

I know that Feck believes that they wouldn't be any less liquid (in fact, presumably he thinks that liquidity would actually increase),

Incorrect. Liquidity would certainly decrease.

feck, do you want to make changes to b/fair because you are struggling to make money the way it operates now.....or is there another reason?

iz, the current interface deters liquidity and makes it too much hassle getting a decent sized bet on. In fact early on it makes it too much hassle to get a bet of any size on.

It's not me I'm talking about contrarian. There should be an automatic (server side) drip feeder.

I can see that a 1% charge on all transactions might have something of a negative effect, to say the least, for all who trade using bots, for sure.


Obviously, this 1% charge would kill trading. I have a margin of less than 0.5% turning over 7 figures every month.

If such a system was introduced I would still be able to profit though. I'd just get a tiny fraction of bets matched relative to what I get now.

Under this 1% system, any winner needs a large margin, which is bad for all leisure punters (and in that way minimises the price advantage betfair has over traditional bookies. If the spread is still small, say 2.00-2.02, and the odds are fair, everyone getting bets matched loses, paying 1% for each transaction.

If I'm confident the correct price is 2.00, I'll be a layer at 1.98. If I had to lay at 1.97 or 1.96 (as would everyone else trying to profit), Betfair's competititive pricing advantage erodes and the whole point of using an exchange dissappears for many.


Fair price: 2.01. Best bookie price: 2.00. In a highly liquid market, you'll get layers willing to go to 2.00. Trading around their position to get passed the commission hurdle rate.

It's foolish to think that it's a good thing if this 'middleman' is not there, and the spread is 1.98-2.04.

You might argue that it won't necessarily be that wide, as gamblers will meet each other in the middle, but only people that actually expect to profit will provide volume. Leasure punters will take a price that is there more often than offer.

If Betfair created a commission structure that incentivised straight betting instead of trading, that's what I'd do. As it currently encourages trading, that's what I'm doing. Pretty simple really, and I think it makes sense. The tighter the spreads, the better for Betfair and leisure punters.

The Investor

The mindset of the average backer or layer,albeit recreational or pro, is very different to your way of looking at things.

There is no way i could be confident (at least on horses) to .02 on an evens chance. I would be neither a backer or layer just because of a difference of 0.4 in the spread.I have to work to higher margins (of confidence) in order to play and I would expect that to be true for others.

It makes no real difference to me whether I end up backing at 1.98 or 2.02 because if I'm backing at that price its because I'm clear in my own mind that its chance is more like 1.5. If I can get my bet on at 1.98 but not at 2.02 then I'm not too much bothered.

That's the difference. I have spent time on the race, I have a good knowledge of the merits of each horse given the conditions, the tactics and I am confident that the uncertaintiities are down to a minimum. If they are not, then I won't play for a marginal price gain and probably not for a major price difference unless I can leverage the price significantly.

The fact that BF may or may not offer a better price than with BM's is really neither here nor there for me. Of course I will take it if it is, who wouldn't. But can i get on at the level I want? if I do, will I influence the market too much? Can I find others who will get money on under the radar? Am I confident that I know something that the market doesn't or do I have a time line edge? these are much more important considerations.

For a pro, the only real advantage with BF is that you don't get your account closed if you win. That's it really.


It seems to me that BF have set their stall out to encourage your MO. OK, I have to live with that.You benefit. That's obvious.But the unintended consequence is that they are missing out on the really big hitters (not me now)who are quite happy to risk 10's of £000 or more on a single race.So, its to your detriment too because that would give you even more opportunity to cream off a % on the churn.

Investor

I believe I covered that in my posts of 13.29 and 13.31

So, Betfair's business model is that it makes sure that it markets to a fast-growing customer base, and keeps the money circulating in the system. The longer the money stays in the system, the more often Betfair clips the ticket. Betfair's aim is therefore to keep the money in the system for as long as possible.

The bulk of the money going out of the system is down to cheating and trading both of which would be extremely difficult without betfair's assistance.

In football people place massive bets all the time.

Question is, are they letting them stand, or they trying to force the price down a couple of ticks so that they can trade out with a profit?

Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid. VC built his business up through generating large Chinese football backers. There is far less risk of insider knowledge with football than there is with horse racing so layers are less vulnerable to coups.

As Feck says, horse racing markets are far more volatile and the players are more savvy and wary of market movements because of the insider angle.

no, it's a bit more complicated than that daves.