We gamblers can only pray

*welcome to.

There's obviously a lot more to compiling a set of odds for a horse race than the likes of a football game

I can't see that it's any harder or easier (Assuming all the sports are straight that is)

If they aren't efficient at the off, then why is anybody complaining about the system in place? Just bet the wrong ones and wipe out the naughty traders?

I can't see that it's any harder or easier (Assuming all the sports are straight that is)

What's that John McEnroes phrase?



If they aren't efficient at the off, then why is anybody complaining about the system in place? Just bet the wrong ones and wipe out the naughty traders?

You already know why I'm complaining. If you think me taking advantage of wrong prices at the off would result in me wiping out traders there's not really any point in attempting to educate you.

You already know why I'm complaining.

Actually I really don't.

If there are people putting up wedges of incorrect money at the last minute on an event and that money is there to be taken for profit, I don't see why you care how it got there.

Even better, if the money ends up in the wrong places because of traders, surely this should be embraced?

I don't think I'm a trader by your definition (Though I do pay PC, so I might be), but I genuinely don't understand your gripe at this point.

If it's simply that you can't be bothered to wait until the off to have a bet, I think the problem is yours, not the systems.

I'm complaining because the trader friendly interface (and RF's in horse racing) deters liquidity and has turned this place into last5minutes.com. Also, the pc (which was mainly brought in to deal with cheats and traders) deters new custom and the plethora of betfair created "professional gamblers" will ultimately lead to taxation which will decimate liquidity. Everything that is bad about this place is a result of favouring groups of people who contribute nothing to the exchange experience.

Why have the traders turned it into last 5 minutes?

Forgetting horse racing, where else does this happen?

It seems that for whatever reason (probably the immense difficulty of judging whether a fast beast will beat a slow one in a fair race), horse racing tissues are made up to a much higher ovveround than those in other sports. The issue lies with that mentality, and not with the traders.

If someone's going to price a market to 125% then obviously someone is going to undercut it, in the same way that if i tried to sell cans of beans for £3.20 a can, I'm not going to do very well.

Put your prices to a sensible level and the traders won't have anything on which to feed. Either that or just take their good prices and let them lose on the bad prices. (I actually don't see why this wouldn't send them skint, feel free to enlighten me)

You seem to be confusing traders with interface.

Put your prices to a sensible level and the traders won't have anything on which to feed. Either that or just take their good prices and let them lose on the bad prices. (I actually don't see why this wouldn't send them skint, feel free to enlighten me)

I can see why you're unsure if you're a trader.

Well I don't think I'm a trader but your definition is rather odd, so in your eyes I might be.

What is it you're claiming here Investor? I get the impression from your "Only a trader can profit from a spread like that" line that you think the people on the other side of your trades wouldn't have been matched in your absence. I could maybe see your point if you'd backed at 12.2 and laid at 12.44 but why wouldn't those you were matched with just be matched with each other at better odds (unless you're claiming it's losing traders on the other end of your bets)?

Feck, what I'm saying is that a successful gambler (as in straight bettor) can't compete with me to offer a better price. My assumption is that the people on the other side of my bets are on average either traders or losing gamblers.

A successful straight bettor will only be on the other side of my bets if he thinks the price is at least a few ticks out, otherwise he can't profit.

What would have happened in my absence is either the guy on the other side of my bet backing at 12 would have backed at 12, or at 11.5, or not at all. Three options, none of which leave him worse off. So in my absence another (likely successful) trader would have stepped in my place either at the same margin (laying at 12), or a better one (laying at 11.5).

Granted there will always be a place for successful straight bettors, for instance, if they think Chelsea should be 1.4, but they are trading at 1.3, they will lay Chelsea. If the selection is massively overbet, it might not reach 1.4 or anything close to that, in which case it could make sense not to trade out.

Traders drive the margin down to close to zero, which is good for all losing gamblers (at least 80% of bf customers). Without me, the bets probably would have been matched anyway. The key is that thanks to my involvement, they are getting matched at more efficient (or in the worst case equally efficient) prices.

The smaller the difference is between winners and losers, the more funds churn, and the larger the slice of the pie that ends up going to Betfair themselves relative to winners.

Almost everyone that makes a consistent profit on betfair is getting paid to keep markets efficient. Successful straight bettors get paid by taking prices that are out of line, thereby bringing them in line, or offering prices that are less out of line than the next best offer. Successful traders get paid by keeping the spreads tight.

I have a feeling Feck will be along to comment on your last post Investor.

Feck N. Eejit
When: 18 Mar 11 10:00
Joined:
Date Joined: 10 Jan 02
| Topic/replies: 3,152 | Blogger: Feck N. Eejit's blog
No, if all the punters put up their money that's an indication of what way the market's likely to move which is what the traders are looking for and why they're absent until last5minutes.com is in full flow nearer the off. Based on those indicators they'll take down an offer and put it back up at slightly worse odds. No liquidity added there. Your argument is that in their absence nothing would happen so why does the trader reducing the odds on an existing offer make this any less likely.

As far as the mythical filling in of gaps goes, in the unlikely event of there being a chasm between best back and lay odds and neither backers or layers are willing to leap frog offers an increment or 2 in front of them why would traders filling in the gaps make those backers and layers suddenly want to leap frog 10 increments?


Not sure who this was aimed at, but I'll answer from my perspective:

Personally, I don't trade based on where I think the price is going to go. I trade based on where I think it should be. If anything empty markets are great for me, as I will be front of the queue everywhere, and make money pretty much by default. When the site is up but the API is down, my profit expectancy more than doubles, as so many of the main market makers are taken out.

Regarding the last bit of your post, the reason that traders filling the gap, leads to more getting matched, is that many people only take a price that is there, rather than offering. So if the spread is 1.8-2.2, they won't bother offering 1.9, but they might take 1.9 if the spread is 1.9-2.1.

By the way, in empty low liquidty markets, I become a straight bettor. Trading out is difficult, but I have a large margin to compensate.

If more traders competed with me, it would become easier for me to trade out, and I could lower my margins.

christ feck, do you do anything else?

if you put 10% of the time you currently put into this endless futile argument for changes that shouldn't and never wil happen into finding more effective ways to use the system that actually exists, you'd make more money.

so if not making more money is at the heart of your complaint, stop wasting so much time doing something that will never make you a penny.

The Investor: Traders drive the margin down to close to zero

I do not understand why punters w/ opposing opinions don't do this.

In the sport I play, horses, it is highly unlikely that traders have a pricing edge over either the recreational punters they beat or the opinion-winners w/ whom they exchange money.

The traders are either following directional movements (typically cued by information conveyed by the interface), using some technical procedure such as correcting overshoots i.e. range-trading or WOM, or betting right before the off in such a way as exploits people's desire to get a bet on i.e. market-making or scalping / tick-trading on multiple outcomes.

There is almost no sense that the liquidity they have put up has actively tightened the spread and helped the price-insensitive punter get a better price. Traders' whole rationale is to extract a rent from betting activity on the basis of a purely technical operation.

I don't think that the same is true of IR players on continuous action sports, who in leaving up or taking prices at particular points in the game accommodate those who have a different idea of what the odds shd be at that point.

What would have happened in my absence is either the guy on the other side of my bet backing at 12 would have backed at 12, or at 11.5, or not at all. Three options, none of which leave him worse off. So in my absence another (likely successful) trader would have stepped in my place either at the same margin (laying at 12), or a better one (laying at 11.5).

I've no idea the time period between your opening and closing bets or whether you took an existing offer or made an offer on your opening bet so my saying the people at either end of your trade might match each other in your absence may or may not be practical. I think it's a bit of a joke though you saying "another (likely successful) trader would have stepped in my place" (I suppose there's no chance one of the punters who matched your closing bet could've matched it). I'm surprised you've not attempted to guess their name and address.


I earlier wrote
"As far as the mythical filling in of gaps goes, in the unlikely event of there being a chasm between best back and lay odds and neither backers or layers are willing to leap frog offers an increment or 2 in front of them why would traders filling in the gaps make those backers and layers suddenly want to leap frog 10 increments?"

To which you reply

Traders drive the margin down to close to zero,

Regarding the last bit of your post, the reason that traders filling the gap, leads to more getting matched, is that many people only take a price that is there, rather than offering. So if the spread is 1.8-2.2, they won't bother offering 1.9, but they might take 1.9 if the spread is 1.9-2.1.

Did you actually read what I said? You seem to be under the impression that the only people who put up offers are tissue makers and traders. In the morning punters have bookmaker early prices to refer to. Near the off they have sis prices. They've as much idea of what price they're looking for as you or I have. Your theory that traders fill the gap and that it would never be filled in their absence is crazy. You also seem to be under the impression that all tissue makers arrive at the same price, that the mid-point of the spread is in between their universally agreed tissue and so they never participate in closing the gap.

christ feck, do you do anything else?

if you put 10% of the time you currently put into this endless futile argument for changes that shouldn't and never wil happen into finding more effective ways to use the system that actually exists, you'd make more money.

so if not making more money is at the heart of your complaint, stop wasting so much time doing something that will never make you a penny.

I'm touched by your concern pres but, as you can see by this thread, education is a long process. I daresay you're correct though and my argument is as futile as the one I made for years regarding the introduction of a charge along the lines of the pc. Here's another argument you'll be hoping I'm wasting my time with


The all new liquidity generating Premium Charge = (GrossProfit - 5 * CommissionGenerated) / 2

PS Re wasting time

Feck N. Eejit Joined 10 Jan 02 Replies 3156

viva el presidente! Joined 10 Jun 06 Replies 7261

Lori, the reason that traders in horse markets do not participate until late is that they are only then safe to run their technical operations as informed by the information supplied by punters.

What you say about the leakage of info. in horses is broadly correct but very politely put. In any non-elite or major target race, there will be a significant number of horses prepping for another event, running to get their hcap mark down for a touch later in the season, trying new tactics, regaining race fitness, returning after a non-reported operation on wind or a soft palate, wearing first-time headgear, racing after having been extensively schooled or running for their lives. Connections are in possession of this info. and gradually and non-obtrusively try to cash in until right before the off.

Now, racing is a sport where someone who can persistently pick runners with a 12% chance at 10-1 makes 32% at level stakes. But the difference in chances between these outcomes will seem minuscule in pricing up a 20 runner race. Each and every of the runners will be affected by unknown, hard-to-weight and publicly available factors. Because they are on the wrong side of an information asymmetry, good pricers-up (backers, layers or bookmakers) will leave themselves a greater margin (I will lay the horses I dislike--always at least 25% of the book--to small money early before pricing up to 110% as the market starts to form. There will be positions I am standing at the end, esp. on the back side, unless prices have moved in 70%+ of cases to virtually my tissue fair-value prices).

I have the sense that all this will only confirm your preconception of the game as archaic, arcane and bent, but to this I can only say that the range, complexity and human element of the variables involved in its pricing are what to me make racing the most interesting sport.

askari1

The Investor: Traders drive the margin down to close to zero

I do not understand why punters w/ opposing opinions don't do this.

Because they can't profit from it to the same degree traders can.

Feck, how about this in relation to horses?

Bf must be sick of all those adverts 'best price guaranteed', 'bet with the green tick', 'we guarantee to match the prices of any major bookmaker, any bookmaker on oddschecker' etc. when all these bookies are sitting under the bf price and shunting off any winners or price-sensitive punters onto bf.

Someone at bf must be thinking, 'we're not growing and we are a bookmaker. We're paying a turnover tax in Victoria and are not going to get licensed in other jurisdictions unless we present something that the authorities readily understand'.

So why don't they set up the main sports.betfair site as a back-only bookmaker offering recognisable prices to pre-announced takeouts? If someone wanted to lay or trade, they wd have to log into another site, exchange.betfair.com, say, and agree to be registered as a layer once their profits passed a certain level? We wd see whether it's traders who are responsible for fine prices or a difference of opinion among punters.

Meanwhile bf cd blanket the press in ads pointing that the price the fixed-odds books guarantee not to beat is bf's and that they will match any price or make up the difference (they could buy up fracsoft and offer/charge for market snapshots to the sec.)

Feck N. Eejit
I've no idea the time period between your opening and closing bets or whether you took an existing offer or made an offer on your opening bet so my saying the people at either end of your trade might match each other in your absence may or may not be practical. I think it's a bit of a joke though you saying "another (likely successful) trader would have stepped in my place" (I suppose there's no chance one of the punters who matched your closing bet could've matched it). I'm surprised you've not attempted to guess their name and address.


Here's my logic: Most leisure punters take prices, rather than offer. Most successful gamblers will only offer or accept a bet if they expect to make a profit. As the person taking my place on the other side would like me be offering, that person is most likely a trader.


Did you actually read what I said? You seem to be under the impression that the only people who put up offers are tissue makers and traders. In the morning punters have bookmaker early prices to refer to. Near the off they have sis prices. They've as much idea of what price they're looking for as you or I have. Your theory that traders fill the gap and that it would never be filled in their absence is crazy. You also seem to be under the impression that all tissue makers arrive at the same price, that the mid-point of the spread is in between their universally agreed tissue and so they never participate in closing the gap.

The stament "They've as much idea of what price they're looking for as you or I have.", is clearly false. Most punters don't even bother comparing odds across bookies, let alone go through the procedure you describe above.

Rather than 'looking for a price' their though process is more likely going to be, "I think this team will win" and then they back them at whatever the odds are.

Without traders a gap may or may not be filled. But one thing's for sure: It can't be filled by profitable straight bettors, as they will likely both lose in the long run backing an evens shot at 2.02, or laying it at 1.99.

It boils down to this: Traders can profit from stable efficient prices, straight bettors cannot.

Traders could not profit from a bf market deducting commission on a fair coin toss, with 1.98 and 2.02 on opposing sides of the spread. They do not 'contribute liquidity' to exchange games b/c the operator has got there first.

Traders w/ no opinion wd also not like step-changes in prices where in an abrupt, non-orderly way, prices jumped from one equilirium to another (let's imagine this happened three times in a market before settlement). Of course punters (inc. those locking in profits and losses) w/ an opinion wd not mind this.

Horse punters w/ opinions do discriminately take morning prices. In a betting shop opening at 8.30 am, you will get me (sometimes) and a handful of other people taking standout and Pricewise prices or prices b/f they go to work. You then get nothing until 10.30 to 11, where the FOBT players and indiscriminate price bettors start coming in. Traders will play the PW prices because someone has supplied them w/ an opinion. Fortunately for PW, he is paid by results (on largely fictional odds); unfortunately for the rest of us w/ an opinion on f, we have views we are not getting paid for.

The stament "They've as much idea of what price they're looking for as you or I have.", is clearly false. Most punters don't even bother comparing odds across bookies, let alone go through the procedure you describe above.

Rather than 'looking for a price' their though process is more likely going to be, "I think this team will win" and then they back them at whatever the odds are.

This is a really exaggerated portrayal of a group of players you presumably beat and think little about.


In fact I wd say that many shop players are acute and refined judges of events but lose b/c they are irregular players (they have other worries and commitments) and cannot control their emotions.

By 'I don't understand why punters don't do this', I was saying that punters in fact close the spread equally well just by virtue of having different opinions and pricin mechanisms.

Surely (depending on capital employed and number of markets played) a price-taker will do equally well acting to get prices to their tight equilibrium level as a player (this looses assumes the settled level represents fair value).

I can understand that often tight prices don't give the price-taker the margin for error he needs to enter the market, but we are talkig about who and what close the spread in the act of market formation.

* will do equally well as a trader

I don't think my statement about most punters was exaggerated really. Maybe I'm wrong about that, but I just can't imagine there are a lot of people out there taking it really seriously and then going on to place bets at ridiculously bad bookie odds.

Askari, imagine the experiment of putting a few hundred people who don't bet in a room together, and giving them £100 each to bet against each other on a football match. They all offer prices (or take prices) like we do through the betfair interface.

The rules are, they have to bet their £100, and then get to keep the stake+winnings if the win.

What I think would happen is that a few of the people who have a very rough idea of what the odds should be will offer prices. The people who don't have a clue will (if they act rationally) wait for consensus to form on price.

Eventually you will expect these punters with different opinions to come together and close the spread on price. As we've purposely selected people who don't bet, it could easily happen that this consensus price is quite a bit off from the 'more accurate' price on betfair.

The people offering and taking at the right prices, tend to be those people who know what they are doing. So most punters entering this price zone will get picked off by traders, while the straight bettors who are capable of accurately pricing it up stay away altogether as margins are too small.

The investor, the last para. was the bit I said I understood, but yr scenario doesn't really address the issue of how markets come to form. (Although perhaps it does in implicitly conceding that market makers and traders take their cue from people who have an idea of what the price shd be).

Yr closed-room scenario is nothing like any situation in the real world. Horse bettors have a morning oddsline and there is a wealth of information, indluding explicitly on pricing and chances, for football. The RP has started showng which of the teams are fancied by its columnists on the paper's odds box.

Traders can do well from range-bound or directional movements in more or less stable markets, but they haven't been the people who determined where the market shd be.

Here's my logic: Most leisure punters take prices, rather than offer. Most successful gamblers will only offer or accept a bet if they expect to make a profit. As the person taking my place on the other side would like me be offering, that person is most likely a trader.

The stament "They've as much idea of what price they're looking for as you or I have.", is clearly false. Most punters don't even bother comparing odds across bookies, let alone go through the procedure you describe above. Rather than 'looking for a price' their though process is more likely going to be, "I think this team will win" and then they back them at whatever the odds are.

Askari's already taken care of this for me Investor but, to sum up, the first mistake you're making is assuming that these brain deads would bother opening an account with a firm who insist on having such a complicated interface and a commission system that people with maths degrees have problems with. The second is assuming that all traders have a clue about what the odds should be like yourself (an assumption that is particularly hilarious with respect to horse racing). If only it was that easy, stick up a lay at true price, a back a chasm away and traders will fill in the gaps giving you a back at the mid point of the chasm.

Of course, according to you, I'd have to share that back with all other tissue makers who will inevitably agree with me.

Most punters don't even bother comparing odds across bookies, let alone go through the procedure you describe above. Rather than 'looking for a price' their though process is more likely going to be, "I think this team will win" and then they back them at whatever the odds are.

I'm sure even online bookmakers would tell you that is so wrong. Their gross profit percentages are way below the average shop wrt horse racing.

Askari's already taken care of this for me Investor but, to sum up, the first mistake you're making is assuming that these brain deads would bother opening an account with a firm who insist on having such a complicated interface and a commission system that people with maths degrees have problems with

  And still you want to make it even more difficult by introducing hidden queues and some kind of a price auction system ?
   Do you really think that would attract more customers to Betfair ?

In what way would it be more difficult Eddie?

So why don't they set up the main sports.betfair site as a back-only bookmaker offering recognisable prices to pre-announced takeouts? If someone wanted to lay or trade, they wd have to log into another site, exchange.betfair.com, say, and agree to be registered as a layer once their profits passed a certain level? We wd see whether it's traders who are responsible for fine prices or a difference of opinion among punters.

Meanwhile bf cd blanket the press in ads pointing that the price the fixed-odds books guarantee not to beat is bf's and that they will match any price or make up the difference (they could buy up fracsoft and offer/charge for market snapshots to the sec.)

Do you mean betfair would stand the bets in the absence of there being any layers askari? If so, I'd be even more worried about front running than I am now. If not, I think they'd just become another bookmaker you couldn't get on with (early on at least). I think you'd also have to take into account that the more popular a horse is the less it's likely to trade over the odds on betfair.

I guess we just have to agree that we disagree if you think Feckfair would be easier to understand for the average Joe punter.

More stable prices, only prices from previous auctions showing (a bit like the sis show), submit your back/lay along with your min/max acceptable odds (or choose 'auction sp'), no need to play leap frog. What's harder to understand about that?

As I said, I think that's much more complicated that the Betfair interface and it's impossible to know if you are matched instantly.
  No way to know that until the next auction is scheduled.  At least today you can take a price and know your bet is matched and at what price.

You currently don't know you're matched until you're matched. You certainly can't look at the odds and say you'll be matched instantly because of the way they oscillate. Anyway, the auctions increase in frequency the nearer we get to the off. The frequency would depend on how busy the exchange was but if it was as busy as betfair they could be only a matter of seconds apart. Early on it might be once an hour but having a chance of getting your bet matched every hour on the hour is better than watching £2 leap frog for 3 hours and not getting matched.

On the likes of football the odds would quickly find their position and most punters would have little difficulty having their bets matched. No need for smaller punters to queue behind 50K bets or leapfrog them and take less. If the prices on betfair and the auction site were keeping pace the auction site would always offer the best odds as last auction price would be the mid-point of betfair's spread. The commission would also be less because the auction site wouldn't have to cater for traders (that's not to say closing out bets wasn't possible).

Imo your system would be a guaranteed killer for turnover on everything else than horse racing and I also think it would lead to much lower turnover even for horse racing. Would be much more difficult for everyone who try to make some kind of a book/market makers and even if you think they are unnecessary middle men, I happen to think they are important for liquidity.

Cross matching on auctions would remove the need for market makers. They're only there in quiet markets anyway. No quiet markets on feckfair as matching is so spaced out.

They're only there in quiet markets anyway
  Statements don't come much more stupid than that.

  And if I may add, again you assume that Betfair is all about horse racing, which it clearly isn't.

If it's not quiet markets then you're talking about scalpers who were made redundant by cross matching or tissue sensitive traders (small minority who could operate on auctions anyway). The auction idea works equally well on any pre-event market.

In an auction you can stick in a massive bet. Unlikely to be matched unless someone's stuck in an oversized bet in the other direction but it could get matched over a series of auctions. Anyone sticking up such a bet on betfair would just see the price drift away from them and would soon learn they either had to go to the trouble of drip-feeding (off putting in itself) or would just abandon betfair.

Your system may work on horse racing, but I still think it would give less turnover for Betfair, but do you really think it would work on more illiquid markets with multiple runners ?
  Cross matching don't work very well on those markets.

Yeah, Eddie never gets massive bets matched

Eddie, even if it didn't increase liquidity why would taking all the bets matched over an hour in such markets and processing them all at once lead to less getting matched?

Lori, I don't doubt a lot of massive bets are matched but I wouldn't imagine many of them are matched as a result of sticking the wedge up in a oner early on.

Feck N. Eejit Joined: 10 Jan 02
Replies: 3176 18 Mar 11 19:11 
PS Re wasting time

Feck N. Eejit Joined 10 Jan 02 Replies 3156 - all on one subject and all making the same point.

viva el presidente! Joined 10 Jun 06 Replies 7261 - on a variety of subjects, making a variety of points.

btw, if the PC was your idea as you seem to claim (presumably something you knocked up in a spare few minutes when you weren't working on Windows 7), you should really have been a bit more careful and not come up with something designed to suit arbers and bot players. since my induction into the ferengi ranks, I'm actually paying 20% less than before it was introduced. d'oh!

PS - askari, sorry not to reply to your earlier post; even though we disagree, I respect your viewpoint and ability to have a civilised debate in good faith. I'll try and go back and address your points when today's filthy arbing is done, but flicking through this thread, i think Investor's made most of the points I'd want to make.

Feck N. Eejit Joined: 10 Jan 02
Replies: 3176 19 Mar 11 15:21   


Eddie, even if it didn't increase liquidity why would taking all the bets matched over an hour in such markets and processing them all at once lead to less getting matched?

  Because there would be less money in the markets, mainly due to the fact that market makers would hate your "improvements".

btw, if the PC was your idea as you seem to claim (presumably something you knocked up in a spare few minutes when you weren't working on Windows 7), you should really have been a bit more careful and not come up with something designed to suit arbers and bot players. since my induction into the ferengi ranks, I'm actually paying 20% less than before it was introduced. d'oh!

I merely suggested it was only a matter of time before they introduced a minimum charge based on percentage of winnings because they couldn't keep giving traders a free lunch (I was told by traders I was a lunatic). Since everybody (including arbers and bot players) now pays exactly what they would under the old commission system PLUS pc if the latter falls below 20% of winnings, it's impossible for it to have made anyone better off. I'll kid on I'm secretly seething though just for you viv.

PS Keep an eye out for

The all new liquidity generating Premium Charge = (GrossProfit - 5 * CommissionGenerated) / 2.

Coming to an exchange near you soon.

Because there would be less money in the markets, mainly due to the fact that market makers would hate your "improvements".

A market maker is just a scalper who scalps over a period of time rather than instantaneously. If a market maker would've taken a few scalps over the previous hour (or whatever time period since the previous auction) then if the positional players he scalped submitted the same bets to the auction they would all be matched at (overall) better odds.

Note that this would mean they would lose slower leading to greater churn and more commission for betfair. This consequently means I am very nice, altruistic person who likes mugs to get better value. HTH.

interesting read and feck's auction system even though controversial has merit on horse racing...... and i have a feeling feckfair will become a reality on horse racing atleast as betfair is no longers best odds on racing and is losing punters...

It's losing punters because nobody born after the late 80's gives a toss about it

askari1
Date Joined: 29 Nov 01
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When: 18 Mar 11 20:41
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| Topic/replies: 579 | Blogger: askari1's blog
The investor, the last para. was the bit I said I understood, but yr scenario doesn't really address the issue of how markets come to form. (Although perhaps it does in implicitly conceding that market makers and traders take their cue from people who have an idea of what the price shd be).

Yr closed-room scenario is nothing like any situation in the real world. Horse bettors have a morning oddsline and there is a wealth of information, indluding explicitly on pricing and chances, for football. The RP has started showng which of the teams are fancied by its columnists on the paper's odds box.

Traders can do well from range-bound or directional movements in more or less stable markets, but they haven't been the people who determined where the market shd be.

Sure, I just don't think many punters actually utilise this wealth of information. Ladbrokes has removed itself from oddschecker. If anything more than an 'insignifcant portion' of punters actually compared odds across bookies, this would hurt their business. If you went to your local bookie every day for a couple of weeks, you'd probably see the same faces again and again, betting there (almost) exclusively, in the same way they go to their local for a pint, rather than doing a regular scan of beer prices for all pubs in the area.


Feck N. Eejit

Askari's already taken care of this for me Investor but, to sum up, the first mistake you're making is assuming that these brain deads would bother opening an account with a firm who insist on having such a complicated interface and a commission system that people with maths degrees have problems with. The second is assuming that all traders have a clue about what the odds should be like yourself (an assumption that is particularly hilarious with respect to horse racing). If only it was that easy, stick up a lay at true price, a back a chasm away and traders will fill in the gaps giving you a back at the mid point of the chasm.

Of course, according to you, I'd have to share that back with all other tissue makers who will inevitably agree with me.


I'm not saying these people are braindead, more likely they're just not bothered. If they see betting as a bit of fun (which probably isn't a bad thing) they may not want to go through a laborious 'boring' process of analysis. In the same way people that play roulette aren't stupid, even though they are playing a losing game. Someone that is not a problem gambler, but is still losing money gambling, is likely not betting for long term profit, but for fun/excitement or perhaps a small chance of a huge gain at a small cost (lottery), or braggin rights etc.

I certainly don't assume all traders have an idea of what the price should be (especially the ones who trade price movement, WOM etc.). What I'm saying is that I think in many circumstances it makes sense for someone who knows price to trade rather than bet. Especially if you can price up very accurately. If you can put a price up at 1.06 laying and 1.07 backing when you think the correct price is somewhere in between the two, it would be plain foolish not to, as each in isolation is a value bet, and together they create returns greater than the sum of their parts (due to commission savings and reduction in volatility of returns, allowing the trader to use larger stakes).

This whole giving away info by placing a bet thing that you face in horse racing, is much less of an issue in football I think.


Feck N. Eejit
When: 19 Mar 11 11:17
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Most punters don't even bother comparing odds across bookies, let alone go through the procedure you describe above. Rather than 'looking for a price' their though process is more likely going to be, "I think this team will win" and then they back them at whatever the odds are.

I'm sure even online bookmakers would tell you that is so wrong. Their gross profit percentages are way below the average shop wrt horse racing.



I think that's due to the fact that the people placing fun bets, might bet £2, £5, £10 or something similar, while the people who know what they are doing will bet as large as they can get away with. Of course there are the 'whales' who bet large for fun. However I'm pretty confident that if for instance you had data on Betfair customers, you would find that a much larger percentage of customers on 2% commission are in profit on their gambling activity that the percentage of customers on 5% commission.

If UK books didn't limit, I'd be betting thousands with them on football every single day, wiping out the profit they make on a small army of leisure punters.

Although I should add as a caveat that if UK books really didn't limit, they probably wouldn't be as crap with their pricing as they are [;)]

A market maker is just a scalper who scalps over a period of time rather than instantaneously. If a market maker would've taken a few scalps over the previous hour (or whatever time period since the previous auction) then if the positional players he scalped submitted the same bets to the auction they would all be matched at (overall) better odds.

  Feck, once again you show us that you haven't got a clue about betting on here on other than horse racing.
  Who will match these positional players on multiple runner markets where the liquidity isn't as good as it is in horse racing ?

Rocket TTF

It's losing punters because nobody born after the late 80's gives a toss about it



Were you out of the country whilst Cheltenham was on, then?

Feck, once again you show us that you haven't got a clue about betting on here on other than horse racing. Who will match these positional players on multiple runner markets where the liquidity isn't as good as it is in horse racing ?

I think it's you that doesn't have a clue Eddie. If the liquidity isn't good on these markets then presumably the market makers are odds savvy (as opposed to queue leechers) so what's to stop them playing in the auction? Also, as I said, there's every chance backers and layers will be matched with each other directly or through cross matching. In any case, why do you Ferengi apologists always resort to asking what will happen in micky mouse markets that betfair are least bothered about? In such markets the auction will be concealing the lack of liquidity rather than hiding liquidity.

Hello there Feck. I hope you don't mind me asking you a quick question.

Obviously you think that your way of running betfair, or Feckfair as it was aptly put, would be better. As such i am assuming when i use the term better that it would be more profitable, certainly long-term, for Betfair. You also mentioned earlier something about educating people.

It appears at the moment that BF don't currently agree that your changes would be in their best interest, unless you are privy to information about future plans that i am not, so assuming that is the case, BF must be the people that you really need to educate rather than the forumites.

My question i suppose really is how do you intend to educate BF that your way is better for them than theirs?

By the way I am not offering any opinion on who is right or wrong, apologies if there is any insinuation that i am.

Feck N. Eejit
Date Joined: 10 Jan 02
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When: 20 Mar 11 12:07
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Feck, once again you show us that you haven't got a clue about betting on here on other than horse racing. Who will match these positional players on multiple runner markets where the liquidity isn't as good as it is in horse racing ?

I think it's you that doesn't have a clue Eddie. If the liquidity isn't good on these markets then presumably the market makers are odds savvy (as opposed to queue leechers) so what's to stop them playing in the auction? Also, as I said, there's every chance backers and layers will be matched with each other directly or through cross matching. In any case, why do you Ferengi apologists always resort to asking what will happen in micky mouse markets that betfair are least bothered about? In such markets the auction will be concealing the lack of liquidity rather than hiding liquidity.


I used to make extremely consistent profits market making Half Time Score markets in football. I would put up money with a massive margin of safety and usually end up far behind in the queue. As a small percentage of bets got matched though, the consistency of returns in this market type was better than any other, even though profit was fairly small in absolute terms.

If you look at half time score markets now, they are almost as liquid as correct score (much smaller amounts offered, but the spread is similar or better!). Take a look at the Sunderland v Liverpool HT Score market that's on later and you'll see that the market maker has it completely sewn up, creaming the spread with virtually zero gaps, making it difficult for me to compete pre off. This isn't a market haphazardly constructed by gamblers coming together and reaching a consensus on price, although they do of course have a massive influence.

What is his name and address Investor? Seriously though, it matters not. In all probability they'd all still have been matched on the auction.

U.A., TBH I'm beyond caring. My relationship with betfair is best summed up with a few lines from The Good The Bad and The Ugly.

Blondie: The way I figure......there's really not too much future with a sawed-off runt like you.
Tuco: What do you mean?
Blondie: 'Cause I don't think you'll ever be worth more than $3000.

Feck, are you implying you don't believe a small number of players take a disproportionally large chunk of the action (profitably)?

The reason I believe this is that occassionally, I am on one side of more than 50% of volume matched for certain markets pre off in football.

It would really not surprise me if a single person/company or syndicate was matching more than 10% of bets in Match Odds or Correct Score markets.

No investor. Even on horse racing more than 50% of the liquidity is down to a handful of accounts (all positional players I'm led to believe). I'm saying that market makers are still middlemen and that if the people on the other side of their bets submitted those bets to an auction they'd still be matched.

FWIW Feck your whole argument is falling on deaf ears.  Betfair are fully aware the issues and problems long term with the exchange and seem unwilling to make long term decisions.  Simply put, in terms of the exchange, Betfair are making short term decisions to long term problems.

The most recent of which I am unwilling to discuss on here but will do privately if you're interested.

By: This user is offline. Feck N. Eejit
Date Joined: 10 Jan 02 Add contact | Send message When: 20 Mar 11 19:03 No investor. Even on horse racing more than 50% of the liquidity is down to a handful of accounts


If this is true then how can your horse racing auction last?

Put it this way rocket. A rival exchange wouldn't require a mass walkout to take over.

ihatewb, I think most of them have made their dough and are in compuserve mode now.

I've pm'd you ihatewb but I'm off to bed shortly. The league cup final result has sapped the strength out of me.

It wouldnt?

So why will people spend money on your exchange rather than a bookmaker or Betfair?

replied, although as pretty much a technological retard I don't know if I have done it successfully.

Rocket, lower and easier to understand commission, better odds, fairer RF's, able to put in an offer of any size in a oner without spooking the market, more stable prices, no middlemen, no front running, much harder for insiders to monopolise the market etc.

Does that relate to the football markets feck?

Apart from the rf's and the insiders, yes rocket.

Feck N. Eejit
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When: 20 Mar 11 19:03
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No investor. Even on horse racing more than 50% of the liquidity is down to a handful of accounts (all positional players I'm led to believe). I'm saying that market makers are still middlemen and that if the people on the other side of their bets submitted those bets to an auction they'd still be matched.


The way I see it, even a positional player should trade around their position if they can and have the time to (in football at least).

Also a market maker isn't necessarily a middleman. Rather than getting in between player A and B, he might bet with player A, cutting out player B altogether, rather than getting in between the two.

Investor, my point is that if the market maker made a profit then, if all the bets he matched were submitted to an auction, those matched by the MM would be (at the very least) matched by the cross matcher at the MM's odds or greater.

All this is completely going over my head, gamblers, traders, market makers,bots, whatever, i have no problem with any of them.

If a trader enters the market then the market can move against them or for them, whats the problem?

You may gather im not the most sophisticated, well informed user but pretty experienced at what i do and appreciate we all look at bf from our own individual perspective, maybe if your not happy with how the exchange works you should try and develop other methods.

If I lost the power of my legs and made a few suggestions that could further stem cell research would you be on here telling me to get a stair lift fitted?

Feck,

Can you explain exactly how your envisaged auction process would work? Obviously, there are many types of auction process (in fact, the current set up is a sort of auction, where users are constantly putting up back or lay 'bids') and I don't know what you're proposing.

yes, and while your at it become a bf trader ideal job for your condition, work from home/ no mobility issues.

Of course with your GCSE science i would be a fool to not put you forward to be head speaker at the next stem cell conference.

Contrarian, it's a bit like the betfair sp inasmuch as you can request a min/max acceptable back/lay price or request auction sp. Big difference is the offers are hidden and there's a series of auctions that increase in frequency the nearer we get to the off. The only information showing is the auction sp from the previous auctions (guide prices for the first auction). IMO this would accomodate lower and easier to understand commission, better odds, fairer RF's, allow offers of any size to be put into the market in a oner without spooking the market, more stable prices, no middlemen, no front running, much harder for insiders to monopolise the market etc.

Cheers Feck.

What about in-running? Can the same auction process(es) continue there?

That would be more difficult contrarian but not impossible. I've got my own ideas about how that would work but I doubt any fairly run ir market could compete with betfair's cheat based, now-you-see-it-now-you-don't liquidity on the likes of the flies-round-sh1te markets. I'm not going to put up those ideas, or several others I have relating to auctions, up here. The auction idea originates from abetx

http://www.betting-school.com/bet/
2006/04/28/abetx-temporarily-close/

who tried to start up circa 2006 but never got off the ground. I think their idea consisted of a single auction for each event and (as far as I know) there was no auction sp.

I make no apology for not having a clue what youre talking about, why hide information, why not match as and when, whats the benefit of more stable prices why not leave to the free market, let the middlemen grind away a few quid, let people front run then match when they front run too far, how can it be better odds most of the markets are 100% books you want more? how can bf reduce commission will your auction process increase profits therefore decrease punters winnings

isnt it a bit cheeky to think you could run the exchange better.

dont worry about my ramblings, am curious to know how this works in running though.

If the spread on betfair is 3.5-3.6 then anything between 3.5 and 3.6 is better odds. On an auction everyone is matched at the same price. As far as hiding information goes, the tumbleweed in the early markets should be enough of a reason.

Betfair has created an exchange that encourages parasitic activity as well as cheating. Incredibly, they give the parasites and cheats the best deal. When they started up they practically let them use the site free of charge. What's cheeky about thinking I'm above that kind of thinking?

Feck, as regards auctions or the poss. of putting up offers and risking unmatched bets ever catching on with the people we want to be betting against, I have my doubts.

People may need to take a price and know that they have taken a price. Further, losing punters' reaction to price movements is often the opposite of what one wd think it shd be: instead of pressing when on a drift, the punter thinks of the bet as already lost, and instead of considering hedging when the price tightens past what must be an estimate of fair value, the mug punter goes in again.

My positions are too small and too much split across many runners until late that I don't fear front-running in the way you do (or perhaps I am just more naively trusting). I wd have no prob. w/ bf being understood by the public, govt., regulator etc. as no diff. from a standard back-only bookie, nor with their standing liabilities in a structured way at certain times to certain increasing takeouts.

Eddie, I do not see that a liquid and functioning auction system wd be worse for market-makers.

If anything (of course depending on liquidity), it wd give people playing on repeated auctions more of a chance to correct ricks than being taken down in size by Pricewise / Rix lemmings and having to take a loss playing into a new eqilibrium state of the market. B/c this happens, layers do not go up in size early or have more or less equal quantities up across the board (to a greater degree than wd be warranted by diffs. between their tissue and the state of the market).

The investor, the reason that Ladbrokes removed itself from oddschecker is surely the opposite of what you suggest: that they were only getting non-loyal custom from price-sensitive punters for whom their profit margin, if not negative, was a fraction of what they were getting from their regular users.

Taking your closed room scenario, what it seems to suggest is that traders can only step in to offer a not-too-painful price to the general market once the price has been determined for them by the balance of opinion-pricers-up. Since these two groups--traders and pricers-up--are in competition for the same money, it is easy for me to understand that the opinion people are aggrieved that the traders have taken a ride ('a free ride') on their coattails. Of course they wd prefer a series of one-on-one w/ any potential counterparty in which they either do a deal or otherwise. Traders wd presumably be absent from these tete-a-tetes.

Fwiw, in relation to the Investor's sense of the general betting public, my sense of many shop players is that they have a degree of expertise particularly on the horses, but that they' re too irregular to profit from it. There may also be a sense that their shop and work relationships esp.  male camaraderie may suffer if someone wins through skill too consistently.

Let's say that a regular forms the opinion that a certain horse has dropped to a winning mark and, when drawn low, has the ability to sit behind the pace and take a class 5 at Wolves with a single run. Everything happens just as he predicted, but he missed it b/c he was away watching his son in the school play.

As pro and semi-professional punters, we overlook these circs b/c we have been selfish and single-minded enough to make sure that a structured part of our time is devoted to betting. I know that my relationships and even to some degree my business have suffered b/c I've made it clear that I can be unavailable at times I choose. The structure is an essential part of why winners win, but it isn't something given naturally to the vast majority of bettors.

Sorry the Investor, I see you were saying that the very small minority of players who checked oddschecker were bad business for Ladbrokes.

I think it may also be that they wanted to match the prices of bookies on bestbetting b/c their most likely competitors on price wd find it harder to be there too or b/c of commercial relationships.

As far as I recall, the reason abetx had no auction SP was that they envisaged that a large proportion of their userbase wd be traders and cross-platform arbers.

This meant that there had to be a time period when auction players who were on the right side of the market cd lay off into bf or elsewhere.

It makes sense since someone confident enough in their pricing to bet blind into an auction is likely to have a strategy that includes taking the expected profit rather than allowing a bet to run.

askari1

[...]

Taking your closed room scenario, what it seems to suggest is that traders can only step in to offer a not-too-painful price to the general market once the price has been determined for them by the balance of opinion-pricers-up. Since these two groups--traders and pricers-up--are in competition for the same money, it is easy for me to understand that the opinion people are aggrieved that the traders have taken a ride ('a free ride') on their coattails. Of course they wd prefer a series of one-on-one w/ any potential counterparty in which they either do a deal or otherwise. Traders wd presumably be absent from these tete-a-tetes.

Yes, that's right. Although I would add that many pricers up will be trading, simply  because it is the optimal thing to do, so there is no clear deliniation between traders and pricers up.

Because I work to minuscule margins, traders jumping in front of me is only a problem in asian handicap / total goals markets, where if I put up a lay 10.5, someone can jump in front at 10.51 which is a little annoying.

Hi The Investor, as you're working to tiny margins, are yr initial positions determined by an estimate of fair value independent of market movements? I guess that someone cd play this way in IR football--it wd be like have an actuarial table of death ages and putting money down when the odds were out-of-line with the long-run expected result!

Horse bettors have to deal w/ so many unknowns, as Im sure you know, that we need a considerably greater margin of safety. Obviously opinion players on the horses hate being leapfrogged for pennies or front-run. Bf is much more useful as a hedging tol towards the off.

the number of people that have contributed to this thread shows how delusional you guys are about your claims and arguments

Betfair has found the golden eggs and if they move it much more than what they already did...then the eggs WILL rotten...NAP

"dear betfair, please hide information from people so I can get big bets on at wrong prices without having to put any effort in or compete with people willing to offer better prices than me. yours repetitively, feck".

we are socially connected and if the "non-expert" spread the word (that either by pure luck or shrewd choices or whatever) they made money here trading and because of that they will make more people to join in, by simply passing the word

what makes people like me (in my case, that 6 years ago, knew nothing about gambling) come here and a grand majority is the feeling that things are open and more or less clear in terms of betting, if you guys change that there will be no renovation, whats wrong if a recreational punters win?? its what makes the wheel turn, if in casinos only the experts won there would be no casino, period

the world is heading to total globalization so on that basis the numbers will keep growing and growing (and they wont grow on the basis of experts, thats for sure) and i suspect and hope that is the main objective of betfair, grow by the numbers of non-expert people but at the same time keep things more or less clear and straight forward

the more people are here the less the importance (or claimed importance) of people like "feck" will have, they will be nothing but a "tick" in the overall scheme of things

this remainds me of poker

how many poker experts have won the World Series of Poker since the poker boom or even got close to the final table?

nothing but newcomers have won and if there is one in the final table is one too many, the experts dont even get close (at leats in what numbers are concerned) they go down like "flies-around-****" and thats what askari and feck are worried about because they know whats coming

Lusitano, if you're saying that w/ bf the people winning at gambling are not the people who won more than 10 yrs ago, I don't think that's strictly correct. I'm of an age where I couldn't have started gambling more than 15 yrs ago and I've been able to increase my profits (but only by spending increased and not-necessarily-value-for-money amounts of time).

Nor is it the case that a recreational gambler is more likely to take money off a trader than a gambler as a price moves towards an equilibrium level. In fact the reverse is true when the two styles of player have the same bank and expected return per market (i.e. the tissue player will win more infrequently).

I bet by 1) making a book through about 16 hours until the off on 65% of the market when I have the time and 2) arbing and 3) taking standout bets around 150-200 times a year when I don't. Clearly my m.o. depends on many features of the exchange. I'm in broad but not tota agreement w/ feck b/c I understand the point that small-denomination trading away from value prices constrains early liquidity, limits bf's comm. and unfairly advantages traders in relation to gamblers.

The argument is about how (if at all) to reduce traders' capacity to benefit from the information contained in offers already up on the site. It applies exclusively to early prices on horses. Indeed, someone who has found a way on win on football will likely find the reasoning arcane to the point of incomprehensibility.

You are almost certainly right that bf won't be moving to an auction system soon. But they are a bookmaker; their profits are 'wins from punters - losses to punters + costs'. There are many ways they can take more from result-invariant winners. the pc came as a shock to many on here too.

Many of the new winning gamblers are people w/ a financial or trading background who have downshifted to work for themselves. How is coming up aainst their expertise likely to benefit recreational punters?

askari1

The only reason why BF might ever change their present platform is if it dawns on them that their business model is stalling because they are not attracting big players, especially in the horse racing markets where the obstacles to such players have been listed many times.

Personally, I am not convinced that the large sums seen in the football markets are anything other than from big traders otherwise I'm sure that we would have seen much faster profits growth overall and from that segment. Compared to the "under-the-radar" success of BM's like B 3 6 5  who are delivering £100m from a standing start 10 yrs ago, the traditional BM model still has the legs of the exchange model.

Hiding the queue might attract bigger players, who don't want their hand to be seen, and if this assumption is correct, that would be a reason for BF to adapt. Personally,I can't see BF ever adopting the traditional bookmaking model as their culture is now set as a zero operating risk business, with their risk being instead in the infrastructure needed to run an exchange designed to encourage trading. I truly believe that this is their main strategic mistake which has led them to top-heavy costs in technicians and computer assets and a user base which is too good at skimming profits for them ever to be where the growth in profit will come from. That said, I wish I had thought of the idea first!

Sandown, you're right in saying both that bf are wedded to an apparently no-risk model and that their risk lies in having tied themselves to an expensive infrastructure (w/ further expensively goes wrong, resulting in their having to stand SP bet and other risks and give away free bets!)

The Stoke firm you allude to are profitable very much on the back of bf. Bf 1) provide them w/ a more accurate tissue than they cd get from SIS and their own book; 2) offer an 'out' in the form of a very cheap arbing tool shd they ever need it, and 3) represent a dumping-ground for their winners. I have been limited to a derisory 10 pound takeout with the firm whenever I've tried betting w/ them. Meanwhile, bf's relation to successful online-only bm s is very like that of an opinion-player to a trader: neither get paid for the value of their information.

To me, the question is whether there are substantial numbers of people not playing on bf b/c of the illiquidity of the early markets. I'm not sure here: if they all play later, then taht's to bf's advantage as they'll leak to each other and to winners more slowly and keep paying the operator comm. If on the other hand these absent players are so price-sensitive that they wd almost break even w/ bf, there would seem to be little incentive for bf to change its model. To get price-sensitive but marginally profitable custom, you may need the advantages of an ever-present price (w/ rule 4, ew terms, double result etc) of a conventional book.