I’ve spent a lot of time looking at Betfair SP and trying to find a useful way to utilise it. Having found a couple of useful ways of putting it to use I also discovered a fairly critical flaw. It turns out that SP or “starting price” to give it its full name is actually nothing like a starting price it should called an “early furlong price”.
The issue revolves around the time delay between a race getting underway and Betfair suspending the market and resolving the SP. There is a 4-6 second gap between the race starting and Betfair suspending. On shorter races where a horse misses the kick, has a problem or unships its rider it is possible to horribly manipulate the SP price. I first noticed this when it happened to me. I put a small bet in on SP to trade out in play it the SP returned at a price that was way off the last traded price, I lost £100. Of course this happens using conventional mechanisms but the problem is easy to solve, you simply exit your position a little bit earlier say when the second horse is due to load. Use SP however and the price will only be resolved when horses are about a quarter of a furlong out. Coupled with other issues, more about that some other time, this represents a pretty nasty flaw.