Posts Tagged exchanges
A question of scale (part one)
Posted by Peter Webb in General, Trading strategies on February 4th, 2012
I got a phone call from the Financial times the other week about the collapse of Centaur. They wanted to know how I knew it would collapse long before it did, they originally phoned me for an opinion when Centaur first started up and I told them then what I repeated recently.
When you looked at the proposition there were in fact many, many flaws in there; but the top one for me was one of scale. Mainly because I’ve experienced that first hand.
The betting market is like a financial market in some ways but in other ways it is definitely not. In financials you can scale to billions over many years, the sky literally is the limit in a global economy worth trillions. The sports market is no where near that, but it’s scale will typically suffice for most individuals. The key problem you find in a betting market is that when you increase stakes you actually end up influencing the outcome, especially on exchanges. This puts it off limits to institutions unless you run the mechanism and are guaranteed a profit, like err.. a bookmaker / exchange.
In a market of limited scale the more money you have the less likely you are to see a return. More money equals less chance of a positive outcome, not more. So this was a key reason why I felt something set up to raise money to use in a betting market would fail. That much money would be a burden, not a benefit. Anybody who has uncovered something that works will confirm exactly the same finding. On betting exchanges I touched my limits some time ago with a relatively small bank, that’s why I’ve continued to invest in financial markets for years; as I am some what below the scale where diminishing returns kick in. With a lack of core growth on exchanges it wasn’t difficult to bump up against those limits. That’s not a problem for individuals but I failed to see where that sits for larger forms of activity.
There’s your starter for ten, I’ll explain more tomorrow after I clear the forecast snow from the drive!
It's easy to choose the wrong scale
It’s jungle out there
Posted by Peter Webb in News on December 2nd, 2011
Another week and another amazing betting system drops into my inbox.
Each one is similar to the last, as for only a few quid, limited to just a few people; you can have a system that requires little work yet prints money. Sounds fantastic, but as we all know it’s just not true. Why sell something for a fraction of the profit it allegedly generates? Just doesn’t make any sense.
In the past I have noticed that most of these systems are simply ebooks or manuals of one sort or another, but increasingly you are now seeing software being touted with these systems.
When you receive these new mailers it’s difficult to believe any of the claims. But furthermore, when you dig deeper, you often find the individuals involved have done their best to hide their identities. Doing a ‘who is’ on the domain reveals nothing. Asking, enquiring or trying to dig for a contact equally draws up a blank. So, my point….
There has been a lot of talk and incidences where betting accounts are being actively de-frauded. We were all alarmed to learn that Betfair will not refund in these cases as they are not taking counter party risk, yet. Therefore, could you realistically use software where you can’t see it has been approved by an exchange, has no track record and you can’t even find out who made it? Coupled with extravagant claims, it’s not really worth the risk is it?
I know most readers of the blog will not be in the group of people that could be suckered by these things, but if you know somebody that could be drawn in. Give them a gentle reminder and save a lot of possible heartache. At best we may move to a situation when everybody understands the risks involved and maybe get some formal involvement from the exchanges themselves.
Given the risks, he is probably a better bet.
That’ll do nicely
Posted by Peter Webb in Bet Angel on October 17th, 2011
I had a feeling Saturday would turn out to be an interesting day, so I pulled out all stops to take advantage. I did well and it was a real pleasure to net my best day ever (At least before commission).
I managed to pick up a lot of decent results from a wide spectrum of events on both exchanges. Thanks to favourable commission rates and favourable liquidity conditions on Betdaq, it meant I found it pretty easy to beat my post commission Betfair totals on a lot of events. Overall I’m really chuffed with how it went. I’m picking and choosing my targets nowadays, so I’m glad I got Saturday just about right.
I’d happily recommend using both exchanges now, as I think both are perfectly tradable. I may not have said that a couple of years ago. It’s a big positive that we have two viable exchanges now. Yes, liquidity is lower on Betdaq, but it’s growing and there are fewer strange things going on over there, which makes it a bit easier. That also means the actual fill rate is higher in a lot of cases and that reduces overall risk. I note that different sports are at different levels of liquidity at the moment. But if history is anything to go by I think that may change. I guess either may suit different people and styles, so I suggest you try both. However, if you run both versions of Bet Angel next to each other you can see that both exchanges more or less track each other, but sometimes they do slip apart.
Betdaq is used by the vast majority of on-course bookmakers so you can possibly see some late hedging going on now and again. But more or less they are similar. A price held up on Betfair very often does the same thing on Betdaq, but at that point Betdaq often shows a ‘cleaner’ path forward. In short I think it’s worth having both up now as you can get an extra dimension to the markets.
The market is an ever ebbing and flowing tide so I’m always on the look out for anything that is changing shape or form. I’ll keep you informed. Something curious happened to me recently, I’ll see if I can post up later this week.
Anyhow here are a couple of highlights from Saturday. I’m going to talk about these at my next course on the 17th November. These were NOT the biggest results of the day, but there were two of the most satisfying:-
Good approach
Posted by Peter Webb in Golf on August 3rd, 2011
Looks like it will be the last day before the glorious weather breaks in the UK so went out to play some Golf with my son this morning.
A good approach on the seventh left me in the middle of the green but with a tricky put for an birdie. Almost the perfect put, but the ball stopped just short of falling in the cup. No amount of stomping on the green would make it fall in, so I had to settle for some appreciative comments from the group in front of me.
Got back to my desk to see Betfair had deducted the super premium charge. I experimented last week to see if value seeking, straight betting and/or arbing may help offset some of the charge. I just messed around with small stakes to experiment. Unfortunately last week the ‘wrong’ things won and Betfair stung me for a total of 65% of my profits! The problem I now face is that I am in deficit and the same could happen again this week, leaving me further behind. I am sure there is a better way than this Betfair? Hmm, back to the drawing board.
The good thing is that I am still finding it fairly easy to find opportunities in all markets and on both exchanges. The recent increase in liquidity on Betdaq has brought a number of new strategies to the fore that were not there before so I’m quite fascinated by that at the moment. I am currently measuring and collecting a whole range of data at the moment and I am revisiting data that I collected back in 2004 from Betfair as that is proving useful on Betdaq. Onwards and upwards!
You don't need to be this clever to uncover opportunities
Online betting tax imposed
Posted by Peter Webb in Bet Angel on December 8th, 2010
Stark headline for a lot in this sector, but in the latest austerity budget in Ireland there were proposals to level out the playing field by introducing a new tax on phone and Internet gambling. As always, details are a bit sketchy at the moment but shops have been taxed for sometime but other channels not, so this is addressing that discrepancy.
Quite how it will work and be enforced is difficult to see at the moment, but it will be an interesting move to watch. It’s really difficult to now how it will affect exchange users, but the Irish government have confirmed the application of this to exchange users will be different to other forms of gambling. Let’s watch how it unfolds.
Existing Irish bookmakers were very guarded in their response.
Underrated strategy
Posted by Peter Webb in Bet Angel on August 27th, 2010
I covered the ‘lay the field’ strategy in some depth in racing ahead magazine a couple of months or so ago, it’s an easy strategy that works well and has been popular amongst exchange users for years. On Bet Angel you just need to set the odds, a value and click to lay the field.
To make it work, all you need to do is look for a market with a great deal of uncertainty about it. One market that was well qualified recently to fulfil this criteria was the Aston Villa next manager market. In fact most next manager markets exhibit similar characteristics and you can profit if you lay the field early on in these markets. A competitive handicap in racing over a short distance can also be fun!
Currently in the Aston Villa next manager market, these are the lowest traded odds: -
Bob Bradley – 1.43
Sven GE – 2.00
Kevin MacDonland – 2.32
Martin Jol – 5.00
Gareth Southgate – 6.00
Laying the field at less than 3.00′s would have been a viable strategy here and it’s possible that others may still come into contention.
A worthwhile strategy in your armoury.