Betfair cross matching explained!

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Euler
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Blog post here - https://www.betfairtradingblog.com/betf ... -matching/

Betfair kindly wrote to me recently to clarify some key points around cross matching. This explains how cross matching works in general, but also how orders are specifically matched which is new information to me. So I felt I should share it with you. Many thanks to Betfair for providing detailed clarity.

It's easier to focus on a two runner market to explain cross matching as it gets more complicated when you go above this value.

Two runner cross matching

Conceptually cross matching is very simple. If you want to back a selection in a 2-runner market, there are two ways that we can get your bet matched: against a layer of that same selection, or with a backer of the other selection. For example backing Djokovic at 1.5 is identical to laying Murray at 3.0.

When you place a bet, instead of considering just one of the sets of unmatched bets with which Betfair could match you, we consider both. If you place a bet that isn’t immediately matched, we advertise it to other customers both ways that we could match it.

There are two ways we could match you, so we display both on the site to give you the best chance of getting matched. These bets can be matched in exactly the same way as any other bet.

How bets are matched

Betfair confirmed to me that when bets arrive on the exchange they will be matched in the following manner: -

(1) Price
(2) Where prices are the same, lay bets against back bets in preference to cross matches
(3) By Bet ID (i.e. in time order)

In other words every time you place a bet we look at the regular match (back vs. lay), and cross matching only comes into play if that would get you a better price than a regular match (or if it matches a bet that would otherwise remain unmatched).

Reciprocal pricing

To answer what happens at odds which don’t have a direct reciprocal on the odds ladder, an example would be useful.

If you attempt to back Djokovic at 1.98 for £50 and your bet is initially unmatched, then we can show that to other customers in two different ways: £50 available to lay Djokovic at 1.98 of course, but we could also show it as available for Murray backers.

2.02 is the best price on our ladder that we could offer, for a stake of £49.01. So we could match a Djokovic backer for £50 at 1.98 with a Djokovic layer for £50 at 1.98, or we could match a Djokovic backer for £50 at 1.98 with a Murray backer for £49.01 at 2.02.

If you go back to the matching order answer above, you’ll see that matching lay bets against back bets in preference to cross matches means that if we have the choice of a cross match that makes us a penny or a regular match that doesn’t, we always do the latter.
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LeTiss
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In all fairness Peter, that's nothing new. We already know that's exactly what happens on a straight 2 horse race.

Where it gets very unclear is when XM is on 3+ runners, or on related markets to the one your involved with. This is where people start questioning how their bets are being filled, or why the matched figure shows they should be getting matched, but are not
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Euler
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Happy to take feedback back to Betfair
PeterLe
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One question i'd like to know too please..

If for e.g. a bet is placed on selection one, but matched on selection 2 as a result of the cross matching algorithm ....against which selection is the Volume recorded against?

Thanks
regards
Peter
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Dallas
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PeterLe wrote:One question i'd like to know too please..

If for e.g. a bet is placed on selection one, but matched on selection 2 as a result of the cross matching algorithm ....against which selection is the Volume recorded against?

Thanks
regards
Peter
That's always been my main query with it
Lammtarra
Posts: 74
Joined: Sat Jun 29, 2013 12:16 pm

It's things like this that illustrate just how little I know.

Bearing in mind I've been on Betfair pretty much from the start and bet, traded, layed thousands of races over the years, I still, despite reading it again and again, don't really get it which is both dissapointing to me and annoying.

I specifically read this with interest because I thought it's something that I should learn about so I fully understand the mechanics of the market and BF but no, it might as well have been written in a foreign language.

I'm not asking anyone to explain this to me. I will do my own research on this and on my thread next week, I will post up what I believe XM to be. It is very tempting to just forget about it, "it doesn't affect me" "what do I need to learn about it for?" but I hear about it all the time and know that I MUST make an effort with things like this to build my knowledege.

I'll treat this XM thing as a little bit of trading course work to hand in next Monday....
PeterLe
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Joined: Wed Apr 15, 2009 3:19 pm

Cross matching was introduced on the 24th Nov 2010 (?) and I remember the build up wondering what would happen (there is a tread on here somewhere)
This explains what it is and is the best explanation Ive seen:-

https://api.developer.betfair.com/servi ... rtual+Bets

Although its a straight forward calcualtion; it seems to behave differently these days that when introduced originally.

Here is a video I did at the time (Pause the video as it plays and you can compare the subtle differencesin odds/money avail at those odds between one account with Cross Matching and one account with no cross matching)

https://www.youtube.com/watch?v=3njy483sL-w

Once you understand how it works; you will drive yourself mad trying to work out how to exploit it! :D
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LeTiss
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Very interesting YT video from 53 year-old PeterLe ;)

At 9secs you see what a major difference it makes - the 2nd Fav with XM has WOM which is so different it's remarkable - the two scenarios would make automated strategies, or indeed human beings place completely opposite entry points
PeterLe
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LeTiss 4pm wrote:Very interesting YT video from 53 year-old PeterLe ;)
Yep Im a grandad now mate! :D
Lammtarra
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Thanks for that Peter,

When I get home later, I look into it in depth.
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Euler
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Betfair wrote:Hi Peter,

Volume is always the total of customer stakes matched. Cross matching doesn't change that at all.

So if we match a £10 backer of Federer at 3.0 with a £20 backer of Djokovic at 1.5, then Federer volume goes up £10, Djokovic volume goes up £20, and total market volume goes up £30.

It's exactly the same if we match across markets - the volume is the total of customer stakes matched on that selection in that market.
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Dallas
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Thanks for that peter, So if I offer £1k on selection 1 and it's all matched via xm somewhere on selection 2 then nothing will show as traded on selection 1 and £2k will show on selection 2

Have i got that right?
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LeTiss
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If I back Djokovic for £30 at 1.50, but only £20 is available, the other £10 might come from laying a backer of Federer at 3.00

According to BF my £30 would show £40 matched on Djokovic and £20 Federer, as opposed to what I'd expect to see, which is £60 matched on Djokovic

This doesn't explain though why I can see my bet sat waiting on a selection, and the matched figure for that selection is indicating I should be getting matched, but am not
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Dallas
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LeTiss 4pm wrote:If I back Djokovic for £30 at 1.50, but only £20 is available, the other £10 might come from laying a backer of Federer at 3.00

According to BF my £30 would show £40 matched on Djokovic and £20 Federer, as opposed to what I'd expect to see, which is £60 matched on Djokovic

This doesn't explain though why I can see my bet sat waiting on a selection, and the matched figure for that selection is indicating I should be getting matched, but am not
That was going to be my follow up to my first question above

If i put my £1k in a que of £2k regardless of how that money was made up (direct on that selection or xm from other selections) According to BF replies all bets are still matched in there Bet ID order and only money matched on that selection is shown on its traded volume.

So at worst if every penny was matched on that selection £4k should show traded then mine is next, alternativly a less amount can be shown if a percentage of the XM money was matched else where or some of the money placed on this selction was shown elsewhere and XM there - but there should NEVER be a instance when the traded volume exceeds the amount (or twice the amount) which was showing on the selection when my oder was added.

It would be good if someone has a video showing a figure waiting then more than double that increased in the traded colum and their money still not touched and for betfair to comment on that.
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LeTiss
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Yes, exactly right Dallas - any discrepancies on a selection's matched volume through XM, should only show a lower amount required before you get matched, NOT a higher amount.

Unfortunately, this traded volume glitch happens often, and that's where the finger pointing occurs with regards to how BF are managing the matching of bets
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