Market manipulation on Betfair

News, chat and debate about the Betfair betting exchange.
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Euler
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I want to canvas traders on their views on market manipulation on Betfair.

(1) Do you think that market manipulation happens on the markets?

(2) What form do you think manipulation takes? I.e. can you describe it?

(3) How does it affect your trading?

(4) Do you think Betfair care about manipulation, what do you think they do about it?

To gauge your strength of feeling it would be useful to score your views on each topic.

I.e. on a scale of 1-10, on the first topic - 10 is I think manipulation takes place all the time and 1 there is none. Then you can go onto to describe what you think on each topic.

Your views would be welcome
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SeaHorseRacing
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1) Yes (10)

2) False sense of security. (5)
Bluffing (10)
Bullying (10)

3) It enables me to profit. (5) However I think on the times its causes me a loss.(8) I believe the losses out weight the wins unfortunately.

4) No betfair do not care about manipulation- They should stop it at all costs. I dont believe they even look into it.

Market manipulation distorts a public view of genuine honest competitive sport.
Personally- Just as bad as match fixing.

If player are expected to pay tax (PC) then Betfair should police the markets. Even though we are trading at the end of the day the market is a reflection of the sporting event and should truly replicate an overall public view.
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LeTiss
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1) Do BF manipulate the markets - Yes = 10

2)Explanation - My main bone of contention is XM. I believe the markets were fairer and easier to read before this was introduced. As a long standing trader, there are times when I cannot understand and do not believe what I am witnessing = 7

3) It impacts upon your confidence in the market, and certainly your trust in BF = 6

4) BF have changed in the most grotesque way. They don't give a shit about their customers. They only care about the Sportsbook now - the Exchange is simply seen as the gravy that tops off their roast dinner = 10
sora
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1. Yes (10)

2. Spoofing/Layering/Bluffing - placing large orders on one side of the book to push the price the other way. In financial markets these are defined as orders which are placed without the intention of being matched. Other types of manipulation almost certainly take place but this is the main one I encounter day to day.

3. It helps me slightly as the reaction in the market is usually predictable.

4. No, Betfair don't care. It would probably help them from a business point of view if they did, as less spoofing would encourage more real volume in the markets.
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Dallas
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1) Yes i think it certainly goes on in some markets (9)

2) The most obvious is when people put large amount of money just outside the price with no intention of wanting it matched, the only purpose is to either hold the price or trick others/bots into triggering, the flasher springs to mind (8)

3) It does nt really bother me I just try and work and adapt to what i can see weather its a manipulated market or not, if i cant work it out I just leave the market alone (2)

4) Don't think they care at all, i would be surprised if they even acknowledged it happens (10)

;)
hgodden
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Joined: Thu Apr 16, 2009 2:13 pm

I think this is a great idea and IMO betfair are blissfully unaware of a lot of what goes on on the exchange, how their pricing policies actually cause a lot of it and how ironically it ends up costing them money.

I'll do an in depth write up by the end of the week when I've got the time if this is still open
marko236
Posts: 737
Joined: Fri Jul 12, 2013 11:54 am

1.. Yes 10

2.. Using large orders to hold market, any sign of it getting taken it's removed, also pushing the price around to see if they can trigger stop losses and try and get rest of traders to join in beliving theres a move on.

3.. Early days (10) got shafted alot! Now not to often (2)

4.. Good chance they are pc payers so Betfair won't care what they do.
steven1976
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Joined: Tue Jan 19, 2010 6:28 am

1) Whenever money is involved there is going to be manipulation.

2) The main manipulation i see is, self-matching own money. This can do many things but the main thing is to control the flow of money to create an impression of something happening and to hold smaller traders in a losing position for longer periods. It's quite easy to see on weak football markets such as football.

If you back for example 50 pounds of money on offer on a football game with the price coming in due to time stamp, a bigger amount of say 1000 pound will appear on the lay side to scare away others and hold the small punter in a losing position for that extra little bit of time and keep them exposed for a little bit longer. This 1000 pound is not simply removed, it would be matched down at a pace to suit and then a new 1000 pound would appear at a price just below. If it’s a tight spread and you enter a back then they can match up through the money behind you in a queue (their money) and hold your original back in a losing position short term, to force you to either sell at a loss or sit and wait for time to pass but keeping you exposed for a longer period of time. Obviously the final outcome can't be changed but it is just about keeping a small position in a negative position as long as possible.

Self-matching can also be used to create new price points and can be seen in horse racing. For example, I enter a 100 pound lay on a low priced horse say at 1.4 and then the market enters a lay amount is entered say for 5K at 1.37, and all of a sudden a big back bet comes in for 25K taking out the money at 1.37, 1.38 .1.39 etc… and shows a matched bet at 1.37 for 10K looking like someone is aggressively trying to back the horse whilst showing a large amount to hold down the market which people will jump in front of when in fact nothing has really been matched other than my 100 pounds and leaves me in a position of deciding to sit and wait and hope it comes back or sell out. At the same time, if you add others into the mix it appears that a big backer is in the market and people try to jump in front of the big amount in the gap for a quick scalp

If there was only actually the market maker and myself in a market there would be no reason for that market maker to actually move that position into a losing position until they see how the race is going. If the horse looks like it is running well they can keep it in a losing position and the small trader can either sell at a loss or take a gamble and hope the horse fails. If the horse starts running badly they simply slowly move the price up matching their own money to create a new price point.

Could also be used in football. If you set up a row of money say lay bets at 1.4-1.5 if someone came and put 1000 pound at 1.45 thinking there was lots of other money around and then a 30k back bet took out all my money queued up from 1.4-15 it appears a big bet happened but in fact all i would have done is match all my own money and the loser who stuck a 1000 at 1.45 and then hold the price down with 20 k and make them decide do they gamble and leave it and hope for a goal or do they sell out at a loss.



(3) How does it affect your trading?
Badly! I'm a gambler at heart.
In football i do what they do and set up multiple positions so that if they move through my entry position, if they take the next position I can sell both positions quickly at a profit if I can get the opposing position at the front of the queue before they get it. For football they can only really move it 3-4 ticks because anything to large would have someone willing to take it on and sit and wait I feel.

(4) Do you think Betfair care about manipulation, what do you think they do about it?
No. They want 60 % payers to win all the time as it realizes their profits quicker. The last thing they want is some punter coming along with a 200 pound bank and slowly winning and paying them a 5% commission. It would take 12 times longer for them to earn the same money and therefore I'm sure they would be happy to allow high PC payers do what they want and they have free staff rather than paying staff to do the same job
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boardrep
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(1) Do you think that market manipulation happens on the markets?
Yes-10 -I now see it in pretty much all sports.It appears to be more prevealent in the high liquidity ones ,Ive seen it in smaller markets too such as Darts ,NFL.
(strangely enough I dont see it so much in the biggest all all but maybe it gets lost in the volumes... :D )
(2) What form do you think manipulation takes? I.e. can you describe it?
Various Forms ,I guess its less sinister when its a trader trying to get a price outside of the level in markets we all do that to a degree however the blatant spoofing by the Tennis W***ERS(in my early days I called them when I used to get spoofed) is pre planned en masses automation to trick the small trader into a market move in the wrong direction,its so obvious after a while but it will catch new traders or ones not watching a decent TV stream.Im not sure if this is a syndicate or just an angle othere TW have copied as it will be very lucrative.Another is as already mentioned large sums holding a price in the market especially pre race/in play on horse racing and the most obvious pre match footy trading (big games)where either one person or a syndicate is holding the price for a large sum at 3 and 4 ticks either side of the market then let go one way or another once the money builds up,to them have a match on the other side.
Finally Ive seen markets suspended or slow down,Lag at straglely convenient times would be one more but maybe thats just me being paranoid and spending too much time alone :)
(3) How does it affect your trading?
its just another angle that you have to learn to work with/against to make trading work for you, as mentioned already said in certain cases you can make it work to your advantage .......D .If you cant I guess the answer would be stay out of the worse affected markets:
(4) Do you think Betfair care about manipulation, what do you think they do about it?
I just see my task as to try to outwit the TW and spoofers where I can to adapt as required .....The game changes and if BF dont care which I dont see why they would(they would only care if they think it affects their profits by losing major income streams) ,I need to keep changing my game to adapt to changing market conditions.

Good thread though guys
steven1976
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Joined: Tue Jan 19, 2010 6:28 am

The part about the markets suspending at lag is something I forgot to mention also. It's amazing how many times the suspend monkey manages to suspend it at the exact time money hits the market and a big opposing bet to your own comes in.
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megarain
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Steven .. Your initial post re building several positions, was 100%.

The mkts I specialise in, has a mkt maker, definitely matching his own orders, and the way to combat it, is to leave orders, at 5,10,20 ticks under current mkt price.

If he wants to sweep, then, I don't mind .. Sure u are exposed, but, u have value.

I will do a longer answer to the original question, when I have access to a keyboard.
RalfusDawes
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Joined: Sun Feb 23, 2014 5:09 pm

1) Yes, (10)

2) I mostly trade horses, so can only comment on this market. I often notice spoof orders, sometimes large and lasting a second, usually smaller and pushing or holding one side of the market. I'm also noticing large orders left in the lay side of the market, sometimes in-play. As the money isn't removed, or moved to get better value as prices fluctuate, my gut instinct is that it's money dumped by a bookie. Coincidentally, I noticed this in the Betfair app directory: https://apps.betfair.com/commercial/xc-epos/

3) As I've just started dipping my toes back into trading after a break, my confidence has been knocked a little. I'm not sure if there is more manipulation now, or if I'm just rustier than I thought, but it does put me off. Although I enjoy the challenge of learning and adapting to market changes, and finding new opportunities, I have to ask myself the question: do I continue to trade manipulated markets, or go back to basics, and concentrate on advantage betting and value bets? Might be less profit, but less stress too, and more free time.

4) Does Betfair care? No. If enough of the 'small fry' like myself got scared away and liquidity dropped noticeably, would they care? Probably not, they could just increase the PC to compensate.
dannn
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My theory is that some traders (probably in house traders), have leveraged access to BF exchange markets.
Wouldn't be surprised if they got idea from forex brokers who offer 1:50 or 1:200 leverage. That gives impression of much higher liquidity. Add self matching to that as well.
That could explain why even major festival markets are much jumpier than previously.
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megarain
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Market manipulation on Betfair
Postby Euler » Mon Jun 13, 2016 3:32 pm

I want to canvas traders on their views on market manipulation on Betfair.

(1) Do you think that market manipulation happens on the markets?

10 .. Manipulation is happening all the time.

There are traders who have models, and want to push a mkt a certain way. Just how much they want to push it, becos they want to 'get on', and how much, becos they want to trap weaker traders, is debatable. On balance, I would give them the benefit of the doubt, and say mkt manipulation, as a bad thing, happens less than u would think.

(2) What form do you think manipulation takes? I.e. can you describe it?

The MM typically offers large chucks of volume, within a v tight spread. If u try and trap him .. By taking a large bite, he runs away for a bit, before coming back.

(3) How does it affect your trading?

I think it helps. Matched liquidity numbers have gone thru the roof .. Which, may be a mirage, but, it still creates a platform, where traders can take v deep positions, and know, there is a point u can get out, if u really want to. Recently, the MM has been less aggressive .. In that the price maybe only, 5 ticks off, what seems right. In the past, , it was 10-15 ticks off, and stayed that way, for 2/3rds of the game. He never let u out.

(4) Do you think Betfair care about manipulation, what do you think they do about it?

Betfair seem a v odd company. One day .. Stories might be told. I wouldn't do it, in an open forum.

To gauge your strength of feeling it would be useful to score your views on each topic.

I.e. on a scale of 1-10, on the first topic - 10 is I think manipulation takes place all the time and 1 there is none. Then you can go onto to describe what you think on each topic.

Your views would be welcome
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LeTiss
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I am assuming btw, that the reason PW started this thread is because he himself is starting to see things, that in his opinion go against the historical effiency of BF markets
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