I thought I'd share what he told me (reproduced with permission):
'Betfair have trading desks yes. But the risk management and the way they trade makes it more likely the were backing the 28-1 too.
Of course it's possible that they were the CP*, but highly unlikely.
Most likely it was a stale price. Would explain why no matter how much it traded the size of it didn't reduce.
Betfair trade by finding value and backing and laying. Rarely take a bet to the end. Always lock in.
If you look hard enough it's fairly easy to spot value. Especially straight after an event (goal/horse falls/etc).
It's the same as regular betting. You wouldn't back something if the odds weren't decent. All about giving yourself an edge.
Like if the odds were X with 10mins to go and a goal is scored you know the odds should now be Y'ish.
Remember they/we don't take the bet to the end we want a quick mis-price, trade it, then get out when price corrects'.
I also asked him:
'Pre-off, if there's no news about a horse re. it sweating up, etc, how would you establish if there's value?'
He replied:
'You wouldn't. Stuff like that you don't trade. If there is no edge you leave it alone.'
I then asked:
How do you know what the true price should be if a goal is scored or a horse is sweating up though?
He replied:
'Don't think it's even possible with horses. And as for the theory for the football there is no way I'm telling how I do it. ; )
Ha! I don't blame you at all mate. No, the guys are traders not gamblers. No edge - No trade. Let Joe Bloggs make the market.'
Any thoughts?
Jeff
