Betfair trading strategies : offer big amounts in stable market

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pdenoeud
Posts: 71
Joined: Tue Jun 26, 2018 10:37 am

Mon Dec 10, 2018 11:28 pm

Hi all

this is probably one more loosing strategy but I would like to get some feedback.
Let's consider a "stable" market : for a given runner, the price does not move too much but offered stakes are decent, let's say 100 on average, and there are backers/layers matching the offered prices.
Best back price is 1.7, offered stake 100
Best lay price is 1.71, offered stake 100

What about offering a back 1000 at 1.71 and a lay 1000 at 1.7, big amounts compared to the average offers?
I then wait for my offers to get matched. If they get matched equaly, I can wait for one of my offers to get matched fully. If the 2nd offer has been matched partially, let's say 800 matched out of 1000, I cancel the 200 remaining and green up. I get 800 - 200 = 600 ticks of profits.
If on the way I see that one offer gets filled much faster than the other offer, I can still cancel remaining amounts and green up. So for instance if I get filled 500 and 100, I have a 100 - 400 = 300 ticks of loss.

The big risk is that I get one offer filled very quickly and not the other, so I get a big loss. But offering big amounts compared to the one in the market and compare to the market's trade velocity should dicrease that risk. Unless a robot spots my offers and decide its a good deal and takes it all...

It is difficult to test that strategy in real conditions because it involves risking big amounts of money.
I hope I am clear enough.
Has anyone a feedback on that (probably failing) strategy?

Thanks for your help!

Derek27
Posts: 4189
Joined: Wed Aug 30, 2017 11:44 am
Location: UK

Tue Dec 11, 2018 2:39 am

pdenoeud wrote:
Mon Dec 10, 2018 11:28 pm
So for instance if I get filled 500 and 100, I have a 100 - 400 = 300 ticks of loss.
Didn't quite understand that bit. If you've laid it at 1.7 for £500 and backed it at 1.71 for £100 you would need to lay it for £400 at 1.71 to get a £1 free bet, 58 pence green-up. If you're forced to lay it any higher than that, which is quite possible if the price moves you would make a loss, possibly a substantial loss.

It strikes me as quite risky relying on £1000 for security. A bigger trader or gambler could be watching and waiting for money to enter the market and snap up the grand, moving the market in the process. Ultimately the success of such a strategy would depend on where you choose to apply it and at what price, but I suspect it would make a one-tick profit when it goes right, but several ticks of loss when it goes wrong - the old thorn in the scalper's side. :)

Most traders start with small stakes and gain an edge before increasing stakes. With the markets as competitive as they are now it wouldn't be wise to rely on large stakes being an edge in itself.

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ShaunWhite
Posts: 4196
Joined: Sat Sep 03, 2016 3:42 am

Tue Dec 11, 2018 3:49 am

pdenoeud wrote:
Mon Dec 10, 2018 11:28 pm
I can wait for one of my offers to get matched fully.
If the 2nd offer has been matched partially, let's say 800 matched out of 1000, I cancel the 200 remaining and green up. I get 800 - 200 = 600 ticks of profits.
Are you sure about your maths?

Lets say the price shortens....
1000 of the lay gets matched @ 1.70 ( -700, 1000)
800 of the back gets matched @ 1.71 ( 568, -800)
...Net position (-132 , 200)

Equiv to a Lay 200 @ 1+ (132/200) eg £200 @ 1.66

You need to Back to green, 1.70 has gone. So you try for 1.69 .... £3.37 profit.
1.68 would give you £2.26 profit.
With nothing behind your 1000 it might fall to 1.60... £-7.50 loss

A 'perfect' 1000 each side will make you a £10 free bet (£5.59 after comm closed 1.7)

Now try it with 1000 lay matched and 200 back matched
Lay (-700, 1000)
Back (142, -200)
Net pos (-558,800)
Equiv to Lay 800 @ 1+ (558/800) eg 800 @ 1.6975

To green,
1.69 .... £-3.55
1.68 .... £-8.33
1.60 .... £-48.75

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pdenoeud
Posts: 71
Joined: Tue Jun 26, 2018 10:37 am

Tue Dec 11, 2018 8:54 am

ShaunWhite wrote:
Tue Dec 11, 2018 3:49 am
You need to Back to green, 1.70 has gone. So you try for 1.69 .... £3.37 profit.
Indeed, in my calculations I expected to green with a 1 tick gap but it is 2 ticks, at least.
ShaunWhite wrote:
Tue Dec 11, 2018 3:49 am
Now try it with 1000 lay matched and 200 back matched
Lay (-700, 1000)
Back (142, -200)
Net pos (-558,800)
Equiv to Lay 800 @ 1+ (558/800) eg 800 @ 1.6975

To green,
1.69 .... £-3.55
1.68 .... £-8.33
1.60 .... £-48.75
The idea is that the backs/lays velocity in the market is low enough so that I can cancel remaining trades when the ratio matched lays/matched backs get too high or too low, so that I do not get that case.

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pdenoeud
Posts: 71
Joined: Tue Jun 26, 2018 10:37 am

Tue Dec 11, 2018 9:03 am

Thanks Derek27 and Shaunwhite for your answers.
Indeed, the strategy will be profitable only if both offers get filled at the same pace. If one get filled too quickly compared to the other, the result turns quickly to be negative, which would require a high percentage of positive trades in order to be profitable.
On top of that, as Derek27 says, big amounts is not a security, and it makes it difficult to test the strategy with a low risk.

Ok, I'll go back to work to find out another profitable strategy... :roll:

stueytrader
Posts: 422
Joined: Tue Dec 15, 2015 6:47 pm

Sun Jan 27, 2019 8:53 am

Interesting post though, if only to consider the downfalls of small moves as a key to a strategy.

Does anyone actually still do consistently well taking single tick profits, long term? I couldn't ever see it working long term these days, as pointed out above there's always going to be too many times you're left with a multiple ticks loss to balance it out.

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eightbo
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Location: Bristol, England, UK
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Sun Jan 27, 2019 12:41 pm

If we assume all prices contain £100 available.

If the next bet was a £500 LAY, it'd push the price out to 1.75.

If you put your £1000 stakes in place just before the lay bet, the 'surface' price would still be 1.70/1.71 but as you intend to get out, the 'true' price is 1.75, meaning you are currently looking at a 4 tick+ loss, even though your screen says +/- £0.00.

This idea of surface price vs. reality is something you can get a feel for in the wider market too. If you think too much £ may be caught on one side, and you're trading a market which has a closing point e.g. pre-event markets, then you can capitalise on that swing as the price inevitably reverts back to what it should be in the final stages of the market.

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