Liquidity taking strategies

The sport of kings.
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Kai
Posts: 6095
Joined: Tue Jan 20, 2015 12:21 pm

MacrcoPolo wrote:
Mon Apr 20, 2020 4:24 pm
That would vary substantially depending on the skill and style of the trader. Scalping would return a small % profit whereas a trader who gets on steamers and drifters could potentially have a much higher return on turnover.
Let's rephrase into something absolute:
1. How much are the largest traders (pre off only) by profit in the market earning?
2. What fraction of the volume does the highest turnover trader execute?

Guesses are welcome, plus I want to generate some discussion on the size of the opportunity in these markets. Plus some gossip about 'what people have heard'. I don't know any other sports traders personally, so appreciate some of this info is probably sensitive.
If you're asking how much money there is to be made in prerace markets then only you can answer that, for most people the answer would unfortunately be zero.

If you're looking to talk ballpark figures which is not an easy thing to do you can just look at some of the P&L's that get posted around, judging by those you can see a prerace trader can maybe on average make 500-1000 on an average day of racing, with any three figure result on a particular race being generally considered a good result. Some are happy to go above three figures a day period, while some are happy just to end the day in profit.

I sometimes hear this question from outsiders looking in, they want to know how much money there is here or there before dipping their toes in, because they have no idea since there is very little transparency overall and too much misinformation, but there are no absolute answers here.

Usually what little transparency you get is only from people that benefit from being transparent, if they have a business to run or such. But most traders are well aware of the size of these markets and the size of opportunity, no need for any guesses. I know it's difficult to know which sources you can trust but just try to use common sense, if someone is running a legitimate business then they should be a trustworthy source, and if someone is not then you are allowed to be sceptical.

Hope that helps.
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Derek27
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Joined: Wed Aug 30, 2017 11:44 am
Location: UK

MacrcoPolo wrote:
Mon Apr 20, 2020 4:24 pm
That would vary substantially depending on the skill and style of the trader. Scalping would return a small % profit whereas a trader who gets on steamers and drifters could potentially have a much higher return on turnover.
Let's rephrase into something absolute:
1. How much are the largest traders (pre off only) by profit in the market earning?
2. What fraction of the volume does the highest turnover trader execute?

Guesses are welcome, plus I want to generate some discussion on the size of the opportunity in these markets. Plus some gossip about 'what people have heard'. I don't know any other sports traders personally, so appreciate some of this info is probably sensitive.
I'll leave one of the big traders to answer that or post a P/L shot if he wants, but as a matter of interest, how would you find that information useful, or are you asking out of curiosity?
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ruthlessimon
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Joined: Wed Mar 23, 2016 3:54 pm

MacrcoPolo wrote:
Sun Apr 19, 2020 10:23 pm
does anyone actually run any profitable strategies in these markets that exclusively take liquidity only?
Yes

Context & niche are really important though, as Euler will attest. Personally, if I'm going for a GB/IE swing & I'm filled easily - it's a dangerous sign. Generally speaking the best trades for me are when I take, then the tick instantly fills-up behind me.
Euler wrote:
Fri Mar 29, 2019 7:39 pm
I'd need more context TBH, but fast-moving markets were you 'know' direction it would make sense to jump in.
& as a side, like Kai mentioned - a strategy that is shown to work @ market is a powerful lil' edge
Kai wrote:
Mon Apr 20, 2020 1:31 pm
Obviously with a strong enough edge you can take prices on offer
rik
Posts: 1583
Joined: Sat Jan 25, 2014 5:16 am
Location: London

I think shouldn’t necessary focus on percentage edge, scalability often more important. If you had a bot that was scalping for a tick half the time, scratching 25% and losing a tick 25% of the time thats good if it works on many runners/markets/sports simultaneously and you can place decent amounts even though edge on turnover will be very low.
Percentage edge on total turnover will geberally be very low if you do mostly market making in liquid markets but i sometimes had 2,3,4 percent market share in big turnover markets so than even averaging 0.1% would be significant.
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