I've been thinking a lot on this subject and I think I've reached a possible solution.
On medium/low liquidity markets, it is possible that Pinnacle accepts higher stakes than you would be able to place on Betfair. If they recieve a high stake on a certain outcome then they suspend their odds and decrease their liability by betting on Betfair and making very strong and really quick moves.
If this is true it makes it very hard to trade these markets. From my experince, it's easier to trade on tennis or cricket.
Well, I'd like to know more on this subject and I would really like to ear from more experienced traders...
@J.S. - I think it makes sense that a traditional bookie change their odds based on betfair fluctuations. If they don't do, they will get very unbalanced books, due to arbers
