How would you like to trade a market where you get large regular price swings every 10 minutes in the afternoon, seven days a week. A
market where all prices are set purely by supply and demand, few transaction costs, no middle men and you only pay commission if you win? Where you can freely act as a market maker and where you have direct market access and where you can create a spread for others to take?

Betfair has revolutionised the betting market and created an open platform for exchanging risk on sports events. This market is now viewed much more like a traditional financial risk market than an old fashioned betting market. Smart users have realised that there are huge opportunities on Betfair because they can buy and sell risk in much the same way they would in a normal financial market but without the burden of cost or the restricted access that is usually associated with traditional financial markets.

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Ruth, the best tactic is to take a Betfair price and hedge with Binary Bets.

The prices on Betfair track Bins prices for very clear reasons. Guys in the city take the feeds from a variety of services and automatically put prices up on Betfair. They also arb the two so if you get a better price on Betfair the bots take it off.

Not sure if you are aware but you have a decimal option on binary bets so compare prices using that.

A long time ago I used to arb between the two but the bots measure there success in milliseconds now so poor old humans have no hope. Its a battle of the bots.

I use VIX to figure out whether I should back or lay.

Pip if you lay 1000 at 1.01 your liability is 10 but your potential reward is 1000 less commision.

The daily / midday up and downs are less volatile so lend themselves to low backing but the intra days can be manic. There are interesting markets but highly volatile so you can make or lose a fortune on them. Difficult to hedge out or cut a loss at the prices move so quickly.

Ruth, I haven't got into binary bets, I suppose I should do. Generally speaking if you advertise a price within the spread on Betfair you will normally get filled within a reasonable time, unless you leave it to when the price is crashing down of course.

Thanks Scrip.

The day I make 1000 by risking 10, I'll be very happy to shell out 50 commission :-)

Best ever night on the football. Just one of those nights when everything came off. Was using some matches to test some new strategies as well and that added a few quid to the pot. Life is good!

Pip and there in lies the problem, if over the course of a year you only win that bet 1 in 100 times then thanks to commision you will still be a loser.

Scrip: I see what you mean. In that case, I'll try and stick to the 1.01's that occur just before the market is about to reverse :-))

Scrip

Good to hear

Made about 35% return on my pot on the footie tonight so well pleased (especially having not been able to trade during the day)

Fundy, Horses were rubbish today anyhow so you didn't miss much.

Thanks for info guys, much appreciated,

Well 8 winning bets, 4 losers but overall well down on the day. Over confidence plus some of the FTSE intradays were photo finishes. I almost felt the market was being manipulated in the last few minutes of most hours - or am I just paranoid again?

"I almost felt the market was being manipulated in the last few minutes of most hours - or am I just paranoid again?"

Paranoid, everybody comments on the same thing.

If you look at the moments in detail the average difference in the move in the index over an hour is about as close to zero as you could get so really its just you against everybody else. No TA will move that figure from zero.

The market in the intras have boiled down to who has the fastest system in terms of outright skill this has killed the market somewhat.

Unless you adopt a process that is contrary or does not rely on being the fastest you will lose over time IMO. You have to take positions that will be eaten up by the market rather than trying to anticipate it.

Thanks for your advice and patience Script. Still having a buzz from this. One winner on 9am and green already on 10am. Mental arithmetic and reciprocals improving rapidly as well :-))

The average movement over an hour is no doubt zero and an attempt to predict at all times the future movement might well be futile. However, the skill is in cherry-picking the times within the hour at which the movement is predictable through TA or whatever other means, and trading them. The mechanism for predicting and trading will be different depending on the market. For instance, in the 9-10 hour just ended the FTSE was stuck in a close range near the line. TA would have been useless and instead I made use of the exaggerated swings in odds one way and the other as people tried to guess which way it was going to go.

kernow, that question is as old as the intradays on Betfair. I think the answer is that there must be some significance to the hour interval in the city, not with respect to Betfair but with respect to charts with an hourly tick or the programming of certain automatic trading. Certainly I doubt very much whether people are moving the FTSE to capitalise on Betfair.

"the skill is in cherry-picking the times within the hour at which the movement is predictable"

And there in lies the problem. Because everybody else was quicker than I and using similar techniques I quickly dropped this tactic in favour of others.

Scrip

You mention using VIX to decide whether to back or lay. I probably should know but could you explain what VIX is? Thanks

I think the following may be pertinent but it would not be for me to get involved with.

The Chicago Board Options Exchange calculates a market volatility index (symbol: VIX) that is the average implied volatility of eight put and call options.

This index is usually between 20 and 30 (i.e. an implied volatility of 20 to 30%), but can move sharply upwards if large market swings are anticipated. A very high implied volatility is usually an invitation to write options, not buy them.

Thus an observation of the CBOE VIX could be used to determine market direction.

IMO if you are into options then you will have a much better understanding of the Betfair financials because basically they are the same thing.

I worked out the way that IG price their binaries and they use an option model to do it. My model is right on the money and thats how I figured unless I was faster than them it was going to be difficult to beat over the long term and thats what I am in it for.

All winners today - up 32% :-) Not rushing out to the merc showroom yet though as pot is only just over 300! Patience is a virtue etc.