How many racing traders are there?
I often get asked how many traders are on the exchanges, how much volume do they do etc? The honest answer is that I currently don’t know, but I can confirm roughly how many existed a few years ago.
Back in 2003 Betfair issued a document that actually clearly laid out what a market looked like. In the document they looked at a horse race and showed how many people placed back bets only, how many laid only and how many did both; trading in other words.
I worked out how to ‘trade’ by accident. I started on the exchanges doing arbitrage. I would do this by backing at a bookmaker and laying off on the exchange. I soon realised you could actually do the same thing on an exchange by simply putting money back into the market at a different price, instead of at a bookmaker.
By 2003 according to the Betfair document, on one particular race, more than 500 people had figured out the very same thing. It turns out that this activity made up nearly one fifth of the participants in the market. By volume it accounted for nearly 50% of the entire market.
That was a bit of a revelation to me as I hadn’t really spoken to many people about what I was doing, mainly because people didn’t understand or care. So it was quite a surprise to learn back in 2003 that more than 500 people were quite likely doing a similar thing. There have been some pretty high profile casualties in the intervening years, I wonder how many of those 500 are still around? I doubt I’ll ever learn, but at least I can sort of part answer the original question.
Category: Horse Racing, Trading strategies
