Are traders really the dominant force on Betfair?
You often read about traditional backers (or layers) moaning how traders ‘mess up’ the market.
I’ve posted elsewhere on the blog that I actually think trading creates a range of new opportunities for traditional strategies because they often chase prices into value territory, without actually realising it. So much so that I’ve started taking advantage of outlier prices. But that point aside, I do often wonder just how much trading goes on and on what scale? We already know you can’t scale in the same sense as you can in the stock market, but that’s no bad thing you can’t ruin the world economy!
But I raise this, as I have done before, because of the effect of my order in the market. Because of the size of my order I often have to wait for the order to fill. On a footy match I may place a large order in the market and wait for it to fill with the anticipation of trading out maybe only a little higher. It’s a low risk strategy because I can always trade out for zero if it goes wrong. When you do this you can ‘see’ your order getting nibbled away in the market. I am always surprised how long this takes, but also the size of orders that get taken.
In the champions league this week it seemed to take ages to get filled and this was on a 1.14 shot! An amazing about of small orders went through the market, before a few bigger ones (in the 000’s) eventually filled my order. Because your return when trading is only a small fraction of your stake, you need to use large amounts. But when you look at the market, it seems there are not that many big players out there. QED.
Category: Football trading strategies, Trading strategies
