Anyone tried this betfair strategy?

You would have to place 10,000 bets to make £100 profit doing this which is just not worth the effort unless you hire people in India to do it (Oh of course that is how it is done).


Paul
 
She also mentions something about exploiting a matching algorthm on interest rates. Do you thinks he's refering to the guys who used to put massive bids and offers into Euribor, in order to "game" the system?
 
arabianights said:
A bit much to call that a "strategy"... more like taking advantage of a loophole betfair will blatently close sooner rather than later.

Top marks to the woman for ingenuity though!
Click to expand...

The loophole has been there for at least 2 years, so I guess it will be later rather than sooner (I actually didn't know it still existed). Before I quit using BF a couple of years ago I was on the other side of many of these "trades". It used to be a real pain in the backside (one of the reasons I stopped using BF in fact). I actually think it isn't "arbitrage" or "trading" (as the young lady puts it) but facilitated theft (but that's clearly just my opinion). The fact that she employs a couple of kids in India to do it for her doesn't change that as far as I'm concerned.

If it were Betfair on the other side of the bets, the loophole would have been closed almost immediately so if indeed the anomaly still exists then it surely illustrates that Betfair still don't give a hoot and are happy making their comission no matter what.
 
In what way were you on the other side of these bets and how did you lose out ? I agree though that if this money does not come from BF then it must come from other punters which is not trading and is theft.


Paul
 
Trader333 said:
In what way were you on the other side of these bets and how did you lose out ? I agree though that if this money does not come from BF then it must come from other punters which is not trading and is theft.


Paul
Click to expand...

Paul,

You place a back up at 1.44 for, say, £100. In the worst case scenario (which never used to happen, but with automation and these Indian kids working on it must be happening more now) this gets matched by someone who lays at 1.44 with 10,000 1 penny bets as you said. They can't lose (their liability is 0 because of the cumulative rounding error) and you can''t win since they are obviously on the other side of your bet. You would effectively end up backing at 1.0 (which in quirky fixed-odds pricing is actually 0).

What used to happen most of the time is that you would get hit by anywhere between 100 and 1000 of these tiny lays (depending on how liquid the market was). The end result being that instead of backing at 1.44 your effective price would be 1.40, etc. I'm sure you get the picture.

The reverse scenario doesnt work quite so well for them, i.e. them getting odds of 2.0 instead of 1.55 since their bet still has to win, otherwise they lose their stake. Done enough though it still works because of underlying principal of "value".

I think the amusing thing is that they feel compelled to state it was "an attractive young single mother". Would it be less interesting a story if it was a lass with a face like a spanked backside. It also strikes me as a not entirely productive use of a maths degree, but hey.
 
Hmmm :(

This world is so sick, that someone is proud to have fond a systemic error and uses it

sound like, Goldman Sachs would love to have her work there ;)
 
Hey,

I was wondering if anyone's heard of the strategy that's being described here?

Single Mother Makes £100 a Day

It make me think of a_gnome's horse trading strategy, though I don't think he's doing this.

mauzj.
Click to expand...

lol I've heard they make £110 a day off the state all in. housing,grants, childcare,education,benefits, rebates on and on....

The uK has the highest pregnancy rates in europe I think, and families are ,well, not what they used to be. Fair play to them all, I mean politicians and six digit anal expenses ? koff

Yeah hang on, why not sub contract MP's etc head office working out of Delhi or something... ?

yeah Will.
 
I guess that's the other point.... £500 a week is not exactly good money for the amount of effort involved. I have no problem with her doing it though - to me it's spotting a flaw with a system and taking full advantage of it. It should be up to betfair to fix it.

As for the flaws in the allocation algorithms on real markets the main one is doing exactly the same as this: stick loads of one lot orders in and you'll get very good fills. But on the other hand you will get warned very quickly by LIFFE for doing that. I got warned just for trying to work out exactly how my spread limit was calculated doing that miles away from the market FFS.
 
arabianights said:
I guess that's the other point.... £500 a week is not exactly good money for the amount of effort involved. I have no problem with her doing it though - to me it's spotting a flaw with a system and taking full advantage of it. It should be up to betfair to fix it.

As for the flaws in the allocation algorithms on real markets the main one is doing exactly the same as this: stick loads of one lot orders in and you'll get very good fills. But on the other hand you will get warned very quickly by LIFFE for doing that. I got warned just for trying to work out exactly how my spread limit was calculated doing that miles away from the market FFS.
Click to expand...

I get your drift, but it isn't really the same, since betfair isn't really a clearing exchange, i.e. it's more of a person to person gateway.

Those operators predominantly stick to the horseracing markets anyway where frankly most of the big money is either as bent as a nine bob note, i.e. jockeys, trainers, owners, etc, or is bookies laying off and so the larger affected parties don't give a rats. Betfair don't give a rats because 'conveniently' all these tiny bets are accumulated for commission purposes (and that's really the joke) but not for counterparty liability purposes.

I also suspect the betfair API doesnt allow it or charges transaction based fees, which is probably why she has to resort to Indian sub-contractors for manual input.

As for the variable volatility/liquidity matching algorthmns on eurex, etc, they were designed to give the likes of us ickle small retail traders a chance and so any of u big lads that abuse it deserve to get their backsides kicked (though your particular example is a bit much).
 
Not going to go into much detail here... But I know a lot who were abusing it got their arses kicked when the latest volatility came along and big bank traders thought "100 000 lots? An entire *tick* below fair value? I'll have them!"
 
Just tried it, the costs are more than the winnings.

When over 1000 transactions an hour are made there's charge of £0.02 per manual transaction. Each trade is two transactions so the most you could earn is £5 per hour.
 
The loophole has already been closed by Betfair who now round down small amounts, the result, Betfair have boosted their coffers.
 
The trouble is Betfair are aware of this and it's against your T&C's so they will likely close your account even if you could be bothered to attempt it.
 
I'm wondering how many have bought this book

BF Loophole


Got an email, which has contained an affiliate link.
Seems to me that the whole issue is nothing more than a marketing campaign
 
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