Sunday, 17 January 2016

Trap Bets, Bots And PC

It's usually disappointing to see Brighton and Hove Albion win, and never more so than when their victory marks the final bet of the 2015-16 Lay Last Loser System which finished with an ROI of 21.8% from the 15 bets.

We'll see how it works next season, but with a maximum possible loss of 5 points, it's neither going to break the bank nor make your fortune.

Games commented on James' comment:
I get it, he is calling you old.
Yes, I think he was. Not the first time I've been called old, and often there's a seven letter word following close behind, but James at least spared me that.

Triggered by the topic of Betfair allowing bets where one party risks nothing, Bossman Megarain has this to say on 'trap bets':
I disagree Betfair closes down, anyone naughty.
On many markets, trap bets, are placed, and its frustrating to see how long this practice is tolerated .. I would have thought, a company as 'great' etc, could have found a way, to stop it.
For those unaware .. this is what happens :
Take a run-lines market, which isn't very busy (volume has dropped off a cliff), someone will offer, maybe £35 at 1.70. The lay side is empty, so, a trap bettor will request, £35 at 171.
If you think 1.70 is fair, you might be tempted to lay 1.71, but, its not, its 171.
I heard rumours, in the early days, Betfair ran their own trap Bots.
I sincerely hope, they never did/don't.
I have no idea whether Betfair ran such 'trap Bots' but from my own observations on lean markets, I don't think this was the case, although as James says below, "why shouldn't they"? The problem with banning trap bets is defining exactly what a trap bet is in an illiquid or volatile market. I've seen 1.01 traded on both sides of a binary bet seconds apart. Here's James being anti-antagonistic...:
Running a "fat fingers" bot is a standard algo-trading technique both in sports and financial trading. Not that I think such a trade makes much money these days as most people trade through third-party software. You can easily fat finger trade on Betfair's website but not so with third-party software. It would be hard to do a trade as you mention on a ladder and impossible via a bot.
As I said in a previous comment, fundamental and technical trading are chalk and cheese.
Whilst you might love sport, the rules (and the tedium) there are others who love the numbers for themselves and building abstract trading algorithms with no interest in the underlying activity.
In finance that is what the "rocket scientists" are for, to have no interest in the trading or economics of underlying securities, just the skill to shake-down another trading firm.
Being an algo-trader, you and anyone else who puts their money up as risk is fair game. The exchange was created so that people could trade and that is what traders do.
Being an ex-cycle racer, I have no interest in soccer (there, I said it), cricket, rugby or any other sport (with the exception of hurling). For me it's the fun of out-witting a market without a care for the underlying sport.
Betfair runs all manner of bots to coax money out of naive bettors and botters. Why shouldn't they? The Betfair exchange is a form of dark pool and so they can do as they please with it.
They have shareholders to take care of.
http://www.betfairprotrader.co.uk/2014/08/is-betfair-exchange-form-of-dark-pool.html
PS - If I come across as being antagonistic then it was not intentional.
Megarain Bossman responded to fellow ex-cycle racer James with:
Hi James,
Your comments are not antagonistic .. all debate is welcome.
I understand your arguments, but have never understood how Financial markets can Bust trades, that are clearly a fat finger, but, Betfair, allow Bots to encourage someone to make a very expensive mistake.
If it's a naive user, the trap bet will probably make a severe dent in their bank, and leave a very bad taste .. hardly encouraging future trade.
I am not sure of the number of users who trade via a ladder, as opposed to grid interface -- but, I have traded for many years, and trap bets, can still catch you .. unless you put in specific overrides, which, may encumber other bets you would like to make.
My opinion of Betfair as a company, has steadily eroded over the last 10 years .. I would have thought, running Bots in this manner, would be contrary to best Financial practice .. but, maybe they are not regulated, to the same level as a financial services company .. and can do as they please.
Looking at the turnover figures, since the inception of PC, it would certainly seem, they are running a shrinking business .. which I just shake my head at .. but, clearly, someone is happy.
I'm not sure anyone's opinion of Betfair has improved over the past 10 years, well certainly not that of many customers. The cross-matching implementation was an own-goal, and the implementation of the Premium Charges further damaged their reputation, especially when it became apparent that insiders were well aware of the court-siding going on, but rather than tackle that problem (consistent "winners" taking too much money out of the pot), they decided to allow the practice to continue and, a little short-sightedly in my opinion, make some money off it. The fact that former insiders were heavily invested in court-siding just left an even worse taste. Were Betfair subject to the same scrutiny as some of the financial firms, one can imagine a large fine being imposed and non-court-siding PC payers being compensated, but where's the oversight?

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