Drying Up

I noticed last night while trading the PGA Tournament on Betfair and BETDAQ that the total matched towards the end of the final round was £12.7 million and £25.8 million respectively. The final totals after the play-off would have been higher, but the point is that BETDAQ's share of some markets has grown hugely over the past few weeks. On this subject msv writes:

Maybe this is not the right spot but I was wondering why Betfair should be bothered when some of their most successful traders leave the markets due to the new premium charge. Maybe I miss something but why should it be bad news for Betfair when the guys leave who get the most money out of the system?

Basically, an exchange succeeds where there is liquidity. Many so-called 'big-hitters' have been, or will be, driven away from Betfair by having to pay up to 60% of their profits in charges. That drop in liquidity is already being seen, with liquidity on many fringe markets dropping dramatically, and many comments on the forum about it. This one is typical:

I remember when Betfair first created markets and no one played on them. It was like going back in time today after looking at the Rugby and MotoGP markets.

Absolutely no one playing in them.

Well done Betfair - you have created a ghost town.

MotoGP is not my thing, but you get the idea. There's still good liquidity on the Match Odds football markets, but it is clear that there is less than before, and that other exchanges such as BETDAQ are benefiting. Betfair are playing a dangerous game. If the liquidity drops to the tipping point, then the site really will become a ghost down, and very quickly.

msv again:

Good luck with the £3.85! This has to be a awesome month, if you get your best August ever with just two weeks gone.

Unfortunately, August is my second worse month behind only April, and the fact that it may become my best August ever really isn't saying too much! August is never awesome. For anyone who didn't read the update to my last post, it doesn't help when you identify value and then do the exact opposite. My spreadsheet clearly had Evian TG as value (my price was 1.87, and 2.2 was available) yet I somehow read Back as Lay and throw away 1.2 points. Very annoying. Other than that little error, it was another pretty good day yesterday. Stoke v Chelsea didn't go Over, nor did Manchester United fail to win but other picks were good including the XX Draw which went 2 for 2 on the day and 4 of 6 on the season. And one of those only lost to a 90' goal!

Despite the Evian TG debacle, I did manage to make the required £3.85, and am now looking good for a strong finish before my summer break.