For those of you thinking that the Betting Exchanges are a viable alternative to a career, there is an interesting thread - "Another boring 'goodbye' after 9 year here" - on the Betfair Forum this week, as another full timer realises they are not.
Siwaadupa (possibly an acronym?) opened the thread (spelling and grammatical errors corrected, and readability enhanced) with:
So the time has come for me.
In 2008 I was saying Betfair is the best thing in world, I will always have something to do (work)
Middle 2008 - Cross-matching - I hate it, it privileges fastest stream person who is happy to pay high charges or it's Betfair themselves
Late 2008 - 20% PC - I could have lived with that - still had plenty to do
I believe 2011, PC2 - shock, completely changed my mind - I started to become worried for the future.
Then Sportsbook appeared - significantly less customers, particularly on sports like basketball and volleyball.
Tennis bots + basketball bots + football bots are taking significant part of my previous activity - destroying me in some way.
I don't want to moan that it's not possible etc. - In my case, its not worth it- when you add all figures, hours spent in front of PC you will figure out that elsewhere I will have more for less. I want to add that I'm not a mug:
80,337 Exchange points = 52% Commission Discount
So I'm pretty active. I won't be any more from tomorrow. I'm not quitting, but as a full timer its over for me. It's another boring exit for £12 per hour elsewhere.While there is no confirmation that Siwaadupa actually reached PC2 status, it wouldn't be an unrealistic expectation for a full-timer after nine years.
£250,000 sounds like a lot of money, but when you break it down over nine years, it's not so much at all; a little under £28,000 a year. If you work 46 weeks a year, that boils down to £600 a week.
While that number is net and exceeds the median UK gross earnings (ASHE 2015) for full-time employees of £27,600, not many of us want to be 'average', and career development, annual bonuses, pension considerations and other benefits also need to be factored in.
As I've written here before, sports investing is far better suited to being a part-time activity than a full-time one.
The thread contain a couple of other interesting observations too. One Ghetto Joe posited:
Yep I think PC2 has driven loads away, margins getting smaller and penalised at least 42% of your winnings. All those early players who promoted and extolled the virtues of the exchange now paying 9 times more than any newcomers who do exactly the same thing just because they've been long standing customers who probably won around £17k for each of those 15 years the exchange has been up.I think I might have written that before here too. Joe later added:
Never understood the mentality of people wanting more charges, we're all using the same exchange, if some are gaining unfair advantages you should close those loopholes down not increase charges to cash in on them too.Exactly. Again, as I have previously said, Betfair introduced the Premium Charges as their response to those gaining 'unfair advantages' and took a share in the ill gotten gains, rather than close the loopholes.
Finally, forumite fixed states that:
every bet is a trade and every trade is a betNot really. In my opinion, a bet only becomes a trade when it is not allowed to run its course without an off-setting bet or bets.
If you backed Leicester City to win the Premier League at 5000-1 (didn't we all?), and let it run, that's a bet.
If you subsequently layed Leicester City, (i.e. made another bet), then those two bets combined make it a trade.
The dictionary agrees with me.
As a noun, a trade is defined as "the action of buying and selling goods and services". The 'and' is important.
As a verb, to trade is defined as "buy and sell goods and services". Note the 'and' there.
3 comments:
That follows my definition too. A bet is a single leg of a trade allowed to go to expiry. A trade has a return leg in the opposite direction to the entry to realise a profit before expiry.
Sports and financial trading is littered with people of bold ambition. Survivorship bias means we only hear from those who succeed. It is, after all, a zero sum game.
Do you declare your profits from "trading" to the local tax man? In the UK there is no tax on "gambling" as HMRC and case law see it as not carrying on a trade. https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22017
If you are going to start arguing that traders are not gamblers then that's a slippery slope for tax purposes and a lot more "full timers" will find themselves back working for someone else than those leaving becuase of the PC charge.
In my opinion each bet placed is a bet. Not one half of a trade regardless of your future intent. A second bet merely closes out an open position for a profit or loss. It doesn't change the nature of the first bet.
While I have sympathy it always amuses me when people get on Twitter and scream at the BF helpdsk when the site goes down saying that they are not "gambling but trading" and can't close out a position. No, you've had a bet. On of the factors you are betting on is that you may be able to close out at a stop loss or profit. But in so doing that doesn't alter the fact that the first thing you did was have a bet.
@ Smithlondon - You are going off on a tangent. All trades or bets within sport bookmakers and exchanges are regarded as gambles as far as tax is concerned.
Further, most financial trades are speculative and are therefore gambles but as far as the government is concerned they are financial trades and subject to tax.
I argue the difference between trades and bets in sports on an intellectual level that has nothing to do with tax. I just like to differentiate between trades (bets) that go to expiry and those trades which are closed or hedged ("greened up").
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