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jpl

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Posts: 82 Member Since: May 10, 2008

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July 13, 2008 20:56:20

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Earlier today (on their Service forum) BF posted details of the enhanced cross-matching logic they're implementing tomorrow.

Currently if someone asks for a price on a given selection, and it's available on that selection, BF won't try to "cross-match" against other selections in the market.  Cross-matching only comes into play if they can't do a 'normal' match.  But tomorrow that won't be the case.  If cross-matching gives a better price than normal matching that's what they'll do.

So that's one of my bots heading for the scrapheap.  Ah well!

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dbowes

rookie botter

Posts: 11 Member Since:July 2, 2008

#2 [url]

July 14, 2008 12:05:08

I thought the cross matching only came into play when they couldnt do a match as normal. If a bet would be unmatched they would attempt to match it by cross matching, rounding to the nearest odds increment (and take the difference). What was the quote your refering to? cant get on the betfair siet from work :(

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jpl

bot addict

Posts: 82 Member Since:May 10, 2008

#3 [url]

July 14, 2008 12:38:10

Yes, that was the case, but it's all changing today, according to the post BF Customer Services made yesterday:

As announced last week we’ll be making improvements to Betfair’s bet matching logic tomorrow, Monday 14th July. We’ve made a number of announcements to keep customers informed, but wanted to take the opportunity to explain the changes in detail.

What’s changing?
We’ve improved the code that matches bets. As well as matching backs against lays as we’ve always done, we’ll also try to match your bet against bets on other selections in the market. We‘ll give you an improvement over the price you‘ve requested where possible, and we‘ll match you against whichever bets get you the best price.

For example in a tennis market:

Roger Federer is 1.9 to back, 2.1 to lay.
Rafael Nadal is 1.8 to back, 2.0 to lay.

If you try to back Federer at 1.9 or less, previously we would have matched your bet against the customer looking to lay Federer at 1.9. Both bets would have been matched at 1.9, even if you‘d asked for a shorter price. In theory we could do even better than that though: we could match you against the customer trying to back Nadal at 2.0 (backing one player at 2.0 is of course the same as laying the other player at 2.0). Our new bet matching process will see which match gets you the better price. In this case we would get you 2.0 by matching you against the Nadal backer (who is offering a better price than the layer of Federer).

When placing a new bet you will only ever be matched by the new process if doing so gives you a better price than you would otherwise have got. We will match your bet at the best price possible that’s a valid increment on Betfair’s odds ladder, as we explained in our update of 6th June.

Does this only work for 2-runner markets like tennis?
No. The new matching logic works for any number of runners in a market. An example with a 2-runner market is probably easiest to understand, but the principle is the same for markets with 3 runners or more. For example if a football market looked like this:

Spain 2.3 to back, 2.5 to lay
Germany 3.9 to back, 4.0 to lay
The Draw 2.9 to back, 3.0 to lay

Then if you want to back Spain we could match you with customers looking to back Germany and the Draw at 4.0 and 3.0 respectively, which would result in you being matched at 2.4, a better price than you would have got had we matched you against Spain layers (who are only offering 2.3).

Which markets will this affect?
We’ll introduce the new code on Monday 14th July, but initially matching will be done exactly as before. As explained earlier in the year, introducing best execution across selections wasn’t possible without significant change to the existing code that matches backs and lays, so we will need verify that performance is as expected for the existing matching process before enabling the new functionality. All being well we’ll enable the new code for a small number of markets to ensure that everything is as it should be later on Monday. We’ll announce which markets on Monday. Again if all is well we’ll roll out to a wider range of markets on Tuesday.

We’d expect to match across selections on the same range of markets as we currently do:

Match Odds in Basketball, Boxing, Cricket, Ice Hockey, Rugby League, Rugby Union, Snooker, Tennis and Volleyball, Greyhounds win markets, Darts match odds, correct score and handicaps and Soccer match odds, HT/FT, correct score and unders/overs.

Horse racing will not be covered for now, due to the possibility of non-runners, and the new process isn’t applicable to markets where runners can be added (for example “Next manager” markets), where runners listed might not take part (e.g. First Goalscorer) or where the runners in a particular “market” are treated independently (e.g. Accumulators).

What about bets placed in error?
We’re aware of a concern that this change might make it more likely that customers would match bets placed in error, for example asking for 1.2 when you really wanted to back at 2.2. One consequence of the change we’re making is that any bet you place is more likely to get matched - making it easier to get a match is the whole idea. Being realistic though, if you had placed a bet in error like that in the past, in the vast majority of cases you would have been matched (against lays on that selection). There’ll now be far, far more circumstances where you would have been matched anyway , but instead you’ll now get a better price, than situations where your bet would have been unmatched and you might have had the chance to cancel. On average we would expect customers who place bets in error to be better off as a result.

On a related point, we’d also expect this change to make it more difficult for people who place “trap bets” to get matched (a trap bet is an offer that is only likely to be matched if another customer places a bet in error). While putting up “trap bets” is against Betfair’s terms and conditions and we close the accounts of persistent offenders, on an exchange where any customer can ask for any price it’s difficult to eradicate this practice. In most instances where a trap bet is the best price available on a selection, customers will in future be matched at better prices against bets on other selections rather than matching the trap bet.

How will the change affect liquidity?
We would expect the change to be beneficial to liquidity. Obviously if we have opposing customer bets in the system that could be matched, whether on the same selection or across different selections, the best thing for liquidity is to match them.

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dbowes

rookie botter

Posts: 11 Member Since:July 2, 2008

#4 [url]

July 14, 2008 13:01:01

lol i love the way they give their examples. They r so nice to us!!

So its a bigger change than i realised. So basically you can be at the front of the queue for 1 selection but the opposibe back/lay would actually be matched before you. There example uses evens but in reality the best execution will actually skim them pennies for every transaction that occurs.

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jpl

bot addict

Posts: 82 Member Since:May 10, 2008

#5 [url]

July 14, 2008 13:15:42

Yes, I hadn't realised until yesterday this is what they were doing.  Any bot that aims to put an offer at the front of the queue and then hedge against other selections once it's matched has just had its lunch money stolen by Betfair.  It's a bit annoying, as that's exactly what one of my bots was doing, although to be honest the amount of money it made was always relatively small.

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bennean

rookie botter

Posts: 40 Member Since:May 14, 2008

#6 [url]

July 14, 2008 13:34:02

JPL, Captain Sensible,

I know this is going to be a stupid question (!) but I don't understand why this is bad for botters; if you get a better price, surely that's a good thing?

Please forgive my naivety!

Andy

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dbowes

rookie botter

Posts: 11 Member Since:July 2, 2008

#8 [url]

July 14, 2008 13:44:42

Its better for punters making 1 off bets. A lot of bots try and offset bets for one selection against other selections to guarantee a small profit, whether this is waiting for an overround to occur or to offer a bet then hedge afterwards (like JPL does).

A casual punter who wants to back a selection doesnt get his calculator out to establish he's 1p better off by doing the opposite back/lay on the other selection(s). A bot can do this all day long... or could of done until now anyway. Betfair are essentially doing what bots do, but they get to do it before we see any updates via the website without any risk.

Shame really, i need to think of a completely new strategy.

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dbowes

rookie botter

Posts: 11 Member Since:July 2, 2008

#9 [url]

July 14, 2008 13:46:59

If i understand it right then there they may aswell just have 1 selection available (the favourie). i./e Back Federer to win or lay Federer to lose.

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blackmagic

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Posts: 70 Member Since:June 26, 2008

#10 [url]

July 14, 2008 15:08:09

Hmmm, this is an interesting one, so under a single order for a selection you will end up with a set of transactions for random sub set of market selections?

Thanks for the heads up. This is one to be careful of if you are trying to match transactions to orders.

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dbowes

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Posts: 11 Member Since:July 2, 2008

#11 [url]

July 14, 2008 15:36:00

You will be matched at what you ask for (or possible higher if price improvement allows it). Betfair will match your bet for you by offseting it against other selections. This will be internal though. For example if you ask to back at 3 when 3 is available to back, betfair may be able to give you 3.1 by matching it using the avaialable lays for the rest of the field. You would just see an order of 3 matched at 3.1.

It means that the layer of 3 for the same selection will remain unmatched, which i personally think is unfair.

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jpl

bot addict

Posts: 82 Member Since:May 10, 2008

#12 [url]

July 14, 2008 15:39:28

I don't think the change will be visible in that way.  Suppose customer A places an order for selection 1, which is then cross-matched against customer B's order for selection 2 and customer C's order for selection 2.  Betfair will report to customer A that they've got a match on selection 1, customer B that they've got a match on selection 2, and customer C that they've got a match on selection 3.  The only way for a customer to know they were cross-matched rather than matched is that the total amount traded on their selection will go up by the size of their bet (not double the size of their bet, as it would for a normal match).

At least I'm assuming that's the way it will work - I've not tested it yet.

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dbowes

rookie botter

Posts: 11 Member Since:July 2, 2008

#14 [url]

July 15, 2008 08:52:47

lol, its a difficult one to get into words but yeah thats what i was trying to say.

The whole concept of the exchange is changing. A lot of opportinites for bots are lost with this change. I think trading is the only way forward now.

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jpl

bot addict

Posts: 82 Member Since:May 10, 2008

#15 [url]

July 15, 2008 11:25:37

Clearly there's a trend for Betfair to take over any low-risk or zero-risk opportunities they identify:  last December it was Exchange Games, now it's arbitrage between selections within a market, I imagine next it will probably be arbitrage between different markets (e.g. Total Goals and Overs).  I think anyone who's about to invest time or money in a strategy needs to be thinking about how susceptible it is to being taken over.  And if I had a BF account manager (which I don't) I'd be telling them as little as possible about what I was up to.

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austinpodhorzer

bot addict

Posts: 131 Member Since:May 11, 2008

#16 [url]

July 15, 2008 14:03:56

Yes, I think not telling ANYONE what you're up to is the best policy all round.

To be honest I think it makes sense for betfair to be doing this sort of thing and it was surely inevitable that they would get round to it one day.

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jpl

bot addict

Posts: 82 Member Since:May 10, 2008

#17 [url]

July 15, 2008 18:27:34

dbowes - I can't really agree that what BF are doing is unfair.  Currently I've got a bot that puts offers at the head of the queue with the intention of hedging them against other offers (on other selections) that are already there.  So what it's doing is taking (typically rather small) amounts of money from customers who don't have the knowledge / inclination to faff about doing the maths.  Now BF have decided they'll cut my bot out of the loop - they'll do the maths, and pass most of the money on to the customer (perhaps keeping a bit due to rounding the prices of the hedging bets).  Not great news for me, but hard to argue with on principle (imo).

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denp

bot addict

Posts: 65 Member Since:June 14, 2008

#18 [url]

July 16, 2008 20:12:03

they don't seem to have turned it on yet - tennis and football markets are still showing over 100% lays and under 100% backs.

I would think applying it to markets with a lot of runners could impact their performance. Presumably they'll need to do this transactionally - unless they can replicate the odds of a single bet with a complete set of "other side" bets on the other runners, you wouldn't get a complete bet for the original user. To do this they'll have to lock the market while they match. I don't think anything they've got currently would require a market-level lock, only runner-level locks.

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birchy

Betfair Elite

Posts: 593 Member Since:May 11, 2008

#19 [url]

July 16, 2008 21:00:14

Although i've retired my bots and not placed a sports bet for several weeks, i thought i'd add my tuppence worth. Betfair are becoming more and more greedy. They have a perfect business plan revolving around the commission structure and as such NEED to block off any profitable edges the bots may be exposing. Obviously that's bad news for us botters, good news for the average 2 quid punter and excellent news for Betfair.

The way forward is to write bots that appear to be 2 quid punters. That means nothing fancy and NO super-fast green-ups or "amazing" 10ms calculations. If the Betfair market analysts see a pattern that makes a profit, they'll block it and/or let their server side bots grab the value. After spending a couple of years botting and about 6 or 7 years trying to beat the exchanges (was using Flutter.com until Betfair poked it's nose in and doubled the commission to 5%), i have come to the conclusion that i can make much more profitable investments in carefully selected stocks and trust funds. They're not as much fun but the profit speaks for itself. For me, what little value Betfair offered has been ruined by their constant greed. Some of the "behind the scenes" stories i once heard from a sub-contracted I.T. guy about 2 years ago were quite shocking and although i chose to be ignorant and dismissed his comments as drunken BS, he was actually spot-on. These "new" exchange games bots and bet-matching "algorithms" are only new to the public and are just the tip of the iceberg. You'd be surprised how many no-risk, 1-tic trades a server-side bot can grab before the bets are public...

www.bespokebots.com

"This time next year Rodney, we'll be millionaires!"

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denp

bot addict

Posts: 65 Member Since:June 14, 2008

#20 [url]

July 16, 2008 21:29:32

but as I understand these new matching algorithms, there's no direct profit in it for betfair; they are reducing the risk by ensuring punters get the best price available. This should reduce average spread and hence increase the competitiveness of their product... and potentially increase profits through higher volumes.

i would expect to see betfair introduce changes that drive profits - however they need to do that. High-volume, low-profit per bet bots don't drive profits, so arguably discouraging them is nothing for betfair to worry about. You could argue that the bots add liquidity and that is a good thing, i guess.

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