Market manipulation on Betfair

[harry]

Interesting thread to read.
I wonder: is there regulation out there governing the market's integrity? I mean, stock markets are highly regulated and market manipulation is prohibited. I can't find anything on betting markets though. All thoughts appreciated!

As far as I know there isn't. The relevant regulation for stock and derivatives markets is MAR (Market Abuse Regulation) , which relates to financial instruments including stocks, bonds, financial futures, interest rate futures, some swaps, options on these instruments, commodity derivatives.

This is enforced in the relevant markets by the FCA (see their definitions of market abuse here), MAR 1.2-1.9.

In theory you could see Betfair as an exchange for binary options, but in reality rather than being regulated by the FCA they're regulated by the Gambling Commission. I'm not aware of the Gambling Commission having any regulation on market integrity or abuse, though I don't know as much about this area so maybe someone who knows more can correct me here!

[Trader Pat]

I think its definitely much harder now to trade if you're just starting out as there's a lot more going on in the market with some of it happening at predictable times but its something you have to adapt to and see if you can take advantage of , if you can't then just do your best to avoid it and work around it.

I've no problem with old fashioned manipulation in general be it spoofing, flashing or whatever like I said adapt and get on with it. Too many newbies expect everything to be made easy for them and if they can't understand why something happens they immediately blame other actors in the market or Betfair instead of looking at themselves and asking if they can do anything different. Trading isn't supposed to be easy when starting out but I'm glad I'm not starting out right now.

[Euler]

There is no regulation or structure in place to stop abuse as far as I am aware.

I started this thread as I had this conversation with Betfair about manipulation but they sort of shrugged their shoulders and said, what manipulation? So was interested in canvassing opinions.

My view is generally in agreement with Pat.

[Tuco]

Trading isn't supposed to be easy when starting out but I'm glad I'm not starting out right now.

...the bottom line is that nothing is easy when you're starting out - remember the first time you rode a bicycle without stabilisers?

As you become more adept, everything becomes easier.

[Trader Pat]

Trading isn't supposed to be easy when starting out but I'm glad I'm not starting out right now.

...the bottom line is that nothing is easy when you're starting out - remember the first time you rode a bicycle without stabilisers?

As you become more adept, everything becomes easier.

Absolutely and that's how it should be.

Just making the point its definitely harder right now than it used to be

[dirkg]

Many thanks for your thoughts on this, very insightful.

[MAGTRADEUK]

Pre off seems to be the one where some really weird stuff can happen, and it isnt really clear whos doing what and when, what with people or establishments or x matching etc just a lot of algos maybe trading numbers and not as much relevance to the actual horse race, dont know, new to this. Traded financials before and thought would look at this, same sorts of things go on just got to get a grip with how dynamics of markets change.

[Shaung89]

I started this thread as I had this conversation with Betfair about manipulation but they sort of shrugged their shoulders and said, what manipulation? So was interested in canvassing opinions.

Was there specific situations which you were discussing with Betfair?! The vibe I got reading your message implies there was something you didn’t agree with/like but BF just shrugged off...

[alexmr2]

The manipulation is of people, traders. Building bots that dominate most of the unmatched money on several prices and then smashing through traders orders that arent its own and trying to force them to close for a loss. Creating false impressions in the market to lure traders in and then ramping the other way. Deeply studying trader's behaviours to take advantage of them. Pushing against their orders making it as difficult as possible for them to close.

...

The irony is that since PC3 came in it is much easier for an individual with lots of money and know how to dominate much of the markets and other participants here, as it has created a situation where 'they' don't have to hedge all their bets (while normal traders do) as this just creates bumpy P and L's for them over several accounts which will then increase their commissions to the point where they can avoid paying PC.

So in practical terms (especially late on in the markets where most of the real money is being bet) if you put an order in on the wrong runner and the 'market' smashes through you (or rather the person responsible smashes through you) then you can either close for a loss (and the bigger the stake the further away the price will be pushed, although this is by no means limited to large stakes, even small ones are pushed against) then as a trader you can either hedge for a loss (what we're supposed to do right? ) or let the bet stand, whereas on the other side the manipulators bot is happy either way, either it has forced your order into hedging against it for an instant profit for itself or, if you dont hedge, then it doesnt care as the bet will just form part of its market making and such bets will even out over time generating more commission for it.

Sorry to quote an old post but I found this interesting and have a question about some of the mentions of holding other traders in losing positions if anyone would be able to answer it?

Would a bot (or manual trader for that matter) actually be able to see someone's position in the market, or would it purely based on making an assumption from the pattern and historical human behaviour whether or not the movements were artificially influenced by the one looking to manipulate or not?

[ShaunWhite]

The manipulation is of people....

Would a bot (or manual trader for that matter) actually be able to see someone's position in the market.....

True to form you've zeroed in on a post that's pure speculation and you've found a conspiracy angle.

[alexmr2]

The manipulation is of people....

Would a bot (or manual trader for that matter) actually be able to see someone's position in the market.....

True to form you've zeroed in on a post that's pure speculation and you've found a conspiracy angle.

Well I always wondered what people mean when they say the market will see you and push against you if your stake is too big

I know from the worst emotional trading and biggest losses I have had in the past, it felt like more often than not the market would push against me leaving my position well into the red. I'm not sure if this was just a psychological thing or if there was a way where bots could detect my abnormal activity i.e. look for several equal stakes being matched which are too big for the liquidity and then push against it

[ShaunWhite]

i.e. look for several equal stakes being matched which are too big for the liquidity and then push against it

There's too many people with different objectives for one person to try and pick a battle with one other unknown trader with an unknown style. A case of losers paranioa I think, nobody is out to get you.

leaving my position well into the red.

So who's fault is that?
You can't just sit on a position until it's "well into the red" that's insane, trading 101, take a small hit and regroup.

[ShaunWhite]

Well I always wondered what people mean when they say the market will see you and push against you if your stake is too big

Away from you (so you don't get filled), not against you. Opposite thing.

You've misunderstood the information then found a reason to support your error (the bot conspiracy thing). You need some serious work on your critical thinking if you're going to be sucessful, or do well trading.

[ShaunWhite]

...why am I even engaging with this on a Saturday evening !
I've got the heating up high, a jug of fresa colada in the fridge and the latin american top 20 on youtube. Party for two time, adios.....

[Derek27]

The manipulation is of people, traders. Building bots that dominate most of the unmatched money on several prices and then smashing through traders orders that arent its own and trying to force them to close for a loss. Creating false impressions in the market to lure traders in and then ramping the other way. Deeply studying trader's behaviours to take advantage of them. Pushing against their orders making it as difficult as possible for them to close.

...

The irony is that since PC3 came in it is much easier for an individual with lots of money and know how to dominate much of the markets and other participants here, as it has created a situation where 'they' don't have to hedge all their bets (while normal traders do) as this just creates bumpy P and L's for them over several accounts which will then increase their commissions to the point where they can avoid paying PC.

So in practical terms (especially late on in the markets where most of the real money is being bet) if you put an order in on the wrong runner and the 'market' smashes through you (or rather the person responsible smashes through you) then you can either close for a loss (and the bigger the stake the further away the price will be pushed, although this is by no means limited to large stakes, even small ones are pushed against) then as a trader you can either hedge for a loss (what we're supposed to do right? ) or let the bet stand, whereas on the other side the manipulators bot is happy either way, either it has forced your order into hedging against it for an instant profit for itself or, if you dont hedge, then it doesnt care as the bet will just form part of its market making and such bets will even out over time generating more commission for it.

Sorry to quote an old post but I found this interesting and have a question about some of the mentions of holding other traders in losing positions if anyone would be able to answer it?

Would a bot (or manual trader for that matter) actually be able to see someone's position in the market, or would it purely based on making an assumption from the pattern and historical human behaviour whether or not the movements were artificially influenced by the one looking to manipulate or not?

Only Bill Gates can do that (the fictitious character, not the former owner and CEO of Microsoft).

If the favourite for the Derby is 3.0, everybody's seen it win the Guineas and understands why it's a 3.0 chance, and then some idiot takes it down to 2.7 with a £250K back bet, nobody's going to think somebody knows something about a horse in the spotlight that the rest of us don't and think it's heading down to odds-on. The money will be taken and it bounces back.

Basically, if you put a trade in the market and the market goes against you, whether it was a bad trade (which isn't necessarily the case) or not, YOU made a decision to open a trade in a position that ultimately led to a losing trade.

It's all in the psychology of trading. Some people get frustrated and blame the trader who took his bet for the loss, some blame the market, some blame life, some even blame Bill Gates.