Efficient Markets on Betfair

[Archangel]

Would it be a reasonable assumption to say that the exchange market prices just before an event (horse race, football match etc) are the most accurate reflection of the probability of that event occuring?. The idea being that the market has digested all available information and buyers and sellers have come together to agree on a price, so its the most accurate reflection of the odds.

I am doing some data analysis of price movements before certain events, up to a few hours and I am trying to gauge the variables such as new information and other factors

[Kafkaesque]

Would it be a reasonable assumption to say that the exchange market prices just before an event (horse race, football match etc) are the most accurate reflection of the probability of that event occuring?. The idea being that the market has digested all available information and buyers and sellers have come together to agree on a price, so its the most accurate reflection of the odds.

I am doing some data analysis of price movements before certain events, up to a few hours and I am trying to gauge the variables such as new information and other factors

It's a widely held belief that closing prices at Pinnacle for American sports and football (possible other major sports) are true value, and it's been tested as true, although I haven't seen any for some time, so can't say if it still holds.

A fair few pro sportsbetters I know and most I read about online determine whether they've had a value bet or not upon beating the Pinnacle line at close.

Given that the Exchange follows Pinnacle pretty closely (or vice versa maybe), it should also hold true there. Although, note that Pinnacle only offers a few markets per match, so it may not be the case for all market types.

I'know nothing about the horses, but I seem to recall others saying, it isn't the case there. Others will know more than me on that count, I'm sure.

[spreadbetting]

It'd probably be a reasonable assumption although maybe not an accurate one. Much of the last minutes activity is simply people getting on and bookmakers balancing liabilities, you could argue any book close to 100% is an accurate reflection of the odds long term. The majority of value bettors, who are probably the best judges, will simply bet when they see value, if they don't see it they won't bet.

[LinusP]

My experience with horse racing markets:

Scheduled off time: Accurate, not much value to be had

Actual off time: Not that accurate, some value to be had (dependant on the delay)

BSP: Not accurate, value to be had

People may disagree and it is dependant on the odds/market but the above comes out in my data / pnl.

[Archangel]

My experience with horse racing markets:

Scheduled off time: Accurate, not much value to be had

Actual off time: Not that accurate, some value to be had (dependant on the delay)

BSP: Not accurate, value to be had

People may disagree and it is dependant on the odds/market but the above comes out in my data / pnl.

Thats interesting, especially since the time between the above events is not that long, minutes probably.

I am looking in particular at the value angle. I have noticed the early odds put up can differ a lot from the SP , depending on circumstances of course. Presumably the odds compilers take a view, then the market makers, finally the money really decides whether they agree with that view. I am working on the assumption that the market is moving from a disordered to a more orderly state as the event approaches. Entropy in reverse !

[Derek27]

My experience with horse racing markets:

Scheduled off time: Accurate, not much value to be had

Actual off time: Not that accurate, some value to be had (dependant on the delay)

BSP: Not accurate, value to be had

People may disagree and it is dependant on the odds/market but the above comes out in my data / pnl.

How do you actually calculate how accurate the prices are?

I used to make money betting with bookies and on the exchange and most of my successful punts were on horses that had been overlooked in the betting or were running in a race with a highly overrated favourite. These horses, on average, must have been value with the bookies so in many cases they would have been even bigger value on the exchange, 5 minutes before off, scheduled off-time and actual off-time.

[greenmark]

My reading of thoughts on this forum is that BSP is highly efficient. So if you were to bet using the same BSP you would end up breakeven minus commision.
The skill is in the analysis and selection process.
And that means being pretty damn smart or having inside information.

[Kafkaesque]

It'd probably be a reasonable assumption although maybe not an accurate one. Much of the last minutes activity is simply people getting on and bookmakers balancing liabilities, you could argue any book close to 100% is an accurate reflection of the odds long term. The majority of value bettors, who are probably the best judges, will simply bet when they see value, if they don't see it they won't bet.

If a bookmaker needs to balance anything late on by using the exchange, then someone needs firing. And will have been ages ago. Cannot see that ever being the case. They'd be burning money.

[Derek27]

My reading of thoughts on this forum is that BSP is highly efficient. So if you were to bet using the same BSP you would end up breakeven minus commision.
The skill is in the analysis and selection process.
And that means being pretty damn smart or having inside information.

With all due respect that is absolute nonsense greenmark. If you make money betting with bookies you may make even more at BSP which is generally higher. It may not be the case with favourites or horses heavily backed during the course of the day but just take a look at Timeform's Jury service results, if they still publish them. Last time I looked it made a decent profit to BSP.

If a horse starts with a BSP of 4.0 how does anyone prove that it had a 25% chance of winning? 25% winners doesn't prove that each and every one had a 25%, just that they average out at 25%. The proof of the pudding is whether anyone can profit long-term from betting at BSP, which would be impossible if BSP was accurate.

Take Detorri's latter mounts at Royal Ascot when he was in contention for a six-timer. Could anyone say that their BSPs were accurate? May be an extreme example but there are all sorts of factors that can distort what the public will bet on, not to mention traders throwing into the market whatever they have to to get out of a position.

[LinusP]

My experience with horse racing markets:

Scheduled off time: Accurate, not much value to be had

Actual off time: Not that accurate, some value to be had (dependant on the delay)

BSP: Not accurate, value to be had

People may disagree and it is dependant on the odds/market but the above comes out in my data / pnl.

How do you actually calculate how accurate the prices are?

I used to make money betting with bookies and on the exchange and most of my successful punts were on horses that had been overlooked in the betting or were running in a race with a highly overrated favourite. These horses, on average, must have been value with the bookies so in many cases they would have been even bigger value on the exchange, 5 minutes before off, scheduled off-time and actual off-time.

That would be telling

But going further:

10 minutes till start: Loads and Loads of value (issue is getting matched)

5 minutes till start: Loads of value

From 5 minutes to scheduled post things start to accelerate almost exponentially as bookies / professionals start getting their money on. Of course it’s all about your selections and knowing where this value is but at certain times prices are less informed.

[Atho55]

You can test how efficient the market is by comparing the BSP`s Implied Probability v Actual Outcome. Using 4.0 odds as an example, if the event is meant to return a win 25% of the time it`s also meant to lose 75% of the time.

Assuming I have 539 (lets say horses) that started with a BSP of 4.0. Of those 141 won and 398 lost. My implied win is 25% but my actual win is 26.16% and actual loss is 73.84%. Pretty efficient but still a 1.16% leaning towards a Back bet rather than a Lay bet.

So if the horse has a BSP of 4.0 and we secure odds greater for our Back bet then it may be an opportunity.

My 10p worth

[dt888]

It'd probably be a reasonable assumption although maybe not an accurate one. Much of the last minutes activity is simply people getting on and bookmakers balancing liabilities, you could argue any book close to 100% is an accurate reflection of the odds long term. The majority of value bettors, who are probably the best judges, will simply bet when they see value, if they don't see it they won't bet.

If a bookmaker needs to balance anything late on by using the exchange, then someone needs firing. And will have been ages ago. Cannot see that ever being the case. They'd be burning money.

What would they have done wrong to need firing? The recent daily blog by the bookie at Ascot confirms they will usually have a horse or two that will show a loss, and therefore an uneven book, so makes sense for them to even that out on the exchange if they can

[Naffman]

It'd probably be a reasonable assumption although maybe not an accurate one. Much of the last minutes activity is simply people getting on and bookmakers balancing liabilities, you could argue any book close to 100% is an accurate reflection of the odds long term. The majority of value bettors, who are probably the best judges, will simply bet when they see value, if they don't see it they won't bet.

If a bookmaker needs to balance anything late on by using the exchange, then someone needs firing. And will have been ages ago. Cannot see that ever being the case. They'd be burning money.

What would they have done wrong to need firing? The recent daily blog by the bookie at Ascot confirms they will usually have a horse or two that will show a loss, and therefore an uneven book, so makes sense for them to even that out on the exchange if they can

Star sports are a traditional bookie so they say they don't hedge and why would you when you're operating a 120% book?

There are some smaller time bookies that I have no doubt try and make pennies hedging from the course to the exchanges.

[LinusP]

Here is an example of one of my strategies (-100 is BSP)

Figure_1.png

[Emmson]

Further reading for forumites

https://www.betangel.com/blog_wp/2018/0 ... -exchange/

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