What is the purpose of seeding betfair markets?

[Brovashift]

Hi all,

I read a comment a few weeks ago about betfair seeding their markets and was just wondering why they do this.

Is it just to provide liquidity? and if so, who is providing it, betfair or a 3rd party?

And apart from providing liquidity, assuming thats what seeding is, what else are they aiming to do, in terms of profit margins. Are they looking to profit or just break even... as Im fairly confident they won't be a charity donating there money to hard up traders lol

TIA

[Kai]

I believe the answer lies in the gardening thread : viewtopic.php?f=18&t=21086

Why would anyone seed their own garden?? Their neighbours sure as hell won't do it

[Euler]

Good analogy. Betfair seed to kick start activity in their markets.

[Brovashift]

I was reading that gardening thread then with real enthusiasm in anticipation of answers

So is seeding a market just providing the initial money for punters/traders to kick things off. a bit like a casino or a fruit machine in the arcade, so payout money is avaialble should the first person happen to win the jackpot?

They're not actively participating in the market with a desire to "ensure preferred pricing" of selections?

[Derek27]

I was reading that gardening thread then with real enthusiasm in anticipation of answers

So is seeding a market just providing the initial money for punters/traders to kick things off. a bit like a casino or a fruit machine in the arcade, so payout money is avaialble should the first person happen to win the jackpot?

They're not actively participating in the market with a desire to "ensure preferred pricing" of selections?

I'd imagine if money's put into the market even at uncompetitive prices, it would encourage others to offer prices and tighten up the overround until prices get more competitive and bets get matched.

[Kai]

I was reading that gardening thread then with real enthusiasm in anticipation of answers

Sorry about that, although there is a lot of good advice in that thread, just not about trading

If Betfair can't have genuine liquidity on every market then the illusion of liquidity is sort of the next best thing. I imagine without seeders and market makers etc the markets would look very different.

[wearthefoxhat]

Hugh Taylor and/or his cohorts luv Betfair seeding.

Before they publish the day's tips on ATR, they hoover up the big prices and trade out accordingly, rinse repeat. Mind you, they have to be careful cos Betfair might do a smarkets and start blocking those accounts that are costing them seeding money, or increase their PC to 75%.

[Derek27]

I was reading that gardening thread then with real enthusiasm in anticipation of answers

Sorry about that, although there is a lot of good advice in that thread, just not about trading

If Betfair can't have genuine liquidity on every market then the illusion of liquidity is sort of the next best thing. I imagine without seeders and market makers etc the markets would look very different.

It induces good trading analogies. That was my intention when I started it.