Degree of trading in movement

[stueytrader]

What would people estimate as the amount of exchange movement that is caused directly by trader actions alone?

Versus the amount of market movement that is caused by reaction to real world events/factors - or essentially those trying to take a view on the effect on the outcome for the market.

I think this may also be different possibly in different types of sport/market?

My personal estimate is that there is at least 50% of movement in horse racing that is trader-based solely. Though others may disagree...?

[megarain]

I was hoping for a uni course

Disappointed

[Kafkaesque]

I've got no opinion on horses, but I do find it hugely interesting, if your estimate is anywhere near correct.

For football I'd say less than 10% for markets with any sort of serious liquidity. For the biggest tournaments well below 10%.

[Atho55]

Could you get an idea by using the ISP as the benchmark price then look at the extent of the action above and below as a pointer to the "trading" volume. It`s probably time relative as the odds move from initial declaration but start -5mins may be a reasonable start point

[stueytrader]

I was hoping for a uni course

Disappointed

sorry for the wording of the title, perhaps should have said amount...

[stueytrader]

Could you get an idea by using the ISP as the benchmark price then look at the extent of the action above and below as a pointer to the "trading" volume. It`s probably time relative as the odds move from initial declaration but start -5mins may be a reasonable start point

Interesting idea, not totally sure how it would tell specifically trading, but I guess relation to outcome SP is a starting point.

[stueytrader]

I suppose another way to phrase this question is, are traders making/developing the markets or simply making use of the moves created by bigger and more position takers who are competing with one another? I believe it can help in thinking about why the market will move in some cases.

[Derek27]

I was hoping for a uni course

Disappointed

You can have an honorary degree in trading.

[Derek27]

The bulk of racing turnover comes in the last 15 minutes and the momentum of the price movements at that time makes me feel the bulk of the money going into the market is trader's money.

Somebody who wants a £100 will place it, and that's it, the money's gone. A trader with an equal amount of funds as the bettor will have no limit to his turnover and may keep trading and re-trading, racking up £1000s.

[Atho55]

Stuey, ISP perhaps not the best thing to call it. If the Bookies have it at 6`s all day and the Exchange ranges from 3`s to 12`s then could the trading be measured from the volume above up to 12`s and below to 3`s

[stueytrader]

From the replies above it seems that my estimate for the market being around 50% trading created may have been an underestimate then...? More like 70-80% or above!

I suppose one point is also that all punters have to some degree taken onboard a trading element to their thinking when using an exchange - you have to blind not to notice the fact that prices constantly change and offer opportunities to enter and exit the market now.

Maybe there are less and less actual straight position punters using the exchanges - as Derek says those people come and go in a moment on the exchange, whether winning or losing.

[spreadbetting]

From the replies above it seems that my estimate for the market being around 50% trading created may have been an underestimate then...? More like 70-80% or above!

I think you'll find traders always like to overestimate their importance and volume in the markets.

[stueytrader]

From the replies above it seems that my estimate for the market being around 50% trading created may have been an underestimate then...? More like 70-80% or above!

I think you'll find traders always like to overestimate their importance and volume in the markets.

So, you'd estimate lower for the amount caused by trading alone...?

[spreadbetting]

Yes

[LinusP]

From the replies above it seems that my estimate for the market being around 50% trading created may have been an underestimate then...? More like 70-80% or above!

I think you'll find traders always like to overestimate their importance and volume in the markets.

I agree, just look at markets where there has been a delay but then it depends on what you mean by movement.