New thread so this can be discussed properly in it's own thread.
Not sure the title is correct, as we may be looking at something else. But the M word was the most popular.
Orignal context in the thread - viewtopic.php?f=5&t=7400&start=329
Feel free to re-post to this thread so the discussion can continue in a readable manner.
Market manipulation on Betfair horse racing markets
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steven1976
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I think its important to understand the different types of manipulation as its easy to just chuck around the "M" word without really knowing what is happening.
For me the easiest way to understand manipulation is looking at the stock markets where it has been happening for years and see what happens there and take it to BF and decide if similar things happen on BF.
Taken from Wiki
"Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradeable security."
TBC
For me the easiest way to understand manipulation is looking at the stock markets where it has been happening for years and see what happens there and take it to BF and decide if similar things happen on BF.
Taken from Wiki
"Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradeable security."
TBC
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
From Wiki
Examples of types of manipulation.
Pools: "Agreements, often written, among a group of traders to delegate authority to a single manager to trade in a specific stock for a specific period of time and then to share in the resulting profits or losses."
My comment - It wouldn't surprise me if groups of people are working together to control prices. If the book takes an order on one horse, someone else monitors a price to move out another price. Im not at all saying that happens, Im just saying it is not beyond reason.
Churning: "When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price."
My comment - Id imagine most people offer to both sides of the book.
Stock Bashing: "This scheme is usually orchestrated by savvy online message board posters (a.k.a. "Bashers") who make up false and/or misleading information about the target company in an attempt to get shares for a cheaper price.
My comment - Not sure this happens although there are times when certain posters offer up their tips which offer a lot of value for many people as I think that may be a number of traders are willing to stay with a trade for longer. Just for the record Im talking about JG and hope he is doing well with his health.
Pump and dump:
"This scheme is generally part of a more complex grand plan of market manipulation on the targeted security. The Perpetrators (Usually stock promoters) convince company affiliates and large position non-affiliates to release shares into a free trading status as "Payment" for services for promoting the security. Instead of putting out legitimate information about a company the promoter sends out bogus e-mails (the "Pump") to millions of unsophisticated investors (Sometimes called "Retail Investors") in an attempt to drive the price of the stock and volume to higher points. After she accomplishes both, the promoter sells her shares (the "Dump") and the stock price falls like a stone, taking all the duped investors money with it."
Runs:"
My comment - I don't really see this happening because any crazy movements from 2 to 10 the market would correct itself as genuine backers come in.
Bear raid: "Attempting to push the price of a stock down by heavy selling or short selling.
My comment - I think we see this often with big walls of money coming into the market stacking up the big money about 3-4 ticks behind itself. At the end of the day, most traders offer money to the market so it would get little resistance unless there is a lot of genuine backers or layers in the markets and the big rushes of money either encourage others to try queue jumping or get into a scalp position behind which actually offers a sell out point.
Wash trade: "Selling and repurchasing the same or substantially the same security for the purpose of generating activity and increasing the price".
My comment - This to me is the biggest problem with short term selling. People are taking small entry positions and then "the market" moves against the new small money and also against the markets own money to wash the money at a new price. If no new money enters they will simply keep chucking their own money backwards and forwards at the new level long enough for new money to enter the market. If no new money arrives, they would move back and take a small loss as a last resort.
Front running - is the illegal practice of a stockbroker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers. When orders previously submitted by its customers will predictably affect the price of the security, purchasing first for its own account gives the broker an unfair advantage, since it can expect to close out its position at a profit based on the new price level. The front running broker either buys for his own account (before filling customer buy orders that drive up the price), or sells (where the broker sells for its own account, before filling customer sell orders that drive down the price).
My comments - I think when X matching was introduced it was discussed that queue jumping was taking place.
Examples of types of manipulation.
Pools: "Agreements, often written, among a group of traders to delegate authority to a single manager to trade in a specific stock for a specific period of time and then to share in the resulting profits or losses."
My comment - It wouldn't surprise me if groups of people are working together to control prices. If the book takes an order on one horse, someone else monitors a price to move out another price. Im not at all saying that happens, Im just saying it is not beyond reason.
Churning: "When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price."
My comment - Id imagine most people offer to both sides of the book.
Stock Bashing: "This scheme is usually orchestrated by savvy online message board posters (a.k.a. "Bashers") who make up false and/or misleading information about the target company in an attempt to get shares for a cheaper price.
My comment - Not sure this happens although there are times when certain posters offer up their tips which offer a lot of value for many people as I think that may be a number of traders are willing to stay with a trade for longer. Just for the record Im talking about JG and hope he is doing well with his health.
Pump and dump:
"This scheme is generally part of a more complex grand plan of market manipulation on the targeted security. The Perpetrators (Usually stock promoters) convince company affiliates and large position non-affiliates to release shares into a free trading status as "Payment" for services for promoting the security. Instead of putting out legitimate information about a company the promoter sends out bogus e-mails (the "Pump") to millions of unsophisticated investors (Sometimes called "Retail Investors") in an attempt to drive the price of the stock and volume to higher points. After she accomplishes both, the promoter sells her shares (the "Dump") and the stock price falls like a stone, taking all the duped investors money with it."
Runs:"
My comment - I don't really see this happening because any crazy movements from 2 to 10 the market would correct itself as genuine backers come in.
Bear raid: "Attempting to push the price of a stock down by heavy selling or short selling.
My comment - I think we see this often with big walls of money coming into the market stacking up the big money about 3-4 ticks behind itself. At the end of the day, most traders offer money to the market so it would get little resistance unless there is a lot of genuine backers or layers in the markets and the big rushes of money either encourage others to try queue jumping or get into a scalp position behind which actually offers a sell out point.
Wash trade: "Selling and repurchasing the same or substantially the same security for the purpose of generating activity and increasing the price".
My comment - This to me is the biggest problem with short term selling. People are taking small entry positions and then "the market" moves against the new small money and also against the markets own money to wash the money at a new price. If no new money enters they will simply keep chucking their own money backwards and forwards at the new level long enough for new money to enter the market. If no new money arrives, they would move back and take a small loss as a last resort.
Front running - is the illegal practice of a stockbroker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers. When orders previously submitted by its customers will predictably affect the price of the security, purchasing first for its own account gives the broker an unfair advantage, since it can expect to close out its position at a profit based on the new price level. The front running broker either buys for his own account (before filling customer buy orders that drive up the price), or sells (where the broker sells for its own account, before filling customer sell orders that drive down the price).
My comments - I think when X matching was introduced it was discussed that queue jumping was taking place.
Last edited by steven1976 on Wed Aug 14, 2013 4:14 am, edited 2 times in total.
That's one view of market manipulators. Another is that they are part and parcel of the market.
I would say that for a trader to complain about market manipulation is like a poker player complaining about an opponent's bluffing or a footballer objecting to his opponent doing a dummy.
They act legally and play by the rules of the game. Also, whilst they create problems for some people, they create opportunities for others.
Jeff
I would say that for a trader to complain about market manipulation is like a poker player complaining about an opponent's bluffing or a footballer objecting to his opponent doing a dummy.
They act legally and play by the rules of the game. Also, whilst they create problems for some people, they create opportunities for others.
Jeff
steven1976 wrote: "Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency."
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
As long as it's all played on a level playing field I have no concerns Jeff. Betdaq is much fairer as we can all match our own bets backwards and forwards and they appear as matched bets. On BF this doesn't happen for single account users.
Manipulation to a certain extent is part and part of the parcel but as you will see in the stock market in the US the SEC want to ban wash trades. It's not because it's all part and parcel of the market. If people want to risk their money by putting large amounts on show being "market makers" that is one thing, but if they then match large amounts of their own money (cough, bomber), or even small amounts, to me that isn't playing on a level playing field with 99% of the market.
Just out of interest are you for or against the banks that manipulated the house market in US?
Manipulation to a certain extent is part and part of the parcel but as you will see in the stock market in the US the SEC want to ban wash trades. It's not because it's all part and parcel of the market. If people want to risk their money by putting large amounts on show being "market makers" that is one thing, but if they then match large amounts of their own money (cough, bomber), or even small amounts, to me that isn't playing on a level playing field with 99% of the market.
Just out of interest are you for or against the banks that manipulated the house market in US?
It's not an issue on which I am qualified to comment, other than to say that I don't have an issue with companies maximising their profits as long as they are operating within the law.
If they harm society by doing so, then the laws deserve to be criticised, not the profit-maximising companies.
Jeff
If they harm society by doing so, then the laws deserve to be criticised, not the profit-maximising companies.
Jeff
steven1976 wrote: Just out of interest are you for or against the banks that manipulated the house market in US?
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
I'm away at the moment, so my comments are just general as to what I see. So no idea on this week's horses.Euler wrote:16:45 was an interesting case study!
Bed time. Enjoy!
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
I just saw on the other thread that the market "malformed" and bf cancelled all bets.Euler wrote:16:45 was an interesting case study!
How is it possible for a market to malform? Someone offers and someone takes if they see value.
If bf market makers bots go mental then it's surely up to the captain to steer the boat, not just cancel a market because something went wrong.
I bet Knight Capital wish they had BF controlling the stock markets!
Exactly, remember how I suggested in the other thread trying to over-power Betfair manipulation with massive betting?steven1976 wrote:I just saw on the other thread that the market "malformed" and bf cancelled all bets.Euler wrote:16:45 was an interesting case study!
How is it possible for a market to malform? Someone offers and someone takes if they see value.
If bf market makers bots go mental then it's surely up to the captain to steer the boat, not just cancel a market because something went wrong.
I bet Knight Capital wish they had BF controlling the stock markets!
I think the Flasher did exactly that, and look what happened. Betfair manipulators lost control of the market, and what did they do? Simply void the bets and declare 'malformed'.
Sorry for the interruption, but I didn't know where else to post this chart so I came to this thread.
I'm not saying that this IS manipulation, But I swear I'm not under the influence of alcohol.
I didn't notice it while I was trading this Mdn race at Gowran Park yesterday (because my attention was on the loss I made trying to swing it), but when I watched this video today I saw this.
What do you make of it fellas?
Please let me know if you would like me to post the video. Can do it.
I'm not saying that this IS manipulation, But I swear I'm not under the influence of alcohol.
I didn't notice it while I was trading this Mdn race at Gowran Park yesterday (because my attention was on the loss I made trying to swing it), but when I watched this video today I saw this.
What do you make of it fellas?
Please let me know if you would like me to post the video. Can do it.
You do not have the required permissions to view the files attached to this post.
Just looks like the chart isn't being plotted properly IMHO. Betfair charts are not very good.
I've haven't looked in detail but it's possible you may be able to see the same thing on here: -
http://www.youtube.com/watch?v=_g9U_z7IsNE
I've haven't looked in detail but it's possible you may be able to see the same thing on here: -
http://www.youtube.com/watch?v=_g9U_z7IsNE
