Tips for Tikay - spread betting on the side

[DungBeetle]

opening an account

The old days, a little bit of KYC to go through and you could have a credit account with weekly settlement either direction.  Now you are far more unlikely to be offered a credit account and instead must put up margin to cover the bet liability.  So if a bet can swing 100 pts and you want to bet a £1 of it, you will have to have a balance of £100+ to place the bet.  Likewise with fixed odds season bets, this can gunk up your account.  If Fred wan't any season-long spread action, it would need to be with someone with a functioning credit account.

buyer or seller

What Jamie ^^ said may be true, but what I think is even more relevant is knowing your maximum liability.  For example, a football match where you can bet on the total shirt numbers of scorers.  The quote might be 42-45.  Buyers paying 45 immediately know thier maximum liability, as the worst possible result is 0-0 and they are sunk 45 pts.  Sellers selling at 42 get the opposite.  Their best possible result is 42pts, their worst possible result runs into several hundred, particularly when you have guys running around the pitch with 58 on their shirt.  Don't ever say in markets like that "he can't get a hatrick from midfield" .... at some point those 7-4 games do go in and it is very very painful if you get caught with your pants down.  I haven't worked for a spread firm, but I;d imagine on that quote of 42-45, the majority of punters will be buyers, for this reason.  Knowing this in advance, the firm may decide that true value is 42, but skew their quote to "fair bid, expensive offer" knowing that people will pay up.

arbing

I guess somone else on here might have something to chip in on this   In the very old days, for example cricket opening runs, with several companies in the industry, arns were regularly open.  One firm might open 340-360 whilst another firm opens 370-390.  Hopefully even first timers here will quickly work out how to take 10 risk-free points out of the game here.  Naturally, those arbs didn't stay open too long and often firms would limit your stake when they knew there was an overlap and/or mark your account up as an arber.  There are more complicated arbs, probably beyond the scope of this, but just to get your minds whirring a bit... Let's say firm 1 goes 350-370 and firm 2 goes 370-390.  Well obviously if you are selling, you are selling to firm 2 and if you are buying, you are buying from firm 1 and there doesn't look to be an arb there.  But there could well be!  If firm 1 has no stop loss, but firm 2 has a 200 run stop loss, you do have an arb.  In trading parlance, you can buy the 570 call options for free.  How you do this is you buy at 370 from firm 1 and you sell at 370 (with a stop loss) with firm 2.  Most results will see you break perfectly even ofc, and your hassle is to move money around.  However, on the rare occasion where the team plunders 570 runs, notice that you are stopped out of your sell position with firm 2, but still running your long position "for free" with firm 1.  So you will make 1x your unit stake for each run > 570.  Nice when it happens... it doesn't happen a whole lot.  You want a very volatile market and as small as possible stop loss.  And 2 accounts, funnily enough.

I don't think the stop loss gives you a risk free arb.  It is a long time since I had a spread account, so this is from memory.  You have and sell at 370 with a stop loss at 570, England are motoring along at 400-4.  The quote can then move above 570 triggering the stop loss on the sell.  England then completely collapse and the final total is 450.  Hence you lose 120 x your stake.

Yeah - think you are right.

[tikay]

Thanks Simon.

So, for Fred purposes.....

1) We could deposit a reasonably modest account for short term bets  - individual games or events which take place in the near term.

2) For potentially volatile long-term stuff - "Season" football bets, Ashes Series, future Elections, that sort of thing, it would not really work for us, as we'd tie up so much of our Bankroll for too long. 

Have I got that right?

For (2) you're probably best off using my account as I've got an old style account with credit facility.  For example the 3 long term football trades we have at the moment we can just settle either way at the end of the season with no need for margin.    I think a couple of the other guys on TFT have these as well.

For (1) you should open your own account and stick £500 in for short term stuff.  You also get a free bet I think (Peter said it was £100 risk free trading for a week).

1) Yes, I think we'll likely go that route, but I'll speak to Tighty first. Simon Galloway offered us some referral incentive, as I recall, so when we do, I'll speak to him.


2) Thank you very much, that's very kind, & most useful.

 

[DungBeetle]

opening an account

The old days, a little bit of KYC to go through and you could have a credit account with weekly settlement either direction.  Now you are far more unlikely to be offered a credit account and instead must put up margin to cover the bet liability.  So if a bet can swing 100 pts and you want to bet a £1 of it, you will have to have a balance of £100+ to place the bet.  Likewise with fixed odds season bets, this can gunk up your account.  If Fred wan't any season-long spread action, it would need to be with someone with a functioning credit account.

buyer or seller

What Jamie ^^ said may be true, but what I think is even more relevant is knowing your maximum liability.  For example, a football match where you can bet on the total shirt numbers of scorers.  The quote might be 42-45.  Buyers paying 45 immediately know thier maximum liability, as the worst possible result is 0-0 and they are sunk 45 pts.  Sellers selling at 42 get the opposite.  Their best possible result is 42pts, their worst possible result runs into several hundred, particularly when you have guys running around the pitch with 58 on their shirt.  Don't ever say in markets like that "he can't get a hatrick from midfield" .... at some point those 7-4 games do go in and it is very very painful if you get caught with your pants down.  I haven't worked for a spread firm, but I;d imagine on that quote of 42-45, the majority of punters will be buyers, for this reason.  Knowing this in advance, the firm may decide that true value is 42, but skew their quote to "fair bid, expensive offer" knowing that people will pay up.

arbing

I guess somone else on here might have something to chip in on this   In the very old days, for example cricket opening runs, with several companies in the industry, arns were regularly open.  One firm might open 340-360 whilst another firm opens 370-390.  Hopefully even first timers here will quickly work out how to take 10 risk-free points out of the game here.  Naturally, those arbs didn't stay open too long and often firms would limit your stake when they knew there was an overlap and/or mark your account up as an arber.  There are more complicated arbs, probably beyond the scope of this, but just to get your minds whirring a bit... Let's say firm 1 goes 350-370 and firm 2 goes 370-390.  Well obviously if you are selling, you are selling to firm 2 and if you are buying, you are buying from firm 1 and there doesn't look to be an arb there.  But there could well be!  If firm 1 has no stop loss, but firm 2 has a 200 run stop loss, you do have an arb.  In trading parlance, you can buy the 570 call options for free.  How you do this is you buy at 370 from firm 1 and you sell at 370 (with a stop loss) with firm 2.  Most results will see you break perfectly even ofc, and your hassle is to move money around.  However, on the rare occasion where the team plunders 570 runs, notice that you are stopped out of your sell position with firm 2, but still running your long position "for free" with firm 1.  So you will make 1x your unit stake for each run > 570.  Nice when it happens... it doesn't happen a whole lot.  You want a very volatile market and as small as possible stop loss.  And 2 accounts, funnily enough.

I don't think the stop loss gives you a risk free arb.  It is a long time since I had a spread account, so this is from memory.  You have and sell at 370 with a stop loss at 570, England are motoring along at 400-4.  The quote can then move above 570 triggering the stop loss on the sell.  England then completely collapse and the final total is 450.  Hence you lose 120 x your stake.

Actually thinking about this it depends how the stop loss works.  I've never used them but do you actually get unwound during the event and left with no position, or do they settle everything and then your losses are capped at £200?  If it's the latter then the strategy works.

[Simon Galloway]

It doesn't trigger your stop loss as soon as the market goes 570 bid. It's been a while... But pretty sure it is just done on settlement. If you think about it, it is not like a general market where no-one knows where all the stops are. Sporting know where your stop is and while they probably wouldn't, there would be a shady opportunity to bid up their price where they could to stop you out.

Otoh, if you are buying runs on a stop as a straight bet, you definitely should close out as soon as it goes 570 bid as that is the max you can make, no need to risk a batting collapse thereafter

[Doobs]

Thanks Simon.

So, for Fred purposes.....

1) We could deposit a reasonably modest account for short term bets  - individual games or events which take place in the near term.

2) For potentially volatile long-term stuff - "Season" football bets, Ashes Series, future Elections, that sort of thing, it would not really work for us, as we'd tie up so much of our Bankroll for too long. 

Have I got that right?

For (2) you're probably best off using my account as I've got an old style account with credit facility.  For example the 3 long term football trades we have at the moment we can just settle either way at the end of the season with no need for margin.    I think a couple of the other guys on TFT have these as well.

For (1) you should open your own account and stick £500 in for short term stuff.  You also get a free bet I think (Peter said it was £100 risk free trading for a week).

1) Yes, I think we'll likely go that route, but I'll speak to Tighty first. Simon Galloway offered us some referral incentive, as I recall, so when we do, I'll speak to him.


2) Thank you very much, that's very kind, & most useful.

 

We have an edge in spread betting?  It is not entirely obvious to me.

[DungBeetle]

Thanks Simon.

So, for Fred purposes.....

1) We could deposit a reasonably modest account for short term bets  - individual games or events which take place in the near term.

2) For potentially volatile long-term stuff - "Season" football bets, Ashes Series, future Elections, that sort of thing, it would not really work for us, as we'd tie up so much of our Bankroll for too long. 

Have I got that right?

For (2) you're probably best off using my account as I've got an old style account with credit facility.  For example the 3 long term football trades we have at the moment we can just settle either way at the end of the season with no need for margin.    I think a couple of the other guys on TFT have these as well.

For (1) you should open your own account and stick £500 in for short term stuff.  You also get a free bet I think (Peter said it was £100 risk free trading for a week).

1) Yes, I think we'll likely go that route, but I'll speak to Tighty first. Simon Galloway offered us some referral incentive, as I recall, so when we do, I'll speak to him.


2) Thank you very much, that's very kind, & most useful.

 

We have an edge in spread betting?  It is not entirely obvious to me.

Too early to say due to sample size but Fred's 5 early trades all look decent.  Especially the Force India and Mercedes trades.  If it's used sparingly then I think it can be a useful tool for TFT to take views that are hard to capture with fixed odds (eg anti mercedes/pro Watford).  Ths issue will be the temptation to over use it on daily stuff and you get chomped up by bid/offer.

[Simon Galloway]

We don't have an edge in spread betting, but it is another string to our bow.

Fred can't get on in many spots, so if nothing else, it's definitely a way to get on.

Next up, spreads can often be compared to fixed odds. For example, on a 50 index, something priced 3-5, buying it can be converted to 9/1 ftw, and some 16/5 and 5/5 for places, assuming 50-25-10-0. Most of the time, the width of the spread means this will never be best price, but once in a while, you get a market perhaps with 2 events to go where the spread price for the next event is more or less best price, plus you get a free event to follow where you might bink a freebie. They don't happen often and they don't stay open for long, tbf

[tikay]

Thanks Simon.

So, for Fred purposes.....

1) We could deposit a reasonably modest account for short term bets  - individual games or events which take place in the near term.

2) For potentially volatile long-term stuff - "Season" football bets, Ashes Series, future Elections, that sort of thing, it would not really work for us, as we'd tie up so much of our Bankroll for too long. 

Have I got that right?

For (2) you're probably best off using my account as I've got an old style account with credit facility.  For example the 3 long term football trades we have at the moment we can just settle either way at the end of the season with no need for margin.    I think a couple of the other guys on TFT have these as well.

For (1) you should open your own account and stick £500 in for short term stuff.  You also get a free bet I think (Peter said it was £100 risk free trading for a week).

1) Yes, I think we'll likely go that route, but I'll speak to Tighty first. Simon Galloway offered us some referral incentive, as I recall, so when we do, I'll speak to him.


2) Thank you very much, that's very kind, & most useful.

 

We have an edge in spread betting?  It is not entirely obvious to me.

I was not suggesting that, I was addressing 2 matters.

1) I'd like to learn about it, generally, just as Fred had to learn so many things at the outset.

2) We have been using the accounts & kind hospitality of Dung, & Joe Beevers, & I feel a bit as if we are taking liberties in assuming that can continue. If they don't mind continuing "as is", I'm fine with that.


A handful of decent spots were suggested, some of which looked OK, I was just thinking out loud really. Old dogs, new tricks & all that. I'm as far removed from "Insane Hedge" thinking as anyone could be.....

[BorntoBubble]

Doobs I was always of the opionion that SPIN and Betfair were kind of similar in that you looked to them for the "correct" price.

But as has been seen this year Peter has found some great spot's, some have been thrown up on the football as well. I do think the margin's in which you can beat them in wont be as great as other market's but 2/3% here and there always helps.

I also think that its a high risk low reward kind of place but with the strict Bankroll management that TFT and others try and follow that should not be an issue also.

After all, they cannot be right ALL the time can they?!

[Doobs]

Doobs I was always of the opionion that SPIN and Betfair were kind of similar in that you looked to them for the "correct" price.

But as has been seen this year Peter has found some great spot's, some have been thrown up on the football as well. I do think the margin's in which you can beat them in wont be as great as other market's but 2/3% here and there always helps.

I also think that its a high risk low reward kind of place but with the strict Bankroll management that TFT and others try and follow that should not be an issue also.

After all, they cannot be right ALL the time can they?!

Peter is clearly getting his sizing all wrong, I don't think Simon knows how the stops work and Tikay has previous.  I think it is much harder to spot value as you need to know more about the underlying distribution. Plus it is much easier to do your nuts spreadbetting and I have been there. 

[tikay]

Doobs I was always of the opionion that SPIN and Betfair were kind of similar in that you looked to them for the "correct" price.

But as has been seen this year Peter has found some great spot's, some have been thrown up on the football as well. I do think the margin's in which you can beat them in wont be as great as other market's but 2/3% here and there always helps.

I also think that its a high risk low reward kind of place but with the strict Bankroll management that TFT and others try and follow that should not be an issue also.

After all, they cannot be right ALL the time can they?!

Peter is clearly getting his sizing all wrong, I don't think Simon knows how the stops work and Tikay has previous.  I think it is much harder to spot value as you need to know more about the underlying distribution. Plus it is much easier to do your nuts spreadbetting and I have been there. 

Amen to that.

This is almost like fancying a cigarette after quitting for 5 years.

[Simon Galloway]

I have a stop loss account. I've never been stopped out. I have had bets settled as a stop. Whilst I don't bet the free call options with stops, I know someone who does. I've stood on an open outcry futures trading floor for many years and am not unfamiliar with stops, or watching them get triggered, or watching people trying to probe the market to trigger other people's stops.

If you had a short position at 370, when the quote was 565-585, it would be pretty easy for them to just go 570 bid , stop you out without taking any action and then go 565 bid again.

If you can point me to some evidence that it is wrong, that would be great. Regardless, it isn't going to matter too much for anyone unfamiliar with spreads...they still have some greenhorn pain to go through, such as flip-flopping favs in supremacy markets.

[DungBeetle]

Think Simon might be right Doobs:

"Stop Loss limits your exposure to losses (but also to profits because it acts identically as a Stop Win) by automatically applying a maximum level to the trades at the time the bet is struck. Effectively we are placing a pre-set limit on any profit or losses that may arise from any given bet."

I read "pre-set limit" that as you put a bet on and then when the event is complete your losses are capped both ways?  (i.e. no mid event close out)

I've never used stop losses though so just my reading of the rules.

[Doobs]

A stop loss will automatically close the bet if the spread moves against the gambler by a specified amount.  (C)Wikipedia

Stop losses are just pissing away equity anyway (c) Doobs

They aren't automatic on bets, you have to set them unless the world has changed since I was involved.

[Simon Galloway]

They are automatic on bets when you have a stop-loss spread account. At the time of placing a bet, the stop-loss/win is preset