Momentum traders? Betting exchange markets are still efficient in terms of the market %.
So momentum traders crashing a price on horse will naturally create other horses to drift and thus cause other opportunities as the market settles to near 100%.
Small punters get better prices out of it. If the market is 100.5%, then they’re getting a fair price on their money.
Using market information is what every bookmaker does every day of the week in virtually every market he prices up. Momentum traders are doing nothing else.
You can’t expect to get the same price on a betting exchange as you do at the bookies on every selection. That applies to every sport not just horse racing.
Many have noticed the lack of early priced horse racing turnover has nothing to do with momentum traders. The market has evolved and reached it’s equilibrium.
People have found out that sticking larger offers up across the board costs them money overall, so they have curtailed the amounts to fit in with demand at that point in time.
Horse racing suffers more than most because it’s harder to determine the correct price and because of the genuine fear of inside information. You’ll also find that most successful traders are not momentum traders and are very opinionated.
Traders are very keen on the economics of movement towards the market equilibrium, but what about the economics of giving away something for nothing? Informed tissue-makers (if they want an early bet in size) have in effect to give away their pricing for scant chance of being matched.
Of course, traders either drip-feed or have to wait until closer to the off.
Is the same amount of money matched in effectively the only market, as it would be in early/evolving, than late markets? Not necessarily; often, the price has moved past the point where the opinion players want to play.
The winners in the fight for the late money may be predominantly technically oriented, rather than judgment-based gamblers.
Technical traders winning is equally merited and their strategy equally legitimate.
But what about a style-neutral interface?
Momentum/WOM bots can take from losers as they do at the moment (typically by some sleight that involves putting up a worse offer than is likely to be immediately available), and tissue-makers can take from losers in having them blunder into out-of-line bets.
Why should penny-size traders be able to play in the early markets to the exclusion of traditional big winners?
The answer may be it’s the market we operate in. Late money is found to be the most accurate prediction of true outcome probabilities and the greater the late odds movement in an entrant, the higher its probability of winning. Simply, bet late and bet often.