Starting Prices aside, trading at BetFair becomes a little more complicated.
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BetFair:
Changes to Betfair’-s bet matching logic
Betfair Customer Services 11 Mar 17:32
Betfair is trialling an improved bet matching process. This work is ongoing and will affect a limited but growing number of markets, although horse racing markets are at present not affected. As there has been speculation about what this change involves we wanted to explain what is happening.
Previously we would only attempt to match customer bet requests against unmatched bets of the opposing bet type (backs vs. lays) on the same runner in the same market. That part of the bet matching process remains unchanged. Where there is no opposing bet to match on the same selection, rather than just leaving a customer’-s bet request unmatched, we will now attempt to match the bet request against unmatched bets on other runners.
For example in addition to matching back bets against lay bets we can from time to time match customer back bet requests across all selections, or customer lay bet requests across all selections. The effect of this change is that customer bet requests will stand a greater chance of being matched.
There will be circumstances where a customer bet request could be matched by either process. In this case priority will always be given to matching in the traditional way, back vs. lay, and the process for matching those bets is identical to the way this was done previously. Where a market is turned in-play and bets are subject to an in-play delay this also remains unaltered. Bets will only become available to be matched once the in-play delay has expired: backs vs. lays first followed by matching across selections where no other match was possible.
Previously if a customer requested a bet that we could not match against an opposing bet (back vs. lay) then that bet could only be matched at the price requested. Because we have not changed the existing matching process of back bets vs. lay bets that remains the case, although we expect to introduce price improvement where possible across selections too in future.
For customers with questions on how this change will affect them we will run a Q&-A session on the forum [*] at a date to be announced shortly.
[*] Quite needed.
From the description you quote, it sounds as if BetFair is using a technique similar to that explained by Chris Hibbert in "Increasing Liquidity in Multi-Outcome Claims." (For more, see Hibbert’s "Market Makers for Multi Outcome Markets" and Dave Pennock’s "Right Way to Implement a Multi-Outcome Market.") If they’ve done something like this, it should make their markets work more efficiently. Personally, I’m not sure why they’d privilege the traditional back vs. lay if there were a more complicated match that offered a better price, but it is a start in a good direction.
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