Market Making

[mantas779]

why is it that in a new market there are only LAY orders ?
What is the matmetic calculation behind it?

When you put on a big market ( tennis) with lay orders , you won't get filled on all bets , only the short ones , so you miss the LAY money from the long bets , if i calculate this, you can't never make money this way?
iow , you have to get all fills together above 100% of the market to make money.

offcourse i know, that they don't put it up there for charity.

Does anyone know the mathmetic idea behind it?

all repleý's are welcome.

[Captain Sensible]

You'll find many market makers will stick up prices based on their own probability of the outcome with a built in % (take) i.e they'll work out their idea of the true odds knock off 5-10% for their book and hope their knowledge of the sport is good enough to make a profit. If you can price things accurately enough then you'll make a profit long term just by having the %'s in your favour

[Captain Sensible]

You'll find most markets are formed with lay bets as it's still a bookmaker mentality for laying a market rather than backing as you hope the less informed will be backers. Many will just bot the bookmakers odds and stick them up as someone else as worked ou your odds. Others will fill all boxes in the market to give a false impression of the actual market in the hope of duping people into that market by giving a false impression of the actual odds. Obviousy theres lots of other reasons why the markets form early and as soon as prices go up the bots come in and fight each other.

[mantas779]

thx , for explaining , i also thought about your explanations .
this gives food for thought.