Sharp traders are always after better commission (and opportunities).
Sadly, no-ones rattled the monopolies cage enough yet…
BUT, will SMARKETS do it soon? Hopefully.
I’ve got some tasty gossip for you, along with a full smarkets review. Be sure to absorb the lot!
Before we spill the beans, there’s a list of quick-links to various points within this comprehensive review:
- Public Trading API
- Commission Rates
- Market Liquidity
- SMARKETS v Betfair Comparison
- Sign Up Bonus
- Safety & Reliability of Use
Long-term readers may remember smarkets invited me up to their box at QPR a while back. To be honest, at the time I wasn’t sure why. It’s rare that I turn down an opportunity for a beer though, so didn’t seen any harm in it.
Sorry if you’re a QPR fan but that part was lost on me, I don’t devote a lot of attention to football right now.
Anyway, aside from the hospitality and meeting some of the team, the message was clear; smarkets want trading customers. They told me they were planning a public API (for trading use).
Whilst that sounded great, I wasn’t interested until they could give me more detail…
SMARKETS Trading: API Release Date?
Since my brief encounter mentioned above, there’s more!
I can now confirm for you that, smarkets plan to launch an API for public use. I can’t pin them down on an exact date, although they told me the ‘current estimate’ was 6 months (mid 2018). Not that long, especially when you consider they told me this last month!
So, what does that mean for us as traders?
For a start it means Betfair are likely to have a little more competition for the flat racing season, possibly even Cheltenham? Maybe. But there’s so much more to consider, hence the rest of this article.
More opportunities? Less commission? No premium charge? or will it mean diluted liquidity elsewhere?
Either way, it’s probably worth getting set up to find out. The initial response is to be a little pessimistic, Betfair haven’t been turned over after all this time and still hold the lion-share when it comes to betting exchanges. However, in recent years they seem to be opting more and more towards a sports-book model. Could this possibly be the time when all those ‘unloved’ customers jump ship?
I guess only time will tell but there’s a pretty big incentive to use other exchanges with reduced commission rates. Just this week they’ve added streaming charts the site, shown below.
Previously, the green exchange has been more appealing to those who are arbitrage betting. A significantly lower flat rate commission of 2% is ideal.
Smarkets commission rate is calculated the same way as Betfair. In the sense that, net winnings are charged a flat fee of 2% (instead of 5%). Regardless of your betting style, back, lay or trade the 2% is taken from profit.
For example, If you placed a winning back bet of £50 on X horse at 3.0 the commission is calculated by smarkets like this:
((£50*3.0)-£50)*2% = £2
With the net winnings being £100 it’s easy to see the overall commission. For those trading, the 2% just comes out of your overall hedged figure. For example, a £10 profit would be charged 20p commission. Simple, right?
For traders, this could be pretty awesome news. Especially when you consider there is no premium charge (Betfair’s super-tax on winners).
If you’re still unsure, you can check out the commission and terms on smarkets site.
Worth it or Not? SMARKETS Liquidity
The slightly negative part; smarkets liquidity isn’t that great at the time of writing. However, it is better than I had assumed it would be…
Seen above, one of those lower grade, bread and butter races at Lingfield. The ones you see on a daily basis.
If you look to the top left, ten minutes from the start there is £27,077 matched. Not a massive amount but shortly after taking the snapshot, money started to flow. The unmatched amounts could do with increasing a little more if smarkets trading is to become a thing of the future.
That’s not to say that smarkets wouldn’t be of use around events like Cheltenham and Ascot. With proper trading tools and a public API it may turn out similar to Betdaq in the sense that the bigger meetings aren’t so hard to skim some tidy profits, at reduced commission rates.
On the whole, liquidity is one concern if I was to plough all my time and effort into using them. Something to keep an eye on.
SMARKETS v Betfair: Best Option?
The news of a smarkets releasing a public API in 2018 is pretty exciting, but lets take a look at how the two compare right now…
To make this the fairest possible comparison it’s only fair to say that Betfair’s exchange takes a lot more strain than that of smarkets. Although, Betfair does have far more cash to play with. Sad to see Betfair haven’t reinvested more into the exchange in recent years. Site outages, when managing large positions can be a scary experience.
Whilst I haven’t really used smarkets, I haven’t seen any complaints of random outages.
As far as the two sites go, they’re quite similar. To us as traders it doesn’t matter so much, but it’s nice to see smarkets hasn’t jumped on the sports-book and casino bandwagon yet! Over the last few years the gaming and casino products on Betfair have taken the exchange out of the limelight in my opinion.
How smarkets will present API products isn’t clear either, guess we’ll just have to wait on that one…
The biggest win right now though, has to be the premium charge situation. If smarkets can increase liquidity and become a real contender, it’s likely there’s a big bunch of users just waiting to jump ship…
SMARKETS Sign Up Offering?
Other than the 2% commission, there’s a small sign up offer for anyone that’s interested. It seems to be the standard practice these days, the difference being with smarkets, like any other exchange, they’re not going to close you down or refuse the offer for betting at value.
At the time of writing you can get a £10 free bonus here. I’m sure I don’t have to explain to users how to turn it into a few quid, risk free (matched bet it basically). Freebie aside, the main allure of smarkets for me will be the API release in 2018.
Is SMARKETS Safe to Use?
I want to make this smarkets review as balanced as possible. So I think it’s only fair to address the possible security issues around the green exchange.
Not in the sense of losing your data, or account protection. On that level, smarkets is safe to use. I’m talking more about the fund protection policy you will be notified about when signing up to smarkets.
When you sign up to smarkets there is a notification to say they only provide a basic level of fund protection. This probably doesn’t bother many customers, although it’s worth mentioning. Traders typically hold larger amounts of money in their accounts, it wouldn’t be advisable to deposit more than you need to trade. Personally I’ve only ever have about £5-£10k in an account (excluding Cheltenham and the like). A chunk to lose, but not so much it’d keep me awake at night. Just be weary when depositing, there’s no point keeping a bank you cannot afford to lose!
So on the whole, my initial thoughts…
I’m optimistic about this move by smarkets. If they manage to pull it off on a larger scale will only come clear in time. Either way I’ll be following this pretty closely, particularly when the public API becomes available to all. Hopefully this smarkets review will alert a few into preparation as well.
When there is change, it’s usually followed by opportunity, even if it’s for a limited period of time. Early Betfair users (before me) often refer to the ‘golden days’ when you could ‘make money standing on your head’. I missed that boat, and doubt there will ever be opportunity quite like that again, although if it’s remotely close I’ll want to be there waiting. Failing to prepare is preparing to fail and all that.
At this point, my two main concerns would be liquidity and security of funds. The latter can be controlled by me to some degree, trading liquidity is the big one!
Would be interested to hear readers thoughts about smarkets in the discussion below…
Updated SMarkets Review 2019:
It’s been a while since this review started and unfortunately there are still no trading tools yet….
There is a new commission charge though (1%). Discussed thoroughly in this clip: