Trading crossover points on Betfair can maximise profits or cost you dearly. It’s important to get them right…
It happens in all betting exchange markets and influences a handful of factors so it’s important to understand. A crossover point is where the incremental values change within the betting market. For example, between the prices of 3.95, 4.0 and 4.1. The difference in tick values changes here from 0.05 per tick to 0.10.
Of course, but this isn’t just about prices…
Why Crossovers Matter So Much:
Price crossovers occur at several different points on the Betfair Exchange.
Take a look and you’ll see them at:
Now there’s always far less liquidity at the larger price points so it’s harder to trade there, but they offer a unique situation for two main reasons – psychology and value.
Failing to understand this can be particularly painful if you’re employing a directional scalping tactic.
The second reason influences the first a fair bit. Experienced Betfair traders know that these crossovers exist and they are unique points within the market, which, in turn, affects how they behave.
When you consider that 70% of money traded on the betting exchange markets is said to be market makers, betting bots and traders you can see why.
As a steaming price approaches a crossover point it’s common to see additional resistance. Lay bets are more willing to take the price contraction on. Once a crossover price has been broken, it’s also common to see it accelerate for a few ticks. This is largely caused by other traders in a hurry to exit their position.
Alternately, as a drifting price approaches a crossover point we regularly see additional market activity. Again, traders want to get on the lay side and or bail out of their trade once the price has moved through the price crossover. This is because of that second point I mentioned earlier – getting value.
There’s additional value to be had from a monetary perspective when trading a crossover point. It doesn’t require much explanation; being on the lay side of the book is more profitable. Take a look at that image above and you will see what I mean in the profit and loss column of the geeks toy trading software.
If the price moves 4 ticks from 6.0 to 6.8 we face a profit of £5.88, but if it goes against us for 4 ticks we only stand to lose £3.57.
How to Trade Crossovers on Betfair Exchange
So you’re probably thinking that’s easy then, only lay at crossover prices when Betfair trading. It’s a logical conclusion but there’s more to consider. The psychological element of traders using the exchange is massive. Sometimes, backing at a crossover is the right thing to do.
The more pressure and resistance that a crossover point has sustained often points toward a longer-term breakout once the crossover has been breached. Take a look at this image below, it’s not unusual to see a price snap like this once a point of significant resistance is penetrated.
Those who lay at 6.0 now need to exit their position for a loss. They become an opportunity to minimise risk if you opened a back position as the price broke through the crossover point.
Making the correct call will depend on each individual situation, how much money has been traded, general trends and the price-action on other runners. Take a look at the next market you trade and you’ll see what I mean…
When Trading Crossover Points on Betfair
Additionally, there are a couple of things to remember when trading crossovers on Betfair:
- Market participants
- Time to post
These points affect traders more than ordinary punters. As the timer ticks down to the start of an event, there is more genuine betting money flowing into the market. Therefore; these points of crossover are a little less important right near the start. Be careful that you don’t get caught in the trap of thinking that last-minute order flow is a balsy trader holding the crossover price – it probably isn’t. Recreational money, bookies hedging and large staters that can’t use a sportsbook all usually put their money down late.