How does betfair work?

How does Betfair's bet matching system work?

  • Also when the bet first becomes available what odds are used initially and how quickly does it find an equilibrium?

  • Answer:

    The markets are setup with tissue prices determined by an expert in the sport. This is similar to an old school bookie. Increasingly, tissue prices can be acquired via a feed. The liquidity on Betfair is such that market makers become active in the market as soon as the market is active. Market makers play a role similar to a stock exchange regulating prices. Arbitrageurs also play a role picking off prices. Less mature marketplaces with no market makers, arbitrageurs or liquidity struggle to achieve stability.

Stephen McCurry at Quora Visit the source

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