Are Penny Lays on Betfair Risk Free?

In between discussing the finer points of Hanna-Barbera cartoons and boasting about the quadruple digit daily visits to his website (jealousy is not strong enough a word for it), Cassini made mention of 1p bets on the Betfair exchange. Cassini placed a £200 back offer on the exchange for an American football game. The bet was taken in four parts; the bulk in a £199.97 take and three takes of 1p each. 

Casinni was concerned that the 1p lays at odds of 1.45 suggested that there was no risk to the bot, which was probably the taker of these three penny bets. I am pretty sure (confirmed by data from Trader247) that although Betfair does not display sums less than 1p it is certainly records such amounts. Perform enough penny lays and eventually the sum of risk will add up to a penny and more. Not only that but you run the greater risk of having your account closed.

Now, in my book Programming for Betfair I do make mention of testing any bots you make, using the contents of my book, with penny bets so that you can ensure that your code works without risking too much money. However, I must point out that making too many sub £2 outward legs may get your account closed by Betfair. It is okay to green a book with a sub £2 homeward (second) leg of a bet (i.e. backing a previous lay or laying a previous back) but opening a position with a penny bet will be frowned upon. For the purposes of code testing I should really recommend a £2 back and an immediate £2 lay on a closed spread (e.g. odds of 2.90 & 2.88) for a small loss of a couple of pennies. That will keep Betfair happy and reduce your risk to the minimum.

See also

Programming for Betfair, a guide to creating applications for direct access to Betfair's exchange. A useful guide for those wishing to implement an algorithmic trading set up.

No previous programming experience is necessary to build the applications in the book. After completing the programming exercises the reader will have a powerful tool for gathering prices for database creation, strategy building and algorithmic trade placement using bots. Beginner programmers and experienced programmers have informed me that the book is easy to understand and that it has assisted them in creating algorithmic trading platforms.

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