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Tobias Fagerlund: providing an effective option for liability hedging

Spiffx-tobiasfagerlundTobias Fagerlund, CEO of innovative betting exchange SpiffX, explains how the firm can offer bookmakers more than just hedging facilities.

How powerful is your Spiffindex model for bookmakers looking to hedge liabilities?

With Spiffindex we have opened the doors for odds to be traded on a large market. It is a very useful tool for price hedging especially during in-play trading. It allows to reduce risk and get better margins. We have seen this work excellently in particular when there is a considerable volatility between odds based on Poisson calculation and the marketprice.

This model helps sportsbooks to use the market for pricing and strategies rather than using their own books for hedging.

It also helps traders achieve leverage in their betting. It provides an effective market place where professional traders can maximise profit using a wide range of instruments to speculate in odds movements and to price-hedge.

What other features do you offer that help bookmakers manage their books?

We know bookmakers like to keep their cards very close to their chest at times, especially when it comes to business strategy – after all if a competitor knows what you are doing they could well copy and reduce the competitive effectiveness.

We offer a Darkpool exchange that has hidden order depth which allows bookmakers to manage their books without exposing their risk strategies. It is a very competitive exchange with a monthly transaction fee based on matched amount, rather than a commission-based system.

In addition, bookmakers can use our API integration to facilitate automated trading and trade better and more efficiently.

SpiffX also offers intelligent order types like ‘fill and kill’, and ‘fill or kill’ that can be activated to assist the betting process. Players can also opt to share the spread between themselves by selecting our mid-price feature. Such features accelerate the processing of matching transactions and increase automated bets.

What is your B2B business model on the exchange? Do you have a different pricing approach?

We created a model that allows not only a person-to-person platform but also a bookmaker-to-bookmaker system. It is a dynamic system that can work for both players and bookmakers.

We consider this darkpool exchange to be a transaction exchange for odds rather than a betting exchange. This means that the darkpool exchange is not comparable with other exchanges or sportsbetting companies, since the fee charged is not based on winnings or deducted from the probability, but is a monthly transaction fee based on matched order. This guarantees the best net price for the player and the bookmaker and makes it easier to calculate hedging amounts and actual winnings.

How is your API being used by bookmakers? What is it capable of?

API trading makes it easy to create your own script, placing orders and canceling orders automatically based on the strategy adopted. This helps to execute real-time hedging in the back and lay exchange and to create advanced trading models in the market.

As a result, the API interface makes it possible to enhance the number of transaction and to hedge and balance risk. Spiffx use REST-api which is easy to integrate and offers a great performance.

API integration is by far the most efficient way for betting and will only grow in the future.

Are exchanges the perfect way for bookmakers to hedge?

At the end it all boils down to liquidity. If bookmakers find a good liquidity level in exchanges they will use them to hedge and then take further bets. An exchange which has a high liquidity level with tiny spreads and low cost is very efficient for bookmakers, particularly for those acting as a broker. They allow bookmakers to accept bets and hedge them right away with a small margin. It’s a win-win situation!

 

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