Clearly, after last evening's Betfair crash, there's a lot of upset people out there having lost money. One only needs to read the various forums to appreciate that.
Equally, there will be some happy people around who found themselves in winning positions. They will be rubbing their hands with glee at receiving a windfall that they wouldn't have done if they'd traded out as normal. I hope they are happy that they have done so at the expense of the innocent losers.
Fortunately, I was OK in that I traded out before it completely shut down. However, as I alluded to yesterday, it is my belief that their systems started to go awry mid-afternoon - 2:55 to be precise. The markets were behaving bizarrely, jumping violently yet with little money coming in. Indeed, the prices seemed to be going through money that was sitting but not picking it up.
I feel for those traders who have lost out and I'm sure it is only a matter of time before I get hit. Still, I cannot understand Betfair's position on this.
Quite frankly, whenever there is a Betfair failure, ALL bets, in ALL markets - where those markets start or are in-play at anytime when the crash occurs - should be made void. This includes ALL bets matched in those markets BEFORE the crash occurred. That's the only way to ensure that no customer is out of pocket.
Yes, of course, those who were in a winning position would be pissed off at not getting their winnings, but at least they will not be losing money. What goes around comes around as they say and as long as Betfair failures continue being a fairly frequent occurrence, it's only a matter of time that those 'winners' will find it's their turn to have the bottoms bitten.
Someone, will always end up 'F*cked Up Beyond Believe'. Voiding ALL bets is the only way I can see to protect people.
Much of the money passing through Betfair's doors is traded. Betfair knows this. They actively encourage this. As a result, there will be many people who find themselves unable to close positions that they would normally be able to do. It is wholly unreasonable for Betfair to allow pre-crash bets stand.
Betfair have a duty of care to protect their customers cash. The way they do things at the moment, I don't think they can say that they do.