Michael Giberson (professor of economics and chairman of our scientific advisory board):
Actually, I would expect the change to improve liquidity, but the real surprise for Ed Murray is that other than his liquidity argument, I pretty much agree with him this time.
It is a better scheme than before, as the exchange will match traders’ bets more efficiently and offer price improvement when available.
As Betfair observes (and Murray notes) the downside is for traders who make a bet in error, and now find the more efficient market has matched the bet before it could be withdrawn. If this is a frequent problem for a trader, perhaps they need to exercise a little more care at the keyboard. But as the Befair announcement indicates — and this time Ed Murray is repeating the Betfair company line! — at least there is the possibility that the trader will be matched at a better price than he would have otherwise.