multitrade

Hi
excuse my ignorance but i cannot work out the 'benefit' of the multitrade option.

I understand how bundles work so i assume it is just a way of buying/selling parts of the bundle in an easy way (ie faster ) than altering (selling or buying) each part of the bundle one at a time?

Am i missing somehting though? is it a way to make more money by linking 2 or more items ie the risk is higher in that they all need to go the way I predict but the return is alot higher too if they all come off ( akin to multibets at the tab where you might try to predict the outcome of 6 soccer matches?

thanks

The average user will not see any benefit in the bundle stocks, simply because there is now at least 1 bot running that monitors bundles and trades on them.

How it works is like this: say there are 3 stocks that are bundled, and there are buy positions on the books of each stock for 0.40c. This means the total percentage chances of all stocks would be 120%, which is obviously illogical. Using a bundle buy, it is possible to buy 1 of each of the 3 stocks for $1, and then turn around and sell them back for .40c each, for a total of $1.20: a profit of 20c instantly.

Basically bundle stocks allow pricing inefficiencies in the market to be spotted and rectified with a profit for whoever does it. But as I said, there is at least 1 bot around that constantly monitors these bundles and you basically can't compete with it. Having said that, sometimes when a new bundle of stocks is created there's a window of a few hours before the bot's human owner adds the stocks to the bot, and there's an opportunity in there. I've made a few bucks in this scenario.

wow! I didn't know that there was a bot

though i figured there must be something or someone that keeps a very close eye to it since I have never seen a bundle on which I could make money from

I think it's just speculation that there's a bot doing this. I see cases where the sum of the sale prices of several mutually exclusive options exceeds $1 surprisingly often.

There used to be a bot, but I don't think its active any more - transaction fees killed it off.

I've seen many instances of bundled stocks reverting to < $1 total as recently as the US presidential state contracts. This is where I would buy or sell on a particular state to significantly change the price (by 10c or more) and because I'm lazy I'd just do it on only the republican or democrat side. The bot would correct the resultant pricing error within seconds.

Similarly the only time I've been able to make a manual bundle transaction myself is in the hours after the bundle was created (both from existing stocks being bundled, and brand new stocks).

Interesting - though with that lag it could be other people. the bot I noticed in the past was basically instantaneous, but I haven't observed it operating since transaction fees were imposed.

I don't see why the trading fees would matter, though, because they are quite small: 0.0035 per trade, and usually any pricing error will be at least 1c or more (due to standard MM granularity). You could easily program the bot to ignore pricing errors of 0.0050 or less anyway and therefore never make a loss. Trading fees are also capped at $5/month.

Remember though that to get that 1c, you need to do at least three trades (and sometimes five) to cover the entire bundle. And the hassle of having to check that seemed to discourage the lightening balancing bot we had in the past.

Ahh, good point.