The Impact of Insider Trading on Forecasting in a Bookmakers' Horse Betting Market

This paper considers the impact of insider trading on forecasting in a betting market when prices are set by bookmakers. We base our analysis on Schnytzer, Lamers and Makropoulou (2008) who showed that inside trading in the 1997-1998 Australian racetrack betting market represents somewhere between 20 and 30 percent of all trading in this market. They show that the presence of insiders leads opening prices to deviate from true winning probabilities. Under these circumstances, forecasting of race outcomes should take into account an estimate of the extent of insider trading per horse. We show that the added value of a measure of insider trading for profitable betting is sufficient to reduce the losses when only prices are taken into account. Since the only variables taken into account in either Schnytzer, Lamers and Makropoulou (2008) or this paper are price data, this is tantamount to a demonstration that the market is weak-form efficient.

Optical tweezers with enhanced efficiency based on laser-structured substrates

We present an optical nanotrapping setup that exhibits enhanced efficiency, based on localized plasmonic fields around sharp metallic features. The substrates consist of laser-structured silicon wafers with quasi-ordered microspikes on the surface, coated with a thin silver layer. The resulting optical traps show orders of magnitude enhancement of the trapping force and the effective quality factor

Measuring the Extent of Inside Trading in Horse Betting Markets

This paper develops a theoretical model that examines the optimal price setting by on-course bookmakers in the racetrack betting market. The model suggests that opening prices should include a premium that compensates bookmakers for the risk that insiders will account for private information and exploit any mis-pricing made by the bookmakers. The model is an extension of the model developed by Makropoulou and Markellos (2007) for football betting to the racetrack betting market. Using an extensive dataset and performing Monte Carlo simulations to calculate the potential value of new information, we measure insider trading in the Australian racetrack betting market.