Buy a little under fair. Sell a little over.
An animated, plain-English guide to how BETTOR's market-making desk works on prediction-market sports contracts, and the written limits its risk runs inside. Every number on this page is a made-up round example chosen to show the mechanics. None of them is a result, a forecast or a target.
Two prices, one spread.
A prediction-market sports contract pays $1.00 if something happens (say, Team A wins) and $0 if it does not. Its price, between 0¢ and 100¢, is the market's view of the chance.
A market maker rests two orders on the order book at the same time: a bid to buy a little below its fair price and an offer to sell a little above it. Traders who want to trade now (takers) hit the bid or lift the offer. When both sides fill, the market maker has bought low and sold high, and keeps the gap (the spread) minus fees.
The book. Other traders' bids (green) and offers (red) rest on the ladder. The dashed line is our fair price: 50¢.
- Position
- 0
- Bought
- —
- Sold
- —
- Fees
- —
- Round trip
- —
A sharp price, with the margin taken out.
The desk does not guess the fair price. It reads the odds of a sharp sportsbook, one whose prices move fast on informed money, and removes the bookmaker's built-in margin (the “vig”). What is left is a de-vigged fair price for each side.
Then a profit-first rule decides whether to quote at all: a bid is placed only if buying at that price beats fair value after fees, and an offer only if selling there does. If the price does not clear fees, or no reliable sharp price exists for that contract, the desk stands aside.
Sharp-book implied chances add up to more than 100%. Divide each by the total to remove the margin: 52 ÷ 104 = 50%, so the fair price is 50¢ a side.
When only one side fills, there are two exits.
Often a taker hits our bid and nobody lifts our offer before the game. The desk then holds inventory. It has two ways out, both inside written caps.
Bought 4¢ under fair. Any single game is a win or a loss; the 4¢ only shows up as an average over many games, and only if the fair price was right. Caps limit how much any one game can hold.
Exactly one of YES and NO pays $1.00 when the game settles. A pair bought for less than $1.00 therefore locks in the difference, here 4¢ a pair before fees, whichever team wins.
Small trades, many games.
A sports day has hundreds of games, and each one has contracts to quote. Positions are small and a sports contract settles when its game ends, usually the same day, so capital that backed one game is free again for the next. That is how turnover can add up to a multiple of the capital committed.
Turnover is not profit. It is the money that passes through the desk. What matters is the edge kept on each dollar of turnover after fees, and that can be negative.
400 games × $12,500 = $5,000,000 of turnover, 1.0× the $5,000,000 committed. Hypothetical arithmetic; no profit is implied.
The risk has written limits.
Every order is checked against written limits before it is placed. Limits include a per-order size cap and a daily loss stop. Controls marked in development are part of the desk’s next rule set.
- Per-market capA hard ceiling on what any one contract or game can hold, so a single result can only cost so much.
- Account capTotal open exposure across every market stays under an account-wide limit.
- Daily loss stopIf the day's losses reach the stop, the desk places no new orders for the rest of that day.
- Automatic governor · in developmentEach segment's realised edge is measured as fills settle. A segment whose realised edge turns negative is paused automatically.
- Venue rulesEvery order follows the venue’s own rules on fees, order types and settlement.
Each bar is a segment's realised edge per contract. When one stays below zero, the governor pauses that segment and the rest keep quoting.
The second desk takes, not makes.
Alongside the market makers runs a second, smaller desk: the Directional desk. It is signal-driven. When external market signals point to a price that looks wrong, it sends taker orders: it crosses the spread and pays the taker fee, but only within a set limit of the signal's price. It trades in the same account as the market-making desk, inside the same account-wide limits, and its results are reported separately.
Four venues. Two connected, two on the way.
- PolymarketConnected
- KalshiConnected
- NovigPending
- Fanatics MarketsPending
Every number on this page is an illustrative example chosen to show the mechanics, not a result.
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