Premium Charges
Ouch. I started looking at BF charges to figure out exactly how BF transaction charges work as I figured that automation could easily trigger the 1000 per hour limit and then I happened to notice the section on Betfair's "premium charges". I saw the bit that goes on about 20% charges and thought wow thats a lot! Then I start seeing other figures bandied around like 40% and 60%. While at this stage it's just a far off "nice problem to have" it's still very offputting to know that if I succeed as I would like that this lies further down the line. I also need to think very carefully about only using Betfair where it provides significant advantage over other exchanges. Interesting how this fits in with arbing as one might rack up a profit at Betfair but lose elsewhere and then getting "taxed" on your profit element.
I wouldn't worry about it too much until you get close to it, or know that you will eventually hit it. You also shouldn't ever have to pay more than 40% because you can find ways to generate commission so you drop down to that category (and any extra commission you might have paid while in the 50 or 60% category is rebatable once you switch to 40% at a later date).
As you suggest, Betfair have essentially handicapped their growth by penalising the thought of success. Like you say, you should just weigh up the benefits and drawbacks of doing business with Betfair vs elsewhere. There's murmurings that the rates of PC may change in future (or the way it's calculated) so until you get close to £250k, who knows what the landscape will be like when you get there, so you need to factor that in to your decision too.
And with regards to transaction charges, they don't apply once you get to the high levels of PC. I'm surprised some of the other more experienced forum members haven't mentioned this. Either they don't know, or they're not paying the high levels. For me, losing the transaction limit has allowed me to increase my profits by multiples, which more than makes up for paying an extra 20% fee. So actually, reaching the high level of PC raises the ceiling of what you can earn.
As you suggest, Betfair have essentially handicapped their growth by penalising the thought of success. Like you say, you should just weigh up the benefits and drawbacks of doing business with Betfair vs elsewhere. There's murmurings that the rates of PC may change in future (or the way it's calculated) so until you get close to £250k, who knows what the landscape will be like when you get there, so you need to factor that in to your decision too.
And with regards to transaction charges, they don't apply once you get to the high levels of PC. I'm surprised some of the other more experienced forum members haven't mentioned this. Either they don't know, or they're not paying the high levels. For me, losing the transaction limit has allowed me to increase my profits by multiples, which more than makes up for paying an extra 20% fee. So actually, reaching the high level of PC raises the ceiling of what you can earn.
You're absolutely right of course Xitian. I'll worry about it when I am faced with it and by the time I get there I wont have any choice but to carry on as 60%(... or perhaps less) of something is still better than 100% of nothing! I'm coming at it from a very similar angle to yourself with an IT background so hopefully I can follow in your wake! (Excel then self developed API code, data capture, analysis, testing etc). Just out of interest did you pick up your initial basic API connection code from github and then extend it for your own requirements or completely self develop from scratch? I'm looking at doing this in C#.