1. Arbitrage Bot
Arb Bots operate in a few different ways but basically they seek to exploit price differences between exchanges to lock in guaranteed profits.
2. Lay Transactional Bot
A LTB will seek to lock in a profitable position mainly on the lay side of the book. This strategy can be particularly profitable in races with joint favourites where the prices fluctuate. LTB's roam the exchanges seeking lay books that are over 100%.
3. Back Transactional Bot
A BTB will seek to lock in a profitable position mainly on the back side of the book. BTB's seek back books with a make up of less than 100%.
Both LTB's and BTB's (in fact almost all bots) have functions to enable users to take up market positions and then lock in profits. The process of locking in profits is also referred to as "Greening up the book" - Betfair users will know why this is!
4. Transactional Bots
These Bots are really just different interfaces to speed up and simplify trading. Different bots have different features, but they usually employ fast-feed graphical displays of money traded and/or price fluctuations and lots of them use basic "Momentum Trading" type strategies. In lay terms this translates as following the money.
These Bots are particularly useful on in-running markets - did you ever wonder why active in-running markets on Betfair get "locked up"? Well now you know why!
Remember the basic rule - fastest bot wins.
5. Programmed Trading Bots
These Bots go and sit on exchanges waiting for programmed trades. The main advantage of these bots is that they are invisible to other exchange users. The Bots wait for the price to move before putting up their offer while other exchange users will post their offer direct to the exchange where it can be seen by everybody.
Imagine that you wanted to bet £10,000 at 3.0 about a horse. If you just stuck up that as an offer you would let everybody on the exchange know that you had £10,000 to back at that price.
What you bot does for you is it stakes the £10,000 in small bite sized pieces as the layers offer the horse at the price. There is no indication to other exchange users that there is £10,000 available to back at the price.
6. Betting System Bots (Back and Lay)
These Bots come with a subscription package to a racing form book. The form book supplies data and you program your bot to act on the data - for instance if the form site rates all its bets from 1-100 you might set your bot to back all bets advised >=80. Whatever.
Bots come in all shapes and sizes and at a range of prices suitable for every wallet.