CityOdds Ltd

CityOdds Ltd. (www.cityodds.com) is currently an internet based, UK licensed, revenue earning fixed-odds bookmaker specializing in financial markets. CityOdds Ltd delivers its products via a state-of-the artonline platform and allows traders to quickly place trades on various financial market outcomes over periods from a few minutes to over 1 year.

The technology has been developed, tested and is generating revenue inthe public domain. It is built to allow the construction of bespoke financial investments as well as derivatives and bets.

CityOdds Ltd is unique in that it captures the whole production process from specification, manufacture, delivery and support of the trading contracts.It is the most efficient way for customers to manufacture bespoke derivative instruments and bets and to have complete and instant liquidity in the secondary market. CityOdds owns the IP, servers, risk management software,front-end and know-how. CityOdds is a registered trademark.

Mike Chadney (42), the largest shareholder and CEO of CityOdds Ltd brings with him 18 years of financial markets and derivatives experience. Mike has worked on the investment banking side of the business as well as derivatives asset management throughout his career. Mike devised CityOdds Ltd and was responsible for the design of the pricing engine and the risk management software. Mike combines the technical expertise coupled with the business acumen to carry the business forward to a successful future.

Graeme Harker (46) (http://graemeharker.blogspot.com/), CTO designate and will be Director in charge of the IT expansion project. Graeme brings vast experience and cutting edge programming skills to CityOdds Ltd and will ensure the most advanced application to be developed with industry leading robustness.He will have overall responsibility for the system and hire resource as necessary to achieve company goals. Most recently Graeme was Lead Developer o fthe new Adobe Flex applications at Betfair.

CityOdds generates revenue and profit from mark-up on bet prices and  from entry fees to trading competitions and intends to generate profit from percentage fees on retail derivatives. Revenue may also be gained by licensing its technology and the data it creates and owns.

Financial Derivatives and Betting Market

The fixed-odds, spread betting and financial gambling industry is still quite young but the potential is huge. Options and futures are simply bets in another form. Listed options and futures on the global derivative exchanges focus on longer maturity bets such as three of six months. The turnover in these contracts canbe counted in the tens of billions of Dollars. Combined with the ability to deliver retail derivative products under a regulated wrapper, CityOdds has a distinct competitive advantage.

Thereare few if any means for bettors or investors to make short term, small sized(<£1,000), well priced bets or trades in global financial markets. CityOdds Ltd aims to fill this gap.

Thereare many reasons why very short-term options or bets are not produced. The main reasons are as follows;

1. Banksare reluctant to issue options of very short time periods, as they are virtually impossible to hedge accurately.

2. Banks finding these options difficult to hedge would charge large bid to offers preads to enable them to make a consistent return from writing such instruments.

3. Banks would be reluctant to write options in the smaller sizes likely to be demanded. Bespoke options require significant legal work and this has to be paid for in the cost of the option.

It is the inefficient settlement process, divergent legal frameworks, high cost of issuance and high costs of labour to administer such products that creates the opportunity for CityOdds. The ability to offer an efficient processing platform allows CityOdds to compete, not just in the high margin financial betting space, but also in the retail derivatives space.

The technology designed and implemented by CityOdds allows full straight through processing of financial bets and derivatives, an industry first.

CityOddsLtd currently operate within the existing marketplace for fixed odds financialbetting, binary betting and spread bets. The key competitors in this market are

www.igindex.co.uk

www.betonmarkets.co.uk

www.bluesq.com

www.binarybets.com

These all allow fixed odds bets on financial markets.

CityOdds has some key advantages compared with the existing fixed-oddsfinancial betting providers

a)   A more sophisticated product, customers can tailor their bet to exactly define their market view.

b)   Graphical and intuitive user interface

c)   More competitive pricing for comparable contracts

d)   The ability to close out open bets at attractive prices instantly

e)   A scalable and flexible odds engine allowing new and innovative productssuch as House Prices or Weather

f)     Interactivity such as Chat, news, links to Social Networking Sites

Retail Derivatives market

CityOdds intends to occupy this space and begin to deliver bespoke structured products and retail derivatives and to generate manufacturing profit margin.

The main issuers of Structured Products are;

1.   Barclays Capital

2.   Morgan Stanley

3.   Soc Gen

4.   Goldman Sachs

5.   HSBC

The large investment banks dominate the Retail Derivatives market and they price their products to allow significant margins to the issuing bank and distributor.

CityOdds has developed a fully automated method to deliver live pricing of derivatives and structured products coupled with full straight through processing. The investment banks have spent hundreds of millions of dollars tooffer parts of the straight through processing service but still have some wayto go.

CityOdds intends to scale the technology it has built to allow customers the ability to construct structured products, bespoke to their risk and reward tolerances and transact at a live market price with full straight through processing of the transaction.

Customers would purchase Fully Paid OTC Options, issued by CityOdds under a standard agreement. The agreement would be very similar to listed derivative instruments.

CityOdds’ key advantages in the retail derivatives space are;

a)   A platform to create bespoke investment products

b)   The ability to white label the platform to allow banks unable to investto create their own technology a platform to engage their customers

c)   Instant execution and straight through processing.

d)   A user friendly interface with managed content to assist the customer journey