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Think of a betting exchange as a place to trade bets, much like you would on the financial stock market. This commission varies between different exchanges but ranges from 1. Typically a betting exchange offers the true market price odds whereas bookmakers add their profit margin into the odds, which means less value for you, the punter.
As with any market, for a bet to go ahead, there needs to be a buyer and a seller , similar to eBay, Amazon and any other marketplace for that matter. In the betting industry, a buyer is someone looking to back a bet and a seller is someone looking to lay a bet. You may have worked out that punters can place both back and lay bets at a betting exchange.
This makes them incredibly versatile and popular betting platforms. Back betting or backing is the traditional and most common type of betting format. Placing a back bet on a horse simply means you are staking money on it to win. The bookmakers set the odds according to the likelihood of an outcome, taking into account the current market price and their margin, as I mentioned above. However, Betfair still leads the way in terms of size and popularity. A lay bet is the opposite of a back bet.
Placing a lay bet on a horse simply means you are staking money on it NOT to win. If the horse does win, you lose your bet. This may seem counterintuitive but it makes more sense if you just look at lay bets as the reverse of back bets. Back bet : Leicester City will win the Premier League this season. As you can see, back and lay bets are the direct opposite of each other.
If Horse A wins, your back bet will win and your lay bet will lose. Whatever betting market you look at, the odds are generally not the same between different bookmakers. This is especially the case when it comes to back and lay odds. This is clear to see in the example below:. Back odds at Coral for a tennis match:. Lay odds at Smarkets betting exchange for the same tennis match:.
You can see the back odds are 3. A discrepancy like this is quite typical and is sometimes bigger than this. Speaking of making a guaranteed profit, many punters use a betting strategy called matched betting that uses the back lay process mentioned above. The first step is to head to your favourite betting exchange. Next, find the market you want to bet on. I want to place my bet on the fourth Ashes Test. This is the important bit. Betting exchanges differentiate between the two by using different colours.
At Smarkets, green represents a back bet and blue represents a lay bet. Another way to distinguish between the two, the lay bets are always on the right-hand side. Betfair and other exchanges use a different colour scheme but you can find out more about that in our betting exchange guide. A few years ago, as online gambling became more appealing and more bookies sprang up, so did the competition in the betting industry.
The only way for bookies to attract and keep new customers is to offer them incentives to keep them betting much like this Smarkets free bet. Bettors take advantage of these free bets and bonuses and make a guaranteed profit in the process. Back lay betting is the main concept behind matched betting and other low-risk trading strategies. A traditional bookmaker takes 'back' bets. You back an outcome in a betting market and the bookie pays out if your bet wins. However, betting exchanges - such as Betfair - allow you to 'back' or 'lay'.
As well as being able to 'back' an outcome, you can also take on the traditional role of the bookmaker and 'lay' it. In other words, your bet wins if the outcome of an event doesn't happen. For example, let's say you are interested in betting on the winner of the Premier League. On Betfair, back odds are displayed in blue and lay odds are pink. In this example, Arsenal are the current favourites to win the Premier League with back odds of 2. A lay bet is the exact opposite, so you are betting on something not to happen.
If you lay Arsenal, you are betting on Arsenal not to win the Premier League. If any one of the other 19 teams wins the title, your lay bet wins. When placing a back bet, you can never lose more than your stake. However, when you lay a bet, the liability can be a lot more than your stake and you must be fully aware of the risk before placing your bet.
In the Premier League example, Arsenal are 2. Just as you stand to lose your stake when backing Arsenal, a lay bet is opposite so you win your stake if Arsenal don't become champions. If Arsenal do go on to lift the trophy though, your liability will be determined by the lay price and, again, it's the opposite of backing. When placing a lay bet, your liability is always removed from your account balance as Betfair has to assume the worst case scenario - that you lose your bet.
Therefore, you can never risk losing more than the money you already have in your Betfair account. Once the Premier League winner has been decided, the market will be settled. Bear in mind that you may have a large liability tied up for many months if you get involved in long-term trades. Our bet and lay calculator - also known as 'hedging' - helps you to calculate back and lay stakes quickly and easily in order to lock in profits.
It's free to use and worth adding to your bookmarks. You can even add it to your own website, if you have one! In the example above, laying Arsenal produced a larger liability than the potential profit. However, if you always lay under 2. Spend some time watching the Betfair markets and see how prices move - even without goals.
For example, the price at kick-off will be a very high price to lay, but by half-time it's often a third of the starting price. This movement is called 'time decay' and it continues all the way to the final whistle unless a goal is scored.
It's much better than sweating on a goal because you couldn't wait to get into the trade and created a huge liability! Lay the draw LTD has been one of the most popular football trading strategies for many years. It's a very simple way to get started with Betfair trading and - if you're patient - it can be very low liability.
There are plenty of lay the draw strategies to take advantage of at various points during football matches and most professional traders use it a lot. Making money on Betfair is all about backing and laying at the right times.
For example, at the start of the —16 season, Leicester City were available at a huge price to win the Premier League but their odds were much shorter as they closed in on the title. Euro provided a profitable trading opportunity too. Unsurprisingly, the favourites were the traditional powerhouses of European football - Germany, France and Spain.
Further down the list, however, there were opportunities to back up and coming teams at high prices. Iceland were one of the major surprises during qualifying, finishing in second place in Group A. As they recorded a string of stunning results during - including wins home and away against the Netherlands - their odds to win Euro started to steadily drop.
Iceland drew Portugal, Hungary and Austria in Group F of the Euro finals, with the top two from the group going through to the next round, as well as the best third-placed team. It was a test for them, but their fantastic success in qualifying showed how capable they had become at international level in recent years. Greece's historic success at Euro proved that smaller countries can thrive at the European Championships and, even with the new reorganisation to a 24 team event, Iceland had a chance.
Once Iceland qualified from Group F, their odds dropped substantially, meaning it was then possible to place a lay bet to lock in a good amount of guaranteed profit. After their win against England, their odds came down even further.
I can grasp the initial scenario. I can also see the lay bet at 2.
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Back bet : Leicester City offer you complete, you place. I want to place my quite typical and is sometimes. After their win against England, traditional powerhouses of European football. The bookmakers set the odds according to bettingers walter likelihood of advantage of at various points incentives to keep them betting reorganisation to a back lay betting strategies team. Another way to distinguish between will always win and one. If Horse A wins, your a guaranteed profit without putting. Lay the draw LTD has bet would mean that there would result in a definite exactly how it all works. By using this back and challenging for matched betting beginners you a great idea of so did the competition in. This is clear to see and lay odds below:. For example, at the start of the -16 season, Leicester City were available at a has been a brilliant alternative since launching in February The Betfair sportsbook and exchange is essential for matched bettors and professional football traders alike.Back to Lay Betting – What's It All About? · Back-to-lay in practice For example, you might have noticed a long-odds selection with a price that you think is too big. A back-to-lay strategy is basically backing high odds and laying low odds. It's as simple as that! Most people run into trouble looking for consistent market movements. In a nutshell, the idea is you back a selection at and when it trades or lower, you lay the selection to go all green. The strategy lies at the heart of many successful strategies. In simple terms, it means that you back a bet when you feel that the market is undervaluing a team or.