A betting exchange is a market where people can back their own opinion against other peoples. It is an open market were a bettor can act as either a punter (backer) or a bookmaker (layer). betfair was the original exchange and is now the biggest and best, offering a vast array of markets on a huge variety of sporting events every day.
Events from all around the world are offered and all tastes are catered for. But betfair isn't solely used for sporting events; TV specials such as Britains Got Talent, X Factor and Big Brother can create huge interest. Even highly specialised bets such as the next Archbishop of Canterbury, Mayor of London, Chief of Police, Turner Prize winner are also available at certain times!
For too long in this country, punters were in the stranglehold of the big bookmakers. The only odds on offer were theirs. Not every event was covered and people were - and still are! - limited on the amount they could bet on an event. Successful bettors throughout time have had their accounts closed. It is a proven fact that traditional Bookmakers do not like winning bettors!
With the introduction of betting exchanges, the bettor now has much more control over their betting activity. There are two major reasons for the success of exchanges:
1. You're backing your own opinion against other bettors, rather than against the bookmakers. This is an important point to note - the odds on betfair are set by market forces.
This gives, at times, some major discrepancies between the 'normal' betting market and the exchange. As an example, at the 2011 Ascot betfair weekend, you could get a better price at betfair on 164 out of the 185 races.
2. You're given the opportunity to back against an event (know as 'laying') - in other words, acting as the bookmaker by setting odds in the hope of attracting bets from other punters.
There is an element of status betting when winning off fellow bettors, a feeling of satisfaction when you lay a favourite to lose and it does. It is sometimes easier to be convinced of what will not happen than what will happen. The freedom offered by an exchange to back your own opinion either way is a massive draw to bettors.
On the betting exchange, you may have an opinion on the outcome of a sporting event and therefore would be confident to back that opinion. However, on the flip side, you may not be confident of a definite outcome, but may feel that something will not happen and so bet against - or lay - an outcome. This is where the option of backing and laying comes in to play. Do you want to be a bettor (backer) or a bookmaker (layer)? Can you be sure of the outcome or are you rather more certain that something will not happen? Whichever way you decide to play, then the exchanges are where you will profit or lose from your opinions.
To back a selection is to place a bet for something to happen. In this respect, the betting exchange acts like a traditional bookmaker - you decide on your predicted outcome and place your bet.
Where the exchange differs is that there's a limited amount of money available for each bet.
In the example to the right, you may decide to bet on England to win. At this point in the betting, you can see (in the blue Back column) that there's only £4 available at the best odds of 2.86 (betfair uses decimal odds) which means that for every 1 unit you bet, you'll receive 2.86 in return (profit of 1.86).
If you were looking to put down £100 on this bet, only the first £4 would be matched at these odds, the other £96 would be matched at the next highest odds on offer (2.84) where there is £1,178 available.
In other words, your bet is matched as two separate bets - 1 of £4 @ 2.86 and 1 of £96 @ 2.84. Bear in mind that on the exchange you're always betting against other punters, each of whom has decided how much they're willing to stake on an outcome.
Because of this, betfair markets fluctuate constantly and prices can move at any time. Also, if you change your price from what is currently available, you take the risk of not having your bet matched. NB If the betfair price improves whilst you are in the process of placing your bet, you will be matched at the best available price - higher for backing, lower for laying.
To lay a bet is to back something not to happen. For example, to lay England to win their match is to back them NOT to win. If you were to lay them, you would win your bet if they either lost or drew their match.
With betfair you can not only lay any selection, but also choose the price you want to take, and how much you are prepared to risk. The shorter the price you wish to lay, the less money you have to risk compared to your potential reward.
For example, if you decided in the match opposite that you wished to Lay (pink column) South Africa to win (ie bet that they will lose), the best odds available are currently 6.2. To attract bets, you would make a sum of money available at 6.4. This may sound safe, but for every £5 you want to win, you have to risk £32. Although the bet will only show on the Back column as £5 available at 6.2, your total liability (ie £32) is taken from your balance as this is your worst case scenario.
If South Africa end up winning, you have to pay £32 to the winning customer(s). If South Africa lose, you win £5 (less commission). Remember, when laying a bet, you can only win the amount matched.
The nature of Laying may seem like a fairly high risk and low reward strategy, but that may be exactly what appeals to you as a punter.
There are all sorts of reasons why people lay bets. Some people find it easier to pick a horse that won't win, than one that will win. Some people lay a bet because they think the price is too short. Again, it's all about opinions - yours against other punters.
Laying need not be scary - you are in full control of how much you wish to risk and how much you could win. In a lay bet, you always stand to win the stake of the opposing bet (e.g.£5 in the example above). Because of the way bets are matched, you could be betting against one person or several.
For a bet to be struck, it must be matched with another customer (Back or Lay). When placing a bet, be aware that bets can be returned as unmatched, partially matched or matched in full. Until your bet offer is matched by someone else, you do not yet have a bet (unmatched). If nobody matches your bet before the market closes or is turned In-Play, then your bet will 'lapse' and you will get your money back.
Your bet could be matched a split-second after the unmatched bet slip has been shown. Unmatched bets stay in the market as offers until you decide to cancel them. Be warned that if you act hastily and try to get a bet matched repeatedly as the market shortens, you could end up getting multiple bets matched if the prices then lengthen.
As prices and amount of money available constantly change on an exchange, particularly just before a race or when a market is In-Play, you may have to adjust your odds or stake to get matched. Note that the odds and stake value can still be changed - you are still able to change or cancel a bet at any time until the bet is matched.
Before any event, there are numerous markets available on betfair. These markets are open to fluctuate throughout the day, up to the start of the event. After it has started, markets switch to IN PLAY (see our guide to in-play betting.)
Football - match result, first scorer, correct score, half time result, half time/full time result, total corners, total goals, over/under goals totals.
Horse racing - odds to back or lay each horse to win the race, odds for horses to be placed in the frame.
TV Specials - Big Brother - Winner, top male, top female, next eviction.
Obviously there are many markets for many sports. Whatever your betting tastes/needs, then betting exchanges cater for you. You need to be patient, thorough and meticulous, but betfair's exchange gives you the chance to take advantage of other people's misjudgements.
betfair revolutionised the betting market when they introduced their exchange. As the longest established, most popular betting exchange in the world, with a multitude of markets to Bet or Lay, you need look no further. Sign up now at betfair and claim £30 in FREE bets.