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Using a Betting Exchange
If you’ve read our introduction to betting exchanges, you’re ready for an introduction to the way that betting exchanges operate.
Decoding a betting exchange market
Betting exchanges have a unique format that may confuse punters accustomed to placing bets at fixed-odds bookmakers. Instead of simply listing a price for each selection, the betting exchange lists a set of ‘back’ odds and a set of ‘lay’ odds.
The ‘back’ odds offered at the betting exchange are essentially the prices offered by punters looking to lay a selection at an event. The cash figure listed under each price is the cumulative stake that has been layed by members of the betting exchange at the price indicated.
Lay bettors will generally try drive prices as low as possible to minimize risk and liability in the case the selection wins the event.
The ‘lay’ odds on a betting exchange are a reflection of the odds punters looking to back a selection would like to secure. The figure listed under each set of lay odds is the cumulative stake punters are prepared to wager at each price.
Punters backing selections at a betting exchange will tend to attempt to drive odds up in order to achieve better returns if a selection wins an event.
The mechanics of a betting exchange means that the three highest unmatched prices offered by the lay bettors will be listed in the ‘back’ section of the exchange, while the three lowest unmatched prices offered by back bettors will be listed on the ‘lay’ section of the exchange.
Backing a selection
Punters looking to back a selection at a betting exchange have two options:
Taking a price
The first is to use the betting exchange like a traditional fixed-odds bookmaker. This means that a punter can ‘take’ the best price offered on the ‘back’ section of the betting exchange. The selection is added to the betting slip and a stake can be entered. The bet will be processed instantly if the stake is less than or equal to the stake offered beneath the price selected.
Punters have the option to bet more than the stake offered in the exchange. If this option is taken any stake amount in excess of the stake offered on the exchange will be traded at the odds selected on the ‘lay’ section of the exchange.
Setting a price
Punters will not always be satisfied with a price offered on the ‘back’ section of a betting exchange, and are free to attempt to secure higher odds on a selection. To do this a punter can click on any part of the ‘back’ market, enter their stake and then input the desired odds.
The stake and the odds will then be listed on the ‘lay’ side of the betting exchange until such a time as they are accepted by a punter happy to lay the selection at the price on offer. Punters who set their own odds run the risk of not having their bets matched, particularly if they are too high to be featured in the exchange market.
Keep in mind that only prices lower or equal to those already displayed on the betting exchange will be displayed on the exchange. Higher prices can become visible if all stakes at lower odds are matched.
Laying a selection
Sports fans laying a selection in a sports event also have two options when placing their lay bets.
Taking a price
Punters willing to accept the odds on offer in the lay section of a betting exchange can complete a lay bet instantly by clicking on any of these odds. From this point on the process of placing a lay bet differs from placing a back bet.
Once odds have been selected the punter will be prompted to enter a stake on the betting slip. This stake is not the amount the punter wishes to bet, but is instead the amount the punter stands to win if the lay bet is successful. The betting slip will display the ‘liability’ of the lay punter – this is the amount the punter needs to bet to cover the possibility of the selection winning at the specified odds.
The higher the odds on offer in the lay section of an exchange, the greater the liability of the punter in the event the selection wins. A punter will therefore attempt to secure the lowest price on offer in the lay section of the exchange to limit liability.
In the event that a punter wishes to lay a stake greater than that on offer in an exchange, the betting exchange will automatically match part of the punter’s stake with what is on offer in the exchange, and then trade the remaining amount in the back section of the exchange at the specified odds.
Setting a price
Lay bettors who find themselves dissatisfied with the odds on offer in the lay betting market are free to set their own odds for a selection at a sports event. To do this a punter can click on the selection on the lay side of the betting exchange, which will add a lay bet on the selection to the betting slip.
The punter is now free to enter the maximum stake he or she is prepared to lay as well as the preferred odds for the lay bet. If the odds on offer are equal to or higher than those offered on the ‘back’ section of the betting exchange they will be displayed in this area until such a time as they are matched by a back bet.
While setting a price gives a lay bettor the opportunity to reduce the risk on a lay bet by attempting to secure lower odds than those already available in the market, this tactic may also result in the bet being unmatched as lower odds are unattractive to punters looking to place back bets.
A lay bet with odds too low to allow it to feature on the initial ‘back’ part of the betting market can become visible on the exchange if all back bets at higher odds are matched prior to the event in question.
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