How To Trade A Horse On A Betting Exchange

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How To Trade A Horse On A Betting Exchange

Betfair Trading is not complicated, anyone can do it, anyone can make a winning exchange trade.

If you had maths at junior school and paid even minimal attention you know that 1,2, and 3 are smaller numbers than 4,5 and 6. 

If you are completely new to how a betting exchange works please check the betting school article LayIng and Exchanges Advice.

Trade Successfully On A Betting Exchange

Lay a selection (@2.0) and then back it a bigger price (@3.00) OR Back a selection at a bigger price (@5.00) and then lay it a smaller price(@4.00)

SO

Back at 5.0 and lay at 4.0.

OR

Lay a horse at 2.0 and back it at 3.00.

Once you have done either of the above you have made a successful trade.

If you doubt that you can make a winning trade then just give it a test using a small amount.

Betfair Test

Lay a horse racing favourite on Betfair to £2, a £2 lay at 2.0 (even money) will cost you just £2 if that horse goes on to win.

But the idea is that we are going to trade that horse.

So if the horse goes to 2.02 then you can back it, as 2.02 is a bigger number then 2.0 (remember your maths class!) and you have made a successful trade.

How Can I Learn About Exchange Trading?

I am being slightly facetious due to all the “noise” surrounding trading.

You do need to spend time learning the nuances of trading, but there are 000,s of FREE resources, and it is an ongoing process.

Do not try to run before you can walk, take your time, practice, make mistakes but make those mistakes small. 

Your first port of call should probably be the Betfair, Matchbook, Smarkets, educational exchange guides.

I have listed them below, all do a good job in explaining backing, laying and trading.

Click any of the links below and start reading:

How To Make The Most Of The Exchange.

Back v Lay.

After spending some time grasping this information, you will be in a better place to understand

• Betting Exchanges.
• Backing and Laying.

Betting Exchange Risk

So you now know how to make a winning trade, I think you will agree it wasn’t hard?

The hard part is consistently repeating that exercise, so that all your trades make you money, and you never have a losing trade.

Probability and randomness over a bigger number of events will throw up losing trades.

I want readers to understand that these losing trades should not steer you off course, they should be treated as part and parcel of your trading.

Where possible you need to minimise the AMOUNTS you lose from these losing exchange trades, but know that not all trades are going to work out as you hoped.

I shall stick with the £2 @2.0 lay trades and if the price goes against you, and you are showing a loss, you can go back in at 1.9 and lay that price, keep on making the lays to recover those initial losses, and or enhance profits.

Do not automatically think that because a price initially went against you it will go against you again.

But always think about the risk, always protect your bank, by protecting your bank as a trader you will make more money.

Laying To A Fixed Liability (LFL)

Laying To A Fixed Liability (LFL)

An alternative Betfair Laying Strategy is explained below by long term OLBG member Davidg3907.

He utilises the Laying to a fixed liability (LFL) strategy which can be a method that some may find helpful, with this you know exactly how much you could lose.

Laying to a fixed liability (LFL) is the best way for anyone, particularly an inexperienced layer, to retain control of possible losses.

If you back a horse for £5 at BSP (Betfair Starting Price) or the current odds, on the exchanges and it loses, you lose your £5 stake, but your winnings would depend on the odds.

 If you choose to lay that horse for a £5 stake at BSP, the liability is out of your control.

You may expect it to be about 4/1 but if returned with a BSP of 9.00, your liability has become an unexpected £40.

To safeguard this, you can lay the horse to lose a fixed amount (e.g. £20).

All that you risk now is that £20, whether the horse is returned 3.00, 6.00, or 9.00.

Your potential profit is unknown, similar to backing a horse at SP. However, this time, the shorter the odds, the more you would win.

You could still accept the current odds when placing a lay bet, but now you must calculate the potential cost. This would be displayed before confirming the bet if in doubt.

Hedging Your Bets (Greening Up)

Lets say you decide to trade wonder horse Frankel.

You can always use different exchanges to take advantage of the best prices.

10.00 Back Bet at 11.0 on Matchbook / Profit =£100

10.00 Lay Bet at 8.0 on Betfair/ Risk =£70

Frankel Wins You Win £30 – Frankel Loses You Lose Nothing.

You now have a potential £30 profit if Frankel wins, with no risk, you cannot lose any money, you have a free bet on Frankel.

If Frankel loses you do not win anything, but do not lose anything either.

This is nirvana for bettors, older punters could only dream about this in their earlier betting lives.

However having made that successful trade you can profit whether Frankel wins or loses by hedging your bet, (greening up)

This is done by dividing the potential profit, which in this case is £30 by the current lay price of Frankel.

£30.00 divided by CURRENT lay price of 8.00 = £3.75

You can test this out or any hedging figures using the very helpful smarkets betting exchange calculator.

Alternatively many of the current trading software solutions do this automatically.

Choosing A Betting Exchange

OLBG have produced a best betting exchange guide with free bets for those of you looking for a new betting exchange account.

Many of the exchanges offer a free bet or bonus when you sign up with them. 

This choice of exchange is good for us as bettors and traders as it enables us to always take or ask for the best price. 

You need to remember that by always taking or asking for the best prices you who have a much better chance of making a long-term profit.

Open a betting exchange account of your choice, and just deposit a small amount, say £20. 

By depositing a small amount any mistakes will be affordable. 

To check out our comprehensive review of betting exchanges, click the review link below. 

Best Betting Exchange Article With Free Bet

Betfair Trading Example

Below is a recent small lay of a horse with the intention of "greening up" when the horse hit a bigger price.

The lay was made a couple of hours ahead of the off, but it shows the current profit and loss if I let the horse run.  

Live Trade Example

Betting Exchange Confidence

Everyone goes through a learning curve in whatever task they start learning.

Trading is no different, this curve is not a set time, some will pick up skills quicker than others.

Do not beat yourself up if you feel you are not learning fast enough, its far better to keep your funds safe than lose it all and have to start again.

Watch as many markets as possible, especially in the sport you expect to trade the most.

Learn the vagaries of your sport, is there something specific in how the market behaves?

• Do favourites have a good record?
• Do outsiders offer good value?
• Are front runners overbet?
• Are matches traded heavily?
• Does low liquidity indicate anything?
• Do TV pundits influence your sport?

Every time you watch a market you are training your brain to recognise trading opportunities, do not consider it wasted time.