Introduction to Trading / Exchange betting (Betfair)

[fairfranco]

So you want to make a profit from gambling, but you just can't get a good enough strike rate. It happens to most people and only the best punters manage to constantly make profits by backing a selection for a straight win. Sports by their very nature are prone to the unexpected happening. As an example Matt Stevens was 1/100 to win a match at the Crucible, a few hours later he is out of the tournament having seen Shaun Murphy pull back 6 frames to take the game. The same goes for ridiculously low priced horses and really any sport as they are usually down to human (or of course animal!) to do what's expected of them. they have bad day's, they make mistakes, get injuries, or simply come up against someone who wants to win that much more than them, the possibilities are endless but all of these things make punting for profit near on impossible.

Now you may have heard the word "trading" banded around here a bit recently and the idea that you can make a profit whatever the outcome may be.

You may have also heard these words linked with what's called Betting Exchanges such as Betfair.

While I will attempt to explain the basics of the Exchange and trading:

First off I'll give a quick low-down on the Betting Exchange - note that any examples are with Betfair as this is the biggest and most widely used Exchange and the on which I use myself.

The betting exchange is an alternative to the bookmaker and is a site which offers the customer the chance to offer and ask for their own prices for any market listed.

To explain, an exchange market does not offer odds it offers a market for people to exchange odds.

This is set by the options to either BACK or to Lay a market:

To BACK the outcome of an event is the same as doing so on a regular market, and in here you would either take the price available at the time on this market or you would request a higher one.

To Lay is exactly the opposite of this and essentially puts you in the position of the bookmaker. By laying the outcome of an event you are saying that it won't happen.

For example, if you Lay a horse taking a Lay price of 2/1 (3.0) you are risking £2 for every £1 you want to win. So by laying the horse for £5, If it were too win you would lose £10, while if it lost and any other horse won the race you would win £5.

The Important part to look at when making a Lay is the LIABILITY, this is what you are risking.

So the exchange works by someone either entering a price to BACK or a price to Lay and then someone else opposing that bet and taking the price that the other has posted. While this sounds a bit like making a bet on a football match down the pub with your mate and really isn't actually too different, once your on Betfair and looking at it you will find that this is becomes rather transparent once thousands of people are posting their prices on each market.

Better Prices

One of the great advantages of the betting exchange is that the odds available are often better than those on regular bookmakers; the main reason for this is because of the way the market works. On a regular bookmaker there is always a margin incorporated into the prices to ensure that they make a certain level of profit. This is calculated through what is called the overround (may be explained more later!).

In Play Betting

Another excellent feature of the Betting Exchange is the ability to be able to bet on virtually any event IN PLAY. From Football to Cricket, Tennis and even Horse racing can be bet on to the end. While a lot of bookmakers have In play events now they don't have nearly as many as the exchanges and to my knowledge don't have horse racing at all. The reason that the exchanges have such a large number of in play markets is really down to the fact that unlike bookmakers, no one needs to sit there and set the prices for you, as the market prices are set by the customer there is no reason why any market needn't be run live and In play.

There are two types of In Play markets on Betfair, those that are managed and those that are not. Football is a good example of a managed market, when a goal is scored, a player sent off or a penalty given, the market is suspended so that no one can bet on it for a period until the game is running again and all prices are then removed. The reason for this is to protect people with pending bets that may have been unable to remove a price or may have a delay on their viewing of the game.

Unmanaged markets include tennis, cricket, horse racing and many other sports and events (including television bets eg: Big brother) which don't suspend the markets unless something out of the ordinary happens. Therefore a wicket or a broken serve or a fall of a horse will mean instant big price changes and the chance if you’re fast to get a value bet.

----

Trading

Ok so you now understand that a betting exchange offers you the chance to offer your own odds and to Lay outcomes you don't expect to happen. You also know that the exchange is a good place to find better odds and to bet in play.

So now you want to know what trading is...

Well Betfair define trading in their help section as:

"One of the best and most unique things about Betfair. Trading is having more than one bet in a market; seeking to improve your position or lock in a profit on all possible outcomes."

The idea is to back something at a high price then when the price falls to Lay it enabling you to as it says above, give yourself a profit on all outcomes.

For Example:

You back Everton to beat Manchester united at 2.8 with £5, this would win you £9 if Everton win. The game starts and Everton go 1-0 up. The odds on Everton in play would then drop to say 1.8 allowing you to Lay Everton and make a profit either way. By using a calculation to work out the offset in this price you could Lay 1.8 for £7.78 ensuring yourself a £2.78 profit whatever happens.

BACK £5 @ 2.8 = £9 profit (with £5 liability)
Lay £7.78 @ 1.8 = £7.78 profit (with £6.22 liability)

Take away the liability of the back from the profit of the Lay or vice versa to get the profit.

Of course you don't need to level the profit for each outcome, the easiest way to see how much you will win or lose on a market is to select the 'Options' tab from a market, just above the 'Refresh' button. This will open up a box which gives you options of things you would like to see on the market:

Show profit and loss - This will show below the names of the selection how much you will win or lose if it wins. So if you back something at 2/1 with £5 it will show £10 (in green) on your selection and on each of the other selections it will show -£5.00 (in Red).

Include Settled bets - In a market such as a knockout tournament you will find teams/players that are out will be removed from the market, at this point any bets on them will be settled, ticking this box means that anything you had on those people will be included in the price being listed for the selections still available.

Display P&L net of commission - Ticking this option will amend the Profit and loss view to remove the commission that you would be charged by Betfair on any profits gained. This is the actual sum that you will win if your selection wins.

Display "what if" figure - This is a very useful option as it means that when you enter details into the 'Place Bets' pane you will see on the market screen what you could win. This is especially useful when you are looking to trade and so can adjust your figures depending on how you want to split your profits.

To make trading easier all of these boxes should be ticked.

It's not only In play events that can be traded on though, while some markets remain fairly static before an event as many will know, Horse Racing prices can vary greatly prior to a race and can provide a good opportunity to lock in a profit before the race start.

---

I feel like this has been a very long winded explanation of some simple things and writing it over a period of about 3 months hasn't helped! to give you an indication the bit about the snooker on at the start orignally read "today" as that was the day I started on this!

Anyway I think there's another here to bore and hopefully help some people, fire away with the questions, and those more knowledgeable feel free to point out my inaccuracies!

[Betfairalfie]

An excellent effort FF. A good starting point for novices

[betking]

Very well written and easy to understand, should be good for those who are new to Betfair

[veedub]

Quality post sir many thanks
_________________
Be sure of one thing somewhere a big clock is ticking get out and ride

Money Worries?
Work from home, earn ££££££
You don't even have to get out of bed
To find out more PM Vee "The Pimp" dub

[Betfairalfie]

I am happy to bump this back to the top again for the exchange newbies.

If you are new to exchanges, make sure you have the "verify bets" box ticked. Its on the BF Place Bets screen. Just like the OLBG confirm tip page it allows you to check the bet (and amount risked) before it is placed. It slows you up a little but will save the exchange novice from making silly mistakes or falling for "trap bets". Trust me - I speak from experience

[fairfranco]

lol, we've all done it alfie!

forgotten to change the price, entered the price in the stake field by mistake, layed instead of backed I think i've done them all!

[man o bong]

Thats brilliant help, even better than the tutorials on the site

Nice one
_________________
[b]My Blogs
Lay Blog Click here

[Stuart Wilson]

Just a quick question, when there is a price for backing but no price for laying (a blank pink square) can you put whatever Lay price you want in and someone may back that price?

[Dammo Qwirky]

yes stuart. u can put wot u want. its a question of striking a balance between putting up a price thatll get matched that is decent to u too. make doubly sure when the market is empty that u get odds and amount right away around.
_________________
Positions now available in OLBG Lottery syndicate. 28 lines in each draw dramatically increases chances of a jackpot. Please PM me for info.

[thatsa donkey]

Hmm,

I thought that if the Lay side of a market is empty, if you placed a Lay price in it would show as an odds and amount in the back side of the market. i.e. when you want to back outcome you can either take the price offered or request a higher price, but the higher price shows up in the Lay side of the market, if there is £10 available at 4.0 to back and I want odds of 4.5, I type that in and it goes into the Lay side of the market as an oportunity for some one to Lay at 4.5. also if I thought 4.0 was a good price but I wanted to place a back bet of £20, it would get £10 matched at 4.0 and the remaining £10 would appear in the Lay market as £10 available @4.0.

Hope that makes sense.

p.s if there are no amounts available in the Lay market. I would wonder why? Is it not a popular market, if so you may not get any money matched. If nobody is taking the available back prices and not even requesting higher prices (which would show up in the Lay market) you will probably find that there has been little or no money actually matched on that market and therefore no real interest in that event.

Best of Luck. but before you start laying do your homework.

Donkey.

[Dammo Qwirky]

yes if u wanna back summat, another person will have to Lay it and vv. when a market opens people will be trying to get a head start on others by offering bad value prices hoping to trade out at a later point. inevitably some get matched as inexperienced punters wade in.
_________________
Positions now available in OLBG Lottery syndicate. 28 lines in each draw dramatically increases chances of a jackpot. Please PM me for info.

[man o bong]

Lets chuck it back to the top, ow i've had my umpteenth read of it
_________________
[b]My Blogs
Lay Blog Click here