What is Trading? | Betfair & Betting Exchanges

Tuesday, July 5th, 2011
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While many of those who enjoy a gamble at any sporting event will prefer to use traditional forms of betting, there have been various innovations in the past few years that can really enhance anyone’s enjoyment. Unfortunately, some of the terminology used has put potential punters off in the past, simply because they feel it’s all too confusing. However, many of these new developments do not require a degree in maths for you to understand or enjoy them.

Understanding Trading & Horseracing

The practise of trading allows anyone to opt for two markets in any given event and bet in such a way that they can guarantee a profit.

Therefore, if you’ve backed a horse to win a certain race before it begins, you can ‘lay’ that horse, i.e., bet that it will lose at a later stage and, providing you balance your stakes accordingly, you can be certain of profiting from the event.

Trading Step by Step

Trading can be likened to arbitrage betting but the difference is that the second bet comes when the race or event is ‘in play’.

Therefore, your initial bet will come before the event takes place. If we take horse racing as the first example, you can either back the horse to win or lay it to lose, before the race takes place. Once the race has started, you can monitor your horse’s progress as the race develops and take a view as to whether a trade would be useful.

If you have backed your horse to lose and it is way down the field then you may feel that there is no point in covering your bet but if it is in with a chance of winning, a trade could be worthwhile and will guarantee that you can’t lose.

Trading Maths

Using the following example, if the horse’s price is 2.5 to lose at the start of the race and you have placed a bet of £6.50, you would collect £6.50 if that horse fails to win.

IMPORTANT: The amount you stake when laying is the amount you will win if the horse looses, the odds are displaying your liability!

Example of lay bet:

10 GBP stake @ 4.0 odds gives you a liability of 30 GBP. This means if the horse looses you receive 10 GBP, if it wins you loose 30 GBP.

Example of back bet:

10 GBP stake @ 4.0 odds gives you a profit of 30 GBP. This means if the horse wins you receive 30 GBP profit and your stake back (10 GBP).

Now comes the trading part. If you place a 10 GBP back bet at 10.0, you win 90 GBP if the horse wins and loose 10 GBP if the horse looses. If the odds move and you can now lay this horse with 20 GBP at 5.0 (liability 80 GBP) then you can guarantee a profit. Here is a recap for those of you scratching your head (I know I was the first time).

Back bet, stake 10 to win 90.

Lay bet, stake 20 to win 80.

If the horse wins you win 90 GBP with the back bet but loose 80 GBP with the lay bet, guaranteed profit is 10 GBP. If the horse looses you loose the 10 GBP stake on the back bet but win 20 GBP on the lay bet, guaranteed profit 10 GBP.

Always remember these two rules:

BACK HIGH LAY LOW.

LAY LOW BACK HIGH.

If you follow them successfully, you will make money.

Odds that are different to the example above may guarantee much higher takings and if you bet on many events in the course of the day, there is some serious money to be made.

Once you have placed your initial bet with one bookmaker or exchange, you can follow the race market or use the betting in play service to make your counter bet (‘greening up’).

Additionally, you can also purchase software that monitors the race or event and tells you exactly when to gamble so overall, trading is a no risk bet that can be enjoyed by anyone who wants to guarantee their profits.

 

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