First time I heard about betting exchange, I thought it is something extra complicated to learn. After a couple of video tutorials and articles about betting exchanges, I remained confused because they explained something this simple on a very complicated way. Since then, a number of years have passed since I started using betting exchanges and I placed hundreds of thousands of EUR. We also wrote a number of guides on how to use them, which are the best strategies and reviews of their websites. We would now like to present you betting exchange guide that everyone can easily understand. A guide that will introduce you to betting exchanges in a less painful way.
What is a Betting Exchange and how it works?
Betting exchange is nothing more than a website where people bet against each other on sports event. Betting exchange is not participating in this betting and doesn't make profits from taking bets, but from small commissions they charge on winning bets. On betting exchanges people make odds, they are not determined by 1 person employed by betting exchange.
What are Back and Lay on betting exchanges?
It works like this: Lets take a match in this screenshot from 1 betting exchange as an example. Each outcome you can either choose to BACK – bet for France to win (blue), or LAY – bet against France to win (red). If you wish to BACK, then you click on blue field in a row where is France. Odds 1.55 means that someone else has already opened a type of "contract" where he, or more of them are ready to take up to 5766 EUR on price 1.55. If you are OK with this price, then you simply fill in the amount of how much you will bet and confirm your bet. In this point, you have MATCHED someone's price and closed a "contract" between 2 sides in the amount of your bet.
But, if you wish to place on price, lets say 1.6, then on betslip you simply change price to 1.6 and add the amount you want to bet. Once you confirm this bet, you have opened a new "contract" and your bet is in this time UNMATCHED. In other words, you have offered someone to bet against you at odds 1.6. Your bet will become valid in the moment someone else has matched your price of 1.6. If your "contract" isn't matched until the start of this event, your unmatched bet will be canceled and money reserved for this bet will be returned to your wallet.
The same stands if you wish to place your bet on LAY, meaning if you wish to bet against France to win. The price you can take straight away is 1.56 and you can bet up to 4204 EUR on this price. If you wish to lay a bet, it is normal that you want to lay the lowest possible price, this means that you will risk less money to win bigger amount.
You have probably noticed from this screenshot that back price and lay price are pretty close to each other. This is called good LIQUIDITY. Good liquidity means that there is a lot of people interested in betting on this event and want to make their prices competitive enough to be matched by you. Good liquidity manifests in 2 ways:
Odds are very close to 100% on both sides, back and lay
There is a solid amount of money available to place on these odds
When odds are close to 100% it means that you are getting the best possible price available to bet on the whole planet. Example of odds on 100%: Chance for coin to flip heads or tails is 50-50% and when you transfer this into odds it is odds 2-2 for either side to win. Now, bookmakers would offer you odds 1.85-1.85 to bet on this outcome and take 8% in total of what ever happens. In is not strange if you see odds 1.98-2 on betting exchange when it has a good liquidity on the same outcome.
Solid amount of money available to place your bet means that this match or market attracts such a high interest from other people that there is not only already a nice amount of matched bets, but also a good amount of money still to be matched at good odds. Bad liquidity means that there isn't high interest from other users of betting exchange in this event and that your bet either probably won't be matched or there isn't anything to be matched from other users.
If you read all this above 1 or 2 times more, it should already be much cleared how betting exchanges work and how simple it actually is. Another thing that will help you better understand how betting exchange works is to open an account on one of the betting changes we recommend in our reviews section and risk to place small amount bets just to get more cozy with using back and lay system.
Why is betting on betting exchanges called sports trading?
It is called sports trading simply because you trade prices of certain events with other people. Basically you buy someone else's odds and sell your odds. If you are selling your odds, then your odds can be bought or not bought by someone else, just as you can decide whether you want to buy someone's odds. The ones that want to back an event obviously want to have the highest possible price because their returns are then bigger. The ones that lay some price want to achieve the lowest possible price because that way they risk less money to win some amount back. This is called LIABILITY – the amount you risk in order to win certain amount when placing a lay bet. The higher lay price is, the higher is liability because in order to win 10 EUR from laying odds at price 10, you have to offer someone 90 EUR of your money.
Why do People Bet on Betting Exchanges?
It is a well know fact that major bookmakers follow betting exchanges and also betting exchanges sometimes follow what are price changes at major bookmakers. This is due to the fact that on betting exchanges, there is a lot of knowledgeable people that place their bets. Major advantages of trading at betting exchanges are:
Users of betting exchanges are not limited by bookmakers on which odds they will place a bet or which amount of money they will place, this is determined naturally by trade among users of betting exchanges
Betting Exchanges will never ban an account, limit it on any way or refuse to payout winnings for winning 2 much money. On the contrary, they reward users that place and win more bets by lowering their commission. This is due to the fact that these users contribute more to betting of other users and liquidity of events they trade.
Over the years traders developed various techniques and automated trading systems on which you can win even large amount of money. This means that you can make 100% guaranteed profit from trading a sport event even before this event has started. Using these techniques and tools makes betting exchange similar to stock exchange and it is available for anyone to use. More and more people make a living just from trading at betting exchanges. Read about some of the most common trading techniques and trading tools in our other articles.
The only price you have to pay to betting exchange is commission on winnings. It differs from betting exchange to betting exchange and ranges from 1.5 up to 5 percent depending on many variables. This is used only to pay their salaries and keep the site running. Betting exchanges all together actually make a fraction of the amount bookmakers make form their customers. If you wish to start using betting exchanges to either get the best price on planet for the sports event you want or to start trading odds in a professional way, we hope we made a good introduction. Be sure to read more of our articles that will help you make more money on sports betting and - the most important thing – have fun while doing it.