Advantages of betting on exchanges

Betting exchanges such as Betfair have revolutionised betting due to the way they operate.

Exchanges offer - in the majority of cases - excellent prices at which to back a runner.

Further more if we don't like the odds on offer, we can always ask for better odds.

If we don't fancy the selection at all we can lay it.

In addition to these improved odds and the ability to bet against things happening, how would you like to turn a profit on a vast majority of horse races without studying form or making a judgement?

Impossible?

Well not now due to the world of betting exchanges.

Initially I used betting exchanges to arbitrage between bookmakers and other customers of the exchange guaranteeing money.

Traders

As the volume of matched bets on the exchanges grew a new sort of pattern of activity developed.

Rather than attempting to make a judgement on the underlying race or taking on risk as a bookmaker, shrewd punters started to trade the movements in the odds, enabling them to make a profit regardless of the result.

Traders, as they are called, look at the odds and make a judgement on the direction of the movement of the odds and make money by correctly predicting this movement.

The underlying event, the race, the runners, the course, the going, the form are all generally irrelevant.

Traders on sports markets operate in a similar way to city professionals working on conventional financial risk markets. On the stock and futures market there are huge amounts of people trading the movement in prices of publicly-traded companies, foreign exchange and commodities amongst other things.

Nobody tries to work out if, for example, Vodafone PLC is undervalued or overvalued; or whether the world demand is increasing for oil or not. They are just interested in the short-term price movement.

If the price is going to go up then they buy it, if it is going to fall they sell it.

They make money by placing buy and sell orders into the market to take advantage of these price movements. Traders on betting exchanges do exactly the same thing.

The original versions of these articles were written in 2005 by Peter Webb, founder of BetAngel, specialist trading software for Betfair. Visit BetAngel for a wide range of demonstration clips and for more information about their products.

BetAngel is a third-party Licensed Software Vendor of Betfair. BetAngel produce and support their own products. To make use of any of these software applications you must enter into an agreement with the individual vendors - separate from Betfair. Find off-the-shelf applications, historical data, results and more at the Betfair Solutions Directory.