Betfair Exchange: An introduction to trading
The concept of trading is most commonly associated with the stock market. 'Buy low, sell high' being the key mantra there.
And it's no different on the Betfair Exchange, thanks to the ability to place back and 'lay' bets on the same event in-play, at different prices.
An ideal trade will allow you to create what is known as 'green book' - a bet where every outcome is a winner, whatever happens - so called because potential profit on the Exchange is illustrated in green.
A simple example would be as follows: you place a £10 bet on a football team at [4.00], so you will win £30 if that team wins and lose £10 if they don't win; happily for you, they go a goal up and instantly shorten into [2.00].
You then lay that same team at the shorter price for £20; this covers both your £10 stake and adds £10 of profit if the team you backed doesn't go on to win. So, you will win £10 whatever the result and can sit back and enjoy the match!
As well as locking in a profit, trading also allows you to minimise your losses when a match or race isn't going in your favour. Using a similar example to before, you place a £10 bet on a football team at [2.00], meaning you will win £10 if they win and lose £10 if they don't win. They are a goal down and not playing well, meaning the price has drifted to [3.00].
If you don't think they are looking likely to improve, you can lay them for £5, which will mean a £5 loss whatever the result - not a brilliant outcome, but preferable to losing your full stake.
For more on trading on the Betfair Exchange, check out our video