Easy Explainers: Your guide to the various ways of betting on the Betfair Exchange
Not sure about some of the terms used to describe betting on the Betfair Exchange? You've come to the right place...
In a nutshell
There are many different ways of using the Betfair Exchange so read out short glossary of all the different betting terms and methods of betting available to Betfair Exchange customers.
Watch our Betfair Exchange explainer video to learn what it's all about!
Arbing/matched betting
Arbing - aka 'matched betting' - means taking advantage of odds variation between odds providers to make a profit on an event regardless of its outcome. It involves simultaneously betting on every outcome of an event, while calculating that, whatever happens, the combined bets will guarantee you a profit. You can, for example, bet on a match with a fixed odds bookmaker and then lay on the Exchange at a shorter price.
Asian Handicaps
Asian handicap betting means betting on the outcome of a football match where the two teams are given a handicap - positive or negative - before the game starts. The handicap is a figure such as +0.5 or +1.0 or +1.5, or -0.5 or -1.0 or -1.5. This figure represents a goals head-start or a goals deficit awarded to the teams before kick-off.
An example of Asian Handicap betting:
If Manchester City are travelling to Burton Albion for a cup game, City will be a very short price to win the game - say, 1.2. A price like that means very few people will be interested in betting on a City win. Burton will be a very long price, and very few people will be interested in betting on a Burton win.
This is where the Asian Handicap comes in. On the Asian Handicap market, City will be given some sort of negative handicap, such as -2.5. This figure represents a goals handicap before the game - literally -2.5 goals. That's the handicap City start the game with. Burton, meanwhile, will be given a positive goals handicap, such as +2.5.
So you have to overcome the handicap to win your bet?
Exactly. So if you've bet on City -2.5, you need them to win by three goals or more to win your bet. If you've bet on Burton +2.5, you need them to avoid defeat by three goals or more to win your bet. You basically add the handicap to the actual scoreline that occurs in the game. That's one of the advantages of the Asian Handicap - it can add interest to a game where the outcome is considered a foregone conclusion. In our example, Manchester City -2.5 would be a bigger price than on City simply to win the match.
Back bet
Placing a back bet is the traditional form of gambling - you believe a result will happen and bet on it happening, at odds you want to take. On the Betfair Exchange, bettors placing these bets are called 'backers'. Those laying bets - betting on a result not to happen - are the 'layers'. Here's our guide to placing a back bet on the Exchange.
Back-to-lay
'Back-to-lay' is a common trading strategy, where you aim to take advantage of fluctuating prices on the Exchange to guarantee a profit regardless of the outcome, by backing a result and then laying it at a shorter price. This also works the other way around - a lay-to-back - where you aim to lay at a low price and back at a higher price. Backing and laying on the same market is also referred to as 'hedging'. For more on back-to-lay and lay-to-back, check out our How-To Guide.
Betfair Exchange
The Betfair Exchange allows customers to bet against each other rather than betting against a traditional bookmaker. By matching customers, rather than taking the risk itself, the Exchange gives bettors the option to 'lay' (betting on something not to happen).
Betfair Starting Price
The Betfair Starting Price (BSP) is the odds you get on a horse at the start of a race based on bets placed by backers and layers in the race market. Unlike traditional bookies' Starting Price, there is no margin for profit built into the Betfair Starting Price so it often gives you better odds.
Commission
Commission is the amount you are charged by Betfair on your net winnings on an Exchange market. Most customers pay a rate of 5%, but you can choose a different rate using the My Betfair Rewards loyalty programme. You do not pay commission on losing bets.
Drift
If we say a selection in an Exchange market is on the drift or drifting, it means the odds on the selection are getting longer. If a price is getting shorter quickly, it's 'steaming'.
Dutching
As a punter there may be occasions where you feel there are only two selections in a given market that you feel can win but you can't decide between them. By 'Dutching' your selections together you increase the chances of making a return on your bet with more eventualities are covered.
In its purest terms 'Dutching' is placing more than one bet on a market to achieve a positive result if a certain set of results fall your way.
The Betfair Exchange 'Dutching' tool allows you to choose multiple selections in the same market and give yourself more opportunities of emerging on the right side of the result. Because the Exchange uses decimal as opposed to fractional odds this provides greater flexibility for the customer owning to the extra price variations that you might not be able to get with traditional bookmakers
There may be occasions where you believe that the selections at the head of the market will not win or are too short a price, and in this case, if you fancy opposing these contenders, Betfair also gives you the option to 'Dutch' your selections into a lay bet.
Dutching is popular across most sports. Horse Racing, golf cricket and football, are just a number of sports that may suit the 'Dutching' approach to betting.
A patient and systematic approach is required for 'Dutching'. Events that suit this type of approach need to be identified and a long-range view should be taken.
'Green Book'
Achieving a Green Book means creating a position on a market where you eliminate any risk and put yourself in the green - as opposed to the red - on every possible outcome so that you guarantee yourself a profit.
In-play betting
In-play betting - or 'in-running betting' on racing - involves placing a bet on a particular outcome after the event has started. The Exchange offers in-play betting for several sports and specials. Here's our guide to making the most of in-running betting on horse racing.
Keep bet
By default, unmatched bets on the Exchange 'lapse' and are cancelled at the start of the event. But you can choose to "Keep" the bet once the market turns in-play if it is not matched prior to the off. This provides another opportunity to get your bet matched, although there is still no guarantee you will be matched as the price may never reach the level you have requested.
Lay betting
Traditional 'back' betting means putting your money on something to happen - a horse or a team or a player to win, for instance. 'Lay' betting means betting on something not to happen. For example, if you lay a football team to win your bet will be settled as a winner if the team loses or if the game ends in a draw - so two outcomes are playing in your favour. For more, see our how-to guide.
Liability
When you place a lay bet (betting for an outcome not to happen) your 'liability' is the amount you could lose in your worst-case scenario.
The bigger the sport and the event itself, the more interest there is in betting on it so a Premier League match or an IPL match would have huge liquidity (on the main markets at least) whereas a Swedish third division football match or a non-televised county cricket match would have a lot less.
The disadvantage of this reduced liquidity as a market-maker is that you might be able to lay some runners but not all. The advantage is that in the absence of more competitive odds, would-be backers may be prepared to take much worse odds than they would in a more liquid market. And that is obviously good news for you, the layer.
Liquidity
The liquidity is the amount of money available for you to bet (back/lay) at the relevant odds on a selection on the Exchange. You can bet all or part of that amount. If you bet more than the amount shown, the system will place the remaining stake as an 'unmatched bet' available for other bettors to take. The liquidity is displayed on the odds buttons of each selection.
Matched/unmatched bets
For an Exchange bet to be struck, it must be 'matched' with another customer - someone who has an opposing opinion. When submitting a bet offer, bets can be returned as unmatched, partially matched (where some of the bet is taken) or matched in full.
If you are taking the price shown on screen, you will be matched on the majority of occasions. Markets change continually though so don't assume you are matched - always look at your bet slip to confirm it. The monetary number shown in the blue and pink boxes shows how much is available to back/lay at that price, while the total money matched on the market is shown at the top of the page.
Until your bet offer is matched by someone else, you do not yet have a bet. If nobody matches your bet before the market closes then you get your money back. Unmatched bets stay in the market as offers until you decide to cancel them.
Scalping
Scalping' is the process of capitalising on minor, short-term price changes within an Exchange market to make small profits, with relatively low risk. It involves offering bets on both sides of an active market selection and hoping to be matched at slightly different prices.
How does it work?
Scalping is a short-term "in and out" trading strategy. The aim is to take a very small profit from minor price movements.
In order to successfully complete a scalp, you need to place two opposing bets against each-other, usually one or two price tick increments apart, in order to guarantee a profit on the selection.
This can be achieved by offering a back price that is slightly lower than market price, waiting for it to be matched, and then taking the slightly higher lay price.
Software can then be used to ensure an even return across all outcomes. Highly popular events with large betting volumes are most suited to scalping methods.
A Scalping example
Manchester City are trading at 2.01/1 to win a game.
You offer a back bet of £200 on Man City at 2.021/1, hoping for a touch of market movement, and a similar Lay offer of £200 at 2.001/1.
Once both offerings are matched, you will have a potential return of £400 if Man City don't win, but a return of £404 if they do win (excluding commission). So, Man City are a "green" selection for £4, without any liability.
Software can be used to "green up" your book, and spread that £4 potential profit evenly across the three selections in the market.
"Scalps" such as these can be done repeatedly in a liquid market in order to build your overall profit on the event.
Scalping software
Advanced trading software is normally always used by players who wish to scalp, due to the added ease of placing bets and removing risk from your book.
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 4.03/1, 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 2.01/1.
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.
'Traded at 1.011/100'/ 'Matched at 1000.0999/1'
1.011/100 - 1/100 in decimal terms - is the shortest price available on the Betfair Exchange. It's rare - and therefore notable - for a 1.01 chance not to win, so it will often make waves. You may read about a '1.011/100 gubbing' or 'gubbed at 1.011/100'. This means the horse/team/player didn't end up winning. At the other end of the scale, 1000.0999/1 (999/1) is the maximum price, and also newsworthy if a horse/team/player is matched before eventually winning.