Betfair Trading: How Does It Work?

Posted by admin

October 26, 2009

I finished school about a year and a half ago. Over that time I do not know how many times I’ve been asked “What are you doing for a living?” Over 90% of the time the inquisitor does not fully understand my explanation, even ones that bet on sports. People that have knowledge of the stock market have an easier time grasping the concepts, but I’m finding that many of the people I know do not trade on an exchange.

I thought it might be easier to show how I trade on a betting exchange with some visuals. I will show a trade that I made on the Castello Masters Golf Tournament on Betfair below.

This may look complicated to some of you. Betfair enables a bettor to Back a bet (bet for this to happen) or Lay a bet (bet against this to happen). The picture above is showing a bet that I am about to place. I am backing Peter Hanson to win the tournament for $50. I have selected to back Hanson at odds of 23.0 as this is the highest available to back. If this bet comes in it pays me out $1100.

You can also see above that if I make this bet it will show my potential outcome on each golf winning. So here is how my book looks after placing the bet.

You can see the bet was successfully matched at 23.0 for $50.

During the third round of the tournament I decided I wanted to place a bet to Lay Peter Hanson that would guarantee me winning money. I could do this because the odds on Hanson had been lower because he now had a better chance of winning the tournament.

This picture is hard to make out so I will break it down.

I decided to bet to Lay (bet against) Hanson to win the tournament giving odds of 7.6 for $150. When you Lay a bet it means that I am giving someone else those odds for that amount. 7.6 were the highest odds availabe to Lay at the time. So if Hanson wins the tournament I would pay someone else for a bet of $150 at odds of 7.6, which would be $990. This is alright because of the bet I made earlier which would pay me $1100. I would still come out ahead $110.

By making this bet it would ensure me winning at least $100 in this market.