Beginners guide to sports trading
Lets take a look at trading on Betfair and the opportunities that betting exchanges offer us as a user. Betting exchanges differ from bookmakers as they allow us to set the odds we want to take. There is also the ability to lay a selection as well as back one.
Another big difference with betting exchanges is they take a commission on your winnings. Standard bookmakers make a profit from losing customers this is not the case with betting exchanges.
What is lay betting?
Lay betting is an option that is offered by betting exchanges.
A lay bet is basically the opposite side of a back bet. The layer (person placing the lay bet) is acting like a bookmaker and accepting the bet from someone that wants to back a selection.
If we use the above image as an example of a lay bet. The lay side is coloured in pink.
There is a person/people wanting to back Sint Truiden at odds of 2.34.
We are willing to lay that bet for £100.
We accept the odds that are being offered on the lay side and risk £134 to win £100.
The person/people who backed that selection at 2.34 now stand to win £134 from a stake of £100.
Betfair take a 2% commission on whichever side wins.
Can you back and lay the same selection?
One of the great aspects of betting exchanges is the ability to back and lay the same selection.
My favourite method of trading is pre match trading which does exactly this.
Pre match trading is where we look to take advantage of odds movement before a match rather then backing or laying an outcome until the end of a game.
In this example we have put in a lay bet on Barcelona for £500 at 1.13. This means that we are risking £65 to win £500.
We then put in a back bet on Barcelona at 1.14 risking £500 to win £70.
This creates a situation where we have a risk free bet of £5.00 on Barcelona minus the 5% commission.
Pre match trading can be very low risk and as you gain confidence you can build up your stakes and profits. This is one of the best aspects of betting exchanges and when done correctly its a very low risk high reward strategy.
Odds move pre match for a variety of reasons be it new information in the market, form, money, weather.
Betting exchanges also allow us to trade positions in-play.
If you think a team is a value bet before the game but want to wait 10 minutes to see how they start you can do that with betting exchanges.
In this beginners guide to trading we have looked at how the betting exchanges function and how they are different from traditional bookmakers.
The betting exchanges offer a number of different ways to approach trading on sports. There are almost an endless amount of strategies and approaches you can take with betting exchanges.
To get started you will need a betting exchange account. I would recommend first opening a Betfair account and also either a Matchbook or Smarkets account.