How to understand betting exchanges

First of all, if you’re used to conventional bookmakers, do not be intimidated by or afraid of betting exchanges. It is easy to get the hang of them.

The first thing you have to do is find the market you’re interested in – and on Betfair, that’s not always so intuitive. To find the Eurovision winner market, for example, first choose the “sports” tab and then use the left-hand menu to select: All Sports > Specials > General > Eurovision > Winner.

Now concentrate on the left-hand half of the page. This is where you can ‘back’ each country, much as you might do by placing a bet with a traditional bookmaker. The best price is offered in a blue square.

Let’s say you fancy Israel, and let’s say their best price happens to be 9.8 (which would be odds of 8.8/1, expressed as a fraction). To have that bet, you would click on the blue square, then on the far right-hand side place your stake in the box provided, any quantity up to the amount offered. £5 would see a £49 return should Israel win.

But you can also bet on Israel losing, or indeed any contestant losing. The technical term for this is to ‘lay’ Israel or the country in question, and your ability to ‘lay’ as a punter is what distinguishes betting exchanges from traditional bookmaking. The ‘lay’ market is to the right of the ‘back’ market. The best ‘lay’ price is offered in a pink square. Unlike ‘backing’ a contestant to win, the smaller the odds the better for a ‘lay’ bet.

For example, let’s say you could ‘lay’ Israel – put £5 on it not winning – at a price of 10.0. Your risk here is not £5, though, it’s £50. You would stand to gain £5 if Israel fails to win, and lose £50 if Israel does win.

In effect, you are playing the role of bookmaker and are accepting the bet of someone who wants to back Israel at 10.0 (9/1).

You don’t have to take prices offered by someone else. You can offer your own price. To do this, go through exactly the same steps as before, except once you have clicked the blue or pink square, and get the details come up on the far right-hand side, you not only add the amount you want to bet, but amend the price as well.

For example, if you want to place £5 ‘backing’ Israel to win at a better price than 9.8, click the blue square with that price, and on the far right-hand side amend the 9.8 in the bet details to 9.9.

You would see the 9.9 bet you have offered appearing on the ‘lay’ side within the exchange. This is because you are waiting for someone to accept your offer by themselves ‘laying’ Israel at that price.

When this happens, your bet is ‘matched’. Until that happens, it is ‘unmatched’. You can cancel ‘unmatched’ bets at any time. Your bet may also become partially ‘matched’. In other words, someone has chosen to take up part of the amount you have offered.

‘Unmatched’ bets are cancelled when the event begins on TV, except when you unclick this option in the box provided. This happens to most bets, so be aware that the market will shrink rapidly when the opening credits roll. Then it builds again, and you can bet live as the show progresses.