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Betting exchanges are confusing places for many. Just the thought of lay bets alone is enough to have some people running towards their local William Hill screaming. But back and lay betting, or trading as it is sometimes known, is a lot more complicated than it looks. Back and lay betting is a way of creating a position in a betting exchange market where you are guaranteed to win, no matter the outcome.
Think of it like the stock market, where the principle is to buy high and sell low. Or sell low and buy high. And the events that can change the odds are a lot more predictable. What happens next, is where you make your guaranteed profit. Just after half time, your team take a lead, and you notice their odds drop to 2. A simpler form of betting which involves both back and lay bets is matched betting. As the name suggests, matched betting is where you match back and lay bets.
As with any market, for a bet to go ahead, there needs to be a buyer and a seller , similar to eBay, Amazon and any other marketplace for that matter. In the betting industry, a buyer is someone looking to back a bet and a seller is someone looking to lay a bet.
You may have worked out that punters can place both back and lay bets at a betting exchange. This makes them incredibly versatile and popular betting platforms. Back betting or backing is the traditional and most common type of betting format. Placing a back bet on a horse simply means you are staking money on it to win. The bookmakers set the odds according to the likelihood of an outcome, taking into account the current market price and their margin, as I mentioned above.
However, Betfair still leads the way in terms of size and popularity. A lay bet is the opposite of a back bet. Placing a lay bet on a horse simply means you are staking money on it NOT to win. If the horse does win, you lose your bet. This may seem counterintuitive but it makes more sense if you just look at lay bets as the reverse of back bets. Back bet : Leicester City will win the Premier League this season. As you can see, back and lay bets are the direct opposite of each other. If Horse A wins, your back bet will win and your lay bet will lose.
Whatever betting market you look at, the odds are generally not the same between different bookmakers. This is especially the case when it comes to back and lay odds. This is clear to see in the example below:. Back odds at Coral for a tennis match:. Lay odds at Smarkets betting exchange for the same tennis match:. You can see the back odds are 3.
A discrepancy like this is quite typical and is sometimes bigger than this. Speaking of making a guaranteed profit, many punters use a betting strategy called matched betting that uses the back lay process mentioned above. The first step is to head to your favourite betting exchange. Next, find the market you want to bet on. I want to place my bet on the fourth Ashes Test. This is the important bit.
Betting exchanges differentiate between the two by using different colours. At Smarkets, green represents a back bet and blue represents a lay bet. Another way to distinguish between the two, the lay bets are always on the right-hand side.
Betfair and other exchanges use a different colour scheme but you can find out more about that in our betting exchange guide. A few years ago, as online gambling became more appealing and more bookies sprang up, so did the competition in the betting industry.
The only way for bookies to attract and keep new customers is to offer them incentives to keep them betting much like this Smarkets free bet. Bettors take advantage of these free bets and bonuses and make a guaranteed profit in the process. Back lay betting is the main concept behind matched betting and other low-risk trading strategies. It allows punters to make a guaranteed profit without putting their own money at risk.
This concept can be quite challenging for matched betting beginners so bookmark this page and come back to it, if necessary. For almost every matched betting offer you complete, you place two bets.