The emergence of betting exchanges has allowed bettors to trade prices for the first time. Gamblers can profit from movements in prices in addition to, or instead of, the actual event itself. This form of betting has attracted specialists and needs to be approached slightly differently to traditional betting. Here we explain the principals.
How to Trade
Betting exchanges make it possible, and relatively simple, to both back and lay (bet against) the same selection. This means bettors are able to take a profit before the action has even started. If a greyhound is on offer at 15.0 three minutes prior to the off, but a flood of backers push the price into 3.0 just before the boxes open, a trader could back at 15.0, and lay at 3.0 minutes later – either covering the initial stake (effectively getting a ‘free’ bet at 12) or laying more than the original stake to lock in a profit. Here is an example;
Box 1 – $10 x 15.0 = $150 Selection backed at 15.0
This will result in a loss of $10, or a return of $150. All simple so far.
The same selection, Box 1, is then ‘laid’ once the odds have dropped;
$10 x 3.0 = $10 Selection laid at 3.0. A ‘lay’ returns the total of the stake to the layer, the payout is their liability, in this case $30. So this will result in either a return of $10 or a loss of $30.
These two bets are on the same selection (Box 1 in this example). So the outcomes need to be looked at together;
Box 1 wins;
First bet returns $150
Second bet loses $30
Net result $120
Box 1 does not win;
First bet loses $10
Second bet wins $10
Net result – No win/loss
Locking in a profit
If the second bet was structured slightly differently, a profit could have been locked in regardless of the result. For example, a $20 stake would have risked a $60 payout – but bear in mind that liability will only need to be paid if the selection wins – and that will mean $150 from bet one. So this lay results in the returns being reduced to $90 from bet one, but a profit of $10 being guaranteed on ‘the field’ (A $10 loss on bet one, but $20 win on the lay). This could obviously be extended to the point at which all selections return roughly the same amount, i.e. the lay could be for $40, meaning a potential payout of $120. This would result in $30 returned if Box 1 won, but $40 if any other dog won.
Price fluctuations from 15.0 to 3.0 are going to be rare, but they illustrate the point. Any significant movement up or down, can be traded for profit. There will be times when punters know a price looks too big or a favourite is over rated and the odds will drift (this then becomes a ‘lay to back’ strategy, as opposed to the ‘back to lay’ illustrated above) – now that knowledge can be profitable. It is a great feeling to know a profit is guaranteed whatever happens, before the boxes have even opened.
Trading is not for the faint hearted, and there are many things to take into account, including exit strategies (to minimise losses when things go wrong) and most importantly, the liquidity in the markets being traded – those bets need to be matched. But for those willing to put in the effort trading has become extremely lucrative. Keep checking www.tipsta.co.au for more detailed trading ideas.