Using Betting Exchanges

July 7, 2011

I assume that by now you know a lot about betting exchanges, so I won’t talk about the basics here. If you do not know what a betting exchange is, please read my basic article about betting exchanges first.

Why We Need Betting Exchanges

Betting exchanges are incredibly useful for matched betting. However, I have to once again emphasize that we actaully need a betting exchange for matched betting (isn’t that obvious already?). The thing is that adroit matched bettors sometimes come to a conclusion that another bookie can be used instead of a betting exchange.

Although that’s true, it’s definitely more convenient to use a betting exchange. Why? Using another bookie is quite easy if there are only two possible outcomes – you simply have to back both selections with appropriate stakes. But what if there are more than two outcomes of the event? Are you going to place eight back bets for all horses in a horse race? I don’t think so. So we are limited to events with two (or maximally three) outcomes.

The biggest hassle with this approach, however, is that appropriate odds between two bookies can be found very rarely. And once they are found, it’s very likely that you won’t have any funds in the second bookie (it would take forever to find good odds between two particular bookies). So you will have to deposit money with the second bookie and withdraw it afterwards, That is going to take time and cost money in transfers and conversions.

Considering that matched betting opportunities can be easily found in betting exchanges, there is really no point of using a bookie instead. It’s so much easier to simply lay the same selection with your betting exchange. And it’s also more profitable as you have to do less money transfers.

Which Exchange is the Best

I’ve sometimes been asked why I encourage everyone to choose Betfair as their betting exchange as if there weren’t any alternatives.

Yet everyone agrees that Betfair is the best betting exchange with the most betting opportunities. Of course there are other nice exchanges too, but none of them is close to Betfair in terms of the amount of money wagered. That’s way Betfair can offer more markets, more in-play betting opportunities and the more volatile odds than any other exchange.

It’s also easier to get your bets matched in Betfair as there are more people willing to bet with you. As the market leader, Betfair also earns the most and can invest in its development more than any competitors can.

Nevertheless, I encourage you to sign up with other betting exchanges to get their free bets if you haven’t done that already. These free bets should be particularly easy to extract as the odds with different exchanges are usually the same.

Trading on Betfair

The high liquidity and volatility of Betfair markets have created immense opportunities for trading with the odds (a.k.a. scalping). Many traders have chosen Betfair as their trading platform and many punters have turned into traders. Betfair markets have often been compared to FOREX or stock exchange markets.

Did you know that there are thousands of professional Betfair traders that use special software to place their bets faster? And there are hundreds of people who make a living solely from Betfair trading…

That’s pretty impressive considering that Betfair is intended to be a place in which people place bets on sports events.

Don’t get too excited, though. The majority of traders lose just like gamblers. Trading skills are extremely hard to master and only few people can do that. It usually takes several years of hard work and determination before a trader can profit constantly. I tried to become a trader, but I lacked determination and soon gave up. Trading is not for everyone.

You may be wandering what commodities people can trade with on Betfair. In Betfair people buy and sell bets as the term betting exchange suggests.

Let me explain what I mean by buying and selling bets. It’s easier to understand this concept if we consider lay bets as the good we are trading with. A lay bet gives us the possibility to gain the amount of our stake if our selection loses, but we risk losing our liability. The ’price’ of a lay bet is it’s liability. Traders aim to buy cheap bets and sell them at higher prices, which equals backing at higher odds than laying.

Let me give you an example: we expect the odds for a selection to rise, so we place a £100 lay bet on a selection at the odds of 2.00. In a couple of minutes the odds increase to 2.20 and we decide to ‘sell’ our lay bet to other punters by placing a back bet of £90.91. This deal yields £8.64 regardless of the outcome of the event (commission is already deducted).

The cool thing about Betfair trading is that commission is only paid for net winnings (we paid only £0.45 in this example, although we placed bets with more than £190). Moreover, these bets could have been placed with only £100 in our Betfair account.

How I calculated that the back bet should be exactly £90.91? I didn’t do that myself; I used Betfair “what if” until I found the right amount.

But don’t get too excited about trading; in the example above we could have lost easily if the odds decreased instead of increasing. We have to  predict which way they’re going to move, which is extremely difficult.

If you decide to try trading, start with small bets (no more than £2) and practice until you are constantly successful. Then you can GRADUALLY increase the stakes. But remember – trading is not for everyone; if you’re after easy profits, stick to matched betting.

Options on Betfair

To get the most out of Betfair, I recommend adjusting its options a little.

By default Betfair doesn’t include commission when it displays profits and loses. That can be changed by clicking on More Options on the top of any betting market. I recommend having all the boxes in Profit and Loss Display checked.

Display “what if” figure automatically calculates what your potential profits and losses would be if all your unplaced bets were matched, which is particularly useful if you do any kind of trading in Betfair. ”What if” number is displayed before each selection in the betting market.

Although you can use Matched Betting Calculator do all the calculations for you, it’s more convenient to see these numbers in Betfair as well.

It’s also essential to check Refresh Screen Automatically at Odds options section, or you’ll have to hit refresh all the time. I also prefer having Flash odds when they change checked.

Another important option is Confirm bets before placing. It can be found on the right bottom of the market if you have any unplaced bets. I recommend having it checked; you are less likely to make mistakes with bet confirmation on.

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