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Step by step Betfair trading tutorial / Step 3

Posted by Pinterestgems | Posted in | Posted on 3:17 PM

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Step 3 - BACK Odds and LAY Odds

Back Odds

If you have bet before, using a traditional Bookmaker, you are probably used to using "Fractional Odds" when placing a bet. From now on, when using a Betting Exchange, you will be using European "Decimal Odds". Decimal odds are much easier to use and comparison between odds is quicker. The difference between the two types of odds presentation is quite straightforward. As an example, the Fractional Odds of 2/1 (two to one) converts to a Decimal Odd of 3.0 (three). Converting Fractional Odds to Decimal Odds is done by dividing the numerator by the denominator and adding 1, thus: 2 divided by 1 + 1 = 3.0 We add one because Decimal Odds include the original stake money when calculating returns.

However, before diving into the realms of betting, let me, for the uninitiated to gambling, explain a little about the principles of betting odds. Firstly, I will give a number of examples using Fractional Odds and then show the same examples using Decimal Odds. Don't forget, we are at present looking at BACKING examples; LAYING will be explained later. Odds are the mathematical figures, which state how winning bets will be settled. The Fractional Odds of 2/1 (2 to 1) (2 to 1 against) means that the Bookmaker will bet his 2 to your 1 that your selection does not win (you must win before the Bookmaker will give you a return).

If you bet £1 at the odds of 2/1, and the horse you have backed goes on to win, then you will receive £3 from your Bookmaker. e.g.

1. 2 x £1 = £2.00 (Your Profit) Plus Original Stake Money = £1.00 Total Return = £3.00 Further examples using £1 as your Original Stake Money:

2. Odds 11/8 11/8 x £1 = £1.37 (Your Profit) Plus Original Stake Money = £1.00 Total Return = £2.37 Betting Exchange Trader

3. Odds 4/5 (Odds On) (5 to 4 On) This simply means that the Bookmaker is betting his £4 to your £5. 4/5 x £1 = £0.80 (Your Profit) Plus Original Stake Money = £1.00 Total Return = £1.80

Now that the basics of Fractional Odds has been covered you must get used to using
Decimal Odds if you are going to use the Betting Exchanges for your new adventures.
The examples below show the equivalent Decimal Odds format of the examples shown
above:

1. Odds 3.0 (Fractional Odds 2/1) Return from Bookmaker 3.0 x £1 = £3.00 Less Original Stake Money = £1.00 Your Profit = £2.00

2. Odds 2.37 (Fractional Odds 11/8) Return from Bookmaker 2.37 x £1 = £2.37 Less Original Stake Money = £1.00 Your Profit = £1.37

3. Odds 1.80 (Fractional Odds 4/5) Return from Bookmaker 1.80 x £1 = £1.80 Less Original Stake Money = £1.00 Your Profit = £0.80

When BACKING you will be looking for , or asking for, as HIGH ODDS as possible.

LAY Odds

You have seen how BACKING odds work when you are placing a bet with a
Bookmaker. Now, all there is to understanding LAY odds, is to reverse the role. You
are now the Bookmaker and accepting bets from others. Look at the examples again, but this time put yourself in the Bookmakers seat.

When you look at the layout of the Betting Exchanges later in this manual; in our case
Betfair, you will see two sets of odds
one for those wishing to "BACK" A
CONTESTANT TO WIN and one for those wishing to "LAY" A CONTESTANT TO
LOSE.

You will select the LAY odds if you wish to act as Bookmaker. Put simply, it means
other users of Betfair will be placing bets with you, as if you are a Bookmaker. They
will be betting on the contestant to WIN, whereas you will be looking for the contestant
to LOSE.

When LAYING you will be looking for, or asking for, as LOW ODDS as possible.