 Glossary
A
Antepost - Antepost markets are markets that are available up weeks or months before an event. Regularly available on Horseracing or Greyhound racing, Antepost markets differ from the event market in that a selection which is withdrawn and takes no part is settled as a loser. No Reduction Factors are made on Antepost markets
Arbitrage - This term is applied when an asset is purchased at one price and subsequently sold at a different price with the profit made being risk free. For example, you may back a horse with £10 at 6.0 and then immediately lay it at 5.5. You have made a potential profit of 0.5 x £10 = £5. If the horse does not win you have lost nothing.
Asian Handicap - Asian Handicap is a form of soccer betting which is very popular in Asia (hence the name). "Handicap" means that one team receives a “virtual head start”, effectively leading the game by a differing amount or amounts before the game starts.
Simply put, Asian Handicaps are designed to eliminate the possibility of a draw in a Soccer match, reducing the match to two possible outcomes.
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B
Backing - To back a particular result you are effectively saying that you believe the outcome WILL happen. For example, if you back Tim Henman to win Wimbledon then you are betting he will win. You will probably lose your money in this case so we would advise to LAY Tim Henman.
Book - The list of odds available in a market. See also, making a book.
Book arbitrage - The process of correcting the over or under round on a book. All odds should add up to 100%. If they are below 100% then you could back the entire book and make a risk free profit. The chance of, for example, any horse winning a race or a football match ending in a win or draw for either team is always going to be 100%. There is a 100% probability that this will happen. If you can back below 100% of implied probability, the book is less than 100%, then you will make a profit. On the opposing side if you lay above 100% then you are accepting a reward of over 100% for a liability of only 100% and you will also make a sure fire profit.
Bookmaker - Somebody who (generally) lays a list of odds (makes a book) for the betting market.
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C
Close position - The process of exiting a bet at the current price. If you have placed a bet in the market which has filled but the counter bet (which you have placed hoping to make a profit) is out of the money you may want to close your position.
Coming In - If the market has growing confidence in a particular selection then the price will shorten and get smaller. For example, if Roger Federer is to face Tim Henman in a Grand Slam final then the price WILL shorten and Federer's odds will become even smaller.
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D
Digital odds The modern way of pricing a betting market. In the past odds used to be fractional but now they are often quoted, especially on exchanges, in digital odds.
Drifting - This term refers to a price that is getting larger. For instance if Manchester United were 8/11 to beat Accrington Stanley in the FA Cup, the price might drift to 2/1. In effect, the market has less confidence in the selection.
Dutching - The process of equalising the bets placed on an event against their implied probability to ensure each selection is backed in proportion to their implied odds. Often people dutch in order to make a broad judgment on the race excluding horses that they 'know' stand little chance of winning. For example you would create a book to 75% and the difference between 75% and 100% a total of 25% is your profit. Of course therefore you need to ensure you can successfully 'Dutch' a book more than three out of four times on average. Often book arbitrage is often called dutching as well.
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E
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F
Fill or kill (orders) - If you use fill or kill your order will be placed into the market. If the order is not filled it is immediately withdrawn from the market (killed). Using fill or kill ensures that if you need to place a bet that relies on an offset the bet is only placed on condition that the original position is taken. For example, you place a bet at £1000 but only £500 is filled at the price you requested. If your offset bet was placed in the market without taking into account only half your initial bet was matched you could find yourself in a loss making position. When fill or kill is used only the portion of the original bet that was matched will be offset in the market.
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G
Green Book - A term used by traders when they have all possible results in a market returning them a profit. See 'Greening up'.
Greening up - The process of equalising the return on your bet across a series of runners in an event to ensure you win on that event regardless of the final outcome. Can be done discreetly or proportionally. If you had one selection in a two selection event which you had successfully traded for a profit of £100 you would only win that money if that selection went on to win the event. However you could 'green up' to transfer some of that value to all the other selections to ensure you won money whatever the outcome of the event.
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H
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I
Implied chance (probability) - Implied chance takes the odds offered by the market and converts them into a probability of winning which is said to be the implied chance of that selection. Some entity trading at digital odds of 2.04 has a 1/2.04 (or 49.02%) implied chance of happening.
In play - When an event is in-play it indicates that a sporting event has started. Markets can be traded whether they are in-play or not but the odds move more violently and erratically in play so the in-play mode is ensuring you are aware of the state of the market.
Indicator - A point of reference to highlight or inform of a position or prospective position or information in the market.
Intelligent stop loss - If you are using a stop loss system the idea is to exit your position if the market suddenly turns. If a horse, for example, suddenly breaks free and is running loose but returns to the stalls before the off. You could find yourself in a seriously bad position. Using a stop helps avoid this scenario by exiting your position the instant it goes against you. If your stop places the order at market price your stop may be missed in a fast moving market. If your stop is placed well outside the money your stop may get executed at a vastly unfavorable price. An intelligent stop is set outside the normal market price but offset enough to ensure a good fill.
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J
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K
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L
Latency - Latency is the term used to describe the delay between sending a request or signal and receiving confirmation or a return signal from the destination. When you request something by pressing a button on your TV remote the latency is the time it takes for the TV to receive your signal and respond to your request.
Latency can cause potential issues with automatic trading software as the software often relies on a message from a server. By the time it has acted on this message the situation may have changed. This is why fully automating tasks often fails and human intervention is needed at most times.
Lay - To lay a bet is to back something not to happen. For example to lay England to win their cricket match is to back them NOT to win. If you were to lay them, you would win your bet if they either lost or drew their match.
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M
Making a book - When you make a book you are offering odds to the betting market. In order to make the book correctly you need to lay at less than 100% implied probability or back below 100%.
Market (Betting market) - The process of multiple bettors and bookmakers offering prices for opposing parties to take up their offers. In the stock market people place open orders to buy and sell at different prices. In the betting markets, especially betting exchanges, the market is made in exactly the same way.
The market is where you place a bet on an event. Any given event, such as a soccer match, may have a number of different markets: for example, Match Odds, a Handicap and First Goalscorer markets. This is the place to view the odds and have a bet.
Match odds - Refers to the result of the underlying betting event. In Tennis, match odds represent the chance and odds of either Tennis player winning. In Football it would be either team winning or the match ending in a draw etc.
Matched bets - The orders you have placed into the market which have been matched (filled).
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N
Non-Runner - A non-runner is a selection that is withdrawn from an event. Ensure that you check the rules on each market so that you are aware of how non-runners are treated and any applicable Reduction Factor.
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O
One click betting - On the traditional betting screen for Betfair or similar betting exchanges you needed to enter the odds value you wanted to bet at and the amount you want to bet. With one click betting you preset the amount you wish to back or lay at and then just use your mouse to click on the odds you would like to bet at. The order will enter the betting market and be filled at the best available odds.
Open order - An order that has been entered into the market but has not yet been filled by the market. In order for an open order to be filled you will need to move it to the current market price. When an offset bet is placed the offset position is usually an open order.
Oppose - To place in opposition. If someone is willing to place a bet at a particular price, you can oppose this with a lay bet at that price.
Overound - The difference in the price of the book if it is over 100%. When a book / market is priced above 100% it is over round and if you buy the book / market you are effectively buying an event that can only end up with a 100% probability for more than 100% ensuring a loss. See being the bookmaker
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P
Price - The available odds available in the market. If a horse is 'priced' odds on. This is suggesting the digital odds on the horse is less than 2.00. Bookmakers 'price' a market.
Profit - The difference between the price at which you accepted liability and the price as which you took it up results in profit. If you back with a liability of £1000 but laid at a liability of only £990 you would have £10 profit.
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Q
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R
Reduction Factor - Should a horse be declared a non-runner, the Reduction Factor will be applied to the prices of all matched bets, for both backers and layers. See Rule 4 below.
This is to ensure that layers are not unfairly treated and exposed to large liabilities when the chances of other horses winning have improved. The Reduction Factors are designed to be fair to both backers and layers.
Rule 4 - In all horse races where a runner is withdrawn, or adjudged not to have started - and therefore been declared a Non-Runner by the starter - stakes on that selection will be refunded. (The exception to this being Ante Post bets)
Bets on the remaining runners in that race, taken at Early Prices or at Show Prices prior to withdrawal, will be subject to a deduction. This is normally based on Tattersalls Rule 4(c) (see below) and is dependent on the Non-Runner's price at the time it was withdrawn.
In reformed markets, the total deduction on the two or more horses - one in the original market and one in the reformed market - will be calculated on the prices applicable in the original market.
Bets on horses in subsequent markets that then have one or more withdrawn horses will have a deduction calculated on the prices applicable to that market at the time of the withdrawal.
In the event that there is insufficient time to form a new market on the race, S.P. bets may also be subject to a deduction based on Tattersalls Rule 4(c).
For bets at Early Prices, the application of Rule 4(c) will be determined by the Early Price of the withdrawn horse at the time your bet was placed regardless of the price at the time of withdrawal.
Tattersalls Rule 4(c)
Price at time of withdrawal Amount deducted from winnings
3/10 or shorter 75%
2/5 to 1/3 70%
8/15 to 4/9 65%
8/13 to 4/7 60%
4/5 to 4/6 55%
20/21 to 5/6 50%
Evens to 6/5 45%
5/4 to 6/4 40%
13/8 to 7/4 35%
15/8 to 9/4 30%
5/2 to 3/1 25%
10/3 to 4/1 20%
9/2 to 11/2 15%
6/1 to 9/1 10%
10/1 to 14/1 5%
over 14/1 No deduction
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S
Scalping - This term applies to the practice of trading in and out of a market on small price fluctuations. People who engage in this are called 'scalpers' and contribute greatly to the liquidity of a market.
Stake - The amount of money that you place into the market. If you placed an order for £30 into the market you have 'staked' £30.
Stewards' enquiry - In certain circumstances, the stewards of a racecourse will investigate an objection or suspected infringement of the Rules of Racing. This may involve the result of a race being amended, and therefore bets are not settled until the outcome of the enquiry is known.
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T
Trading - Taking advantage of the movement in price of odds to create a profit regardless of the underlying selection, event or result. Trading is reported to account for up to 50% of the activity on exchanges.
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U
Unmatched bets - Open orders you have in the market. Orders that you have placed but have not yet been matched (filled) by the market.
Underound / Overbroke - The difference in the price of the book if it is under 100%. When a book / market is priced under 100% it is under round and if you buy the book / market you are effectively buying an event that can only end up with a 100% probability for more less 100% to ensure a profit. See being the bookmaker. If the book is under 100% on the back side then is it profitable to back the entire book to make a risk free profit. If the book is over 100% on the lay side then it is profitable to lay the entire book to make a profit.
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V
Volume - This refers to the amount of money matched in a particular market. A popular race meeting for example, will have many people place bets and the volume will be high. The volume of money matched generally increases as the start of the event approaches.
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W
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X
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Y
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Z
Zebra - A black and white striped animal that is a member of the horse family. A zebra can travel at a top speed of fifty-five kilometres per hour, slower than a horse. However, it has much greater stamina. To our knowledge, there are no zebra markets on the exchanges.
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