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What is trading?

What is trading on Betfair

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What is trading on Betfair?

(Or any other sports exchange)

Trading on Betfair is now seen as a great way of earning potential profit whilst keeping losses to a minimum.

Quite simply, it means to BACK at a high price, LAY at a low price.

And you can do it either way round.

Let's have a look at a LAY trade**:

STEP 1

Here, I have placed a LAY bet using a stake of £5 at a price of 3.0 on 'Puttore'. This means I will LOSE £10 if the horse wins.

Lay Trade

And you can see this refected in the P&L:

Lay Trade

STEP 2

Now I want to place a BACK bet at a higher price. So I place a bet and set the odds I want to 3.05 - which is one step (or one 'tick') higher on Betfair than 3.0. Now if the horse wins, you can see my profit will be £10.25

Lay Trade

As I have no other bets in the market then I basically have created a risk free bet. Meaning I will lose nothing if the horse loses. But will win £0.25 if the horse wins. See the profit figures against each runner here:

Lay Trade

 

STEP 3

But what if I want to make a profit no matter which horse wins?

Easy, I just need to 'green-up' or 'hedge' this bet. To caculate the stake required to green I just need to take the current profit and divide by the current LAY price. The price has now moved to 2.96 so this means I need to place a bet of £0.25/2.96 = £0.08. This is a below the minimum bet. If you don't know how to place a bet below the minimum see here. Or you can use a trading tool like Bet Angel Professional.

You can see here this will give me a liability smaller than my potential win.

Lay Trade

And now, I will profit no matter which horse wins this race:

Lay Trade

 

NOW YOU TRY

Why not open an account with Betfair now and have a go. Use small stakes to begin with. If you click the banner here you will get the current free money offer from Betfair which is £25 at the time of writing - so your first trades really can be risk free.

And for a trading tool to make it all easier you can't go far wrong with Bet Angel Professional. Click here for a half price trial.

Bet Angel

**For beginners it is usually a good idea to LAY first. The reason for this is that to close the trade simply means a back bet which your account will be able to handle. Placing a back bet first means the liability can exceed your account balance should the price suddenly shoot off in the wrong direction.