Understanding the terminology used in betting exchanges is crucial for anyone looking to engage in sports trading effectively. Below is a comprehensive betting exchange glossary of essential terms, organized by topic.
Betting Actions
Back Bet: A traditional bet where you wager on a specific outcome to occur. For example, betting on a team to win a match.
Lay Bet: A bet against a specific outcome occurring. Essentially, you’re acting as the bookmaker, betting that a particular result will not happen.
Back-to-Lay: A trading strategy where you back a selection at higher odds and then lay it at lower odds to secure a profit, regardless of the event’s outcome.
Lay-to-Back: The reverse of back-to-lay; you lay a selection at lower odds and back it at higher odds later to guarantee a profit.
Matched Bet: A bet that has been accepted and paired with an opposing bet in the market at a specific price.
Unmatched Bet: A bet that remains unaccepted in the market at the offered price and awaits matching by another user.
Dutching: Placing multiple back bets on different outcomes in the same event to increase the chances of making a profit. This strategy is useful when you believe several selections have a good chance of winning.
Bookmaking: Acting as a bookmaker by placing multiple lay bets on different outcomes in the same event, aiming to make a profit by balancing the book so that you profit regardless of the event’s outcome.
Betting Exchange Concepts
Betfair Exchange: A platform that allows customers to bet against each other rather than against a traditional bookmaker. This peer-to-peer betting system offers more flexibility and often better odds.
Event: A scheduled match or competition, such as a football game or horse race, on which bets can be placed.
Market: A platform within the betting exchange where users can bet on specific outcomes of an event, like predicting the winner or the correct score.
Selection: A possible outcome within a market. For example, in a football match’s “Match Odds” market, the selections might be “Home Win,” “Draw,” and “Away Win.”
Commission: The fee charged by a betting exchange on your net winnings in a market. For example, Betfair charges a standard rate of 5%, but this can vary based on user activity and promotions.
Liquidity: The amount of money available in a market for matching bets. High liquidity means you can place larger bets without significantly affecting the odds.
Matched Amount: Is the total amount of money that was already matched in an event, market or selection.
Betfair Starting Price (BSP): The odds determined at the start of an event based on the bets placed by backers and layers in the market. Unlike traditional bookmakers, the BSP doesn’t include a profit margin, often resulting in better odds.
Book Percentage of a Selection: Represents the selection’s implied probability, calculated as 100% divided by its price. For instance, a selection priced at 2.0 has a book percentage of 50%.
Book Percentage of the Market: The sum of all selections’ book percentages in a market. A perfectly priced market totals 100%.
Odds and Pricing
Best Back Price: The highest odds currently available for a selection that a user can back.
Best Lay Price: The lowest odds currently available for a selection that a user can lay.
Current Price: The best available price to back or lay a selection at the present moment.
Reverse Price: For back bets, this is the best lay price, and for lay bets, it’s the best back price, indicating the price at which a bet would be offered to the market.
Ticks: The minimum increment by which odds can move on a betting exchange. For example, odds might move from 2.0 to 2.02, with each increment representing one tick.
Drift: When the odds on a selection lengthen, indicating that it is becoming less favored by the market.
Steaming: When the odds on a selection shorten quickly, indicating increased market confidence in that outcome.
Betting Exchange Glossary - Betting Strategies
Hedging: Placing bets on different outcomes to secure a profit regardless of the event’s result. This is often done by backing and laying the same selection at different odds. Also called “greening”, when hedging is not done for a small loss.
Trading: The act of buying (backing) and selling (laying) bets on a betting exchange to profit from movements in the odds, similar to financial trading.
Scalping: Aiming to profit from small price movements by placing frequent back and lay bets at minimal odds differences. The goal is to secure quick, low-risk profits rather than holding positions for long periods.
Arbing (Arbitrage Betting): Taking advantage of differing odds offered by various bookmakers to guarantee a profit, regardless of the event’s outcome. This involves placing bets on all possible outcomes with different bookmakers.
Cash Out: A feature allowing bettors to settle a bet before the event concludes, securing a profit or minimizing a loss. Similar to hedging, but with only one push of the button.
Betting Exchange Glossary - Risk Management
Open Position: A situation where there is an imbalance between matched back and lay bets on a selection, indicating an active trade.
Closed Position: When matched back and lay bets on a selection are balanced, indicating no active trade.
Net Stake: The difference between the amounts staked on back bets and lay bets for a selection, reflecting the size of an open position.
Liability: The amount of money you stand to lose if a lay bet loses. It’s essential to manage your liability to ensure sustainable betting practices.
Weight of Money: The comparison between the amount of money waiting to back a selection and the amount waiting to lay it. A higher weight of money on one side can indicate potential movements in odds.
Volume: The total amount of money matched in a market, reflecting its liquidity and popularity.
Overround: The bookmaker’s margin built into the odds, ensuring a profit regardless of the event outcome.
Book Over-round/Under-round: Indicates the extent to which the total book percentage deviates from 100%. An over-round exceeds 100%, while an under-round is below 100%, reflecting the market’s pricing efficiency.
Betting Exchange Glossary (addition)
Stall Draw: In horse racing, this refers to the numbered stall from which a horse starts the race. The stall draw can significantly impact a horse’s chances, depending on the racecourse layout.
SP (Starting Price): The official odds of a horse at the start of a race, as determined by the bookmakers. Also used in other sports for the starting price (odds) of the selection.
Each-Way Bet: A bet split into two parts: one backing the horse to win and the other backing it to place (e.g., finishing in the top three). This approach provides a safety net, offering a return even if the horse doesn’t win but places.
Understanding these terms will enhance your betting exchange experience and help you make more informed decisions. For expanded terminology, you can also check Betfair’s betting exchange glossary or Bet Angel terminology.
