Lay the draw trading – often abbreviated to LTD – has been around since the early days of Betfair.
For many years it was one of the best football trading strategies you could find, but LTD has faced a few problems due to its growth in popularity.
In this post I explain the traditional lay the draw strategy, discuss why it is not as effective as it once was, then share a few ways to improve your own lay the draw trading results.
How Does Lay the Draw Work?
In essence, traditional lay the draw is very simple; you lay the draw at a betting exchange and wait for the favourites to score.
Once they have scored their goal the market will assume that they will go on to win the match and so the draw price rises.
At this point you are able to trade out for a profit.
Sounds very easy, doesn't it?
Here's a real life example with all the detail behind the LTD strategy as it was in the good old days.
Let’s say that Liverpool are at home to Wolves and your view is that Liverpool will win.
With a traditional bookmaker you can back Liverpool to win and that’s pretty much it.
There are many markets which determine how Liverpool will win, for example Liverpool to win and not concede any goals or Liverpool to win by more than one goal, but essentially all you can do is back Liverpool.
The price for the home win will not be particularly attractive as the expectation is that Liverpool will indeed win the game.
With a betting exchange, however, you also have the option of laying.
You could lay Wolves or lay the draw and both of those will return a profit if Liverpool end up victorious.
Early in the 2011/12 English Premier League season, Wolves travelled to Anfield and Bet365 priced up the game as follows:
- 1.36 Liverpool to win
- 4.50 Draw
- 10.00 Wolves to win
Taking the view that the game will end in a home win, your options for this game were:
- Back Liverpool at 1.36 – Risk £10 to win £3.60
- Lay the draw – Risk £35 to win £10
- Lay Wolves – Risk £90 to win £10
Now comes the really clever bit and the reason why LTD can be so profitable.
If you lay the draw at 4.50 your risk is £35 if you do nothing in-play.
But traders keep their money as safe as possible, so doing nothing is not an option.
Once the match hits the 65-70 minute mark and the score is level, the draw odds will have dropped to 2.00 or so because time is running out and the market feels that a draw is becoming more likely.
At that point, you can back the draw at 2.00 for £22.50 and this will leave an equal loss across all three outcomes of £12.50.
Suddenly, your liability has been cut dramatically.
So if you bear that strategy in mind, your options for the game now are:
- Back Liverpool at 1.36 – Risk £10 to win £3.60
- Lay the draw – Risk £12.50 to win up to £10
- Lay Wolves – Risk £90 to win up to £10
One option stands out by a mile; lay the draw.
The risk is not much more than backing Liverpool, but the potential reward is far higher.
Laying Wolves just makes no sense – unless you’re short of stress in your life!
If Liverpool are ahead at any point in the game you can take a profit as the market will think that Liverpool will go on to win.
The draw odds will rise because the chance of a draw will be deemed less likely with the favourites ahead.
You can back the draw at those higher odds in order to cover your liability and leave an equal profit on all three outcomes – win, lose or draw.
You could even leave all your profit on the Liverpool win and make sure that the draw and away win are both ‘scratch’ in case they let their lead slip.
The more goals that Liverpool lead by, the higher the draw odds will rise.
A one goal lead will typically secure a profit of £3.50 or so.
Two goals up will usually leave an £8.00 or so profit in this sort of game, three goals up and the profit will be £9.80 or thereabouts.
That’s much more than the £3.60 profit you would make from backing Liverpool to win!
But what if Wolves go ahead?
If the underdog goes ahead in a game such as this one, the draw odds will move depending on when the goal is scored.
If Wolves go ahead in the first half then the draw odds will typically drop to 3.50 or so.
At this point you have three options:
- You can leave your position as it is and hope that either Wolves go on to win or Liverpool stage a comeback.
- You can back the draw for your original stake of £10 which leaves a liability on the draw of £10. The advantage of this is that if either team wins, you end up with a ‘scratch’ trade, i.e. no profit or loss and the draw liability is far less than the original £35.
- You can back the draw for £12.80 and leave a liability on each outcome of approximately £3. Much lower than the £35 liability you started with.
Typically in this situation, you’d stay in the game and see what happens.
If Wolves go two goals up then you can take a small profit and if Liverpool equalise then it is business as usual.
The difficulty comes at the 65 minute mark when the underdog is leading.
A conservative trader will back the draw at that point, perhaps leaving all the liability on the underdog or splitting it between all three outcomes.
A more aggressive trader might stay in longer and hope that the underdog can hang on until late in the game when the draw odds have risen enough to allow a scratch trade.
The risk here is that the favourites equalise and there’s not enough time to find a winner.
In that case, the trader is staring at a full loss of £35.
There are many other strategies for dealing with games where the underdog is ahead, but the basic decision is whether to stay in or trade out and accept a smaller loss than if the game ends in a draw.
I would strongly advise a conservative approach to begin with as being too aggressive can lead to large losses.
It is much easier to cover a smaller, managed loss than it is to make up a full £35 loss.
Always think long-term and protect your bank.
What actually happened with this game was that Liverpool took a 2-0 lead into half time and it was possible to trade out with a profit of around £8.00.
Wolves pulled a goal back in the second half and the game ended 2-1.
Whichever lay the draw strategy you had used to trade this game you would have made a profit as the favourite was always ahead.
If you’d simply backed Liverpool to win then your profit would have been just £3.60.
"That's great Steve, thanks" I hear you say, "I'm off to lay the draw and make my fortune!"
Well... just before you go...
How Has Lay the Draw Changed?
With lay the draw being such a great strategy it became very popular.
At one point, almost every Betfair trader was using LTD in one form or another which brought about a big problem.
As any economist will tell you, there’s such a thing called ‘supply and demand’.
If Bob the shopkeeper has 50 cans of beans to sell but the shop next door starts a half price deal, he is going to have to drop his price or face selling none.
However, if a newspaper article goes viral about beans being super healthy and all the other shops are suddenly out of stock, Bob can put his price up and still expect to make sales.
Very simply, If more customers want to buy beans than there are beans available, the price is likely to rise.
We can apply that logic to Betfair match odds markets.
If a greater number of football traders suddenly want to lay the draw, the price will rise.
Sure, liquidity may increase but there is always a limit – especially in smaller leagues.
Once the favourites score, the draw price rises as normal and all of those extra traders want to back the draw in order to lock in their profit.
The first few may get matched at 8.00, for example, then that liquidity runs out.
More traders are matched at 7.80, then 7.60, then a few think it’s best to be safe so are happy to get matched at 7.40.
At some point it actually becomes value to lay the draw again, but that’s a discussion for later on.
More lay the draw traders means laying at a higher price and backing out again at a lower price, hence less profit margin.
The real kicker comes when there’s a loss – and they happen from time to time, we all know that.
A loss is not going to get any cheaper and, if laying the draw at a higher price, will in fact get larger.
It used to be possible to cover a loss with 2-3 profitable trades and get back on track quite quickly, but these days it may take up to five games if favourites only get to 1-0.
So, as lay the draw became more popular, traders enjoyed smaller profits and suffered larger losses. Not good!
Is it Still Worth Bothering With LTD?
Yes, but we must adapt.
Betfair markets are always evolving and traders have to move with them – or fail.
This is why Kevin and I are forever updating Goal Profits strategies for members and developing new angles.
In the Members Area we are able to update or switch out systems which have lost their edge, ensuring that members always have an advantage over everyone else trading on the betting exchanges.
When I first starting trading football on Betfair, I thought it was as easy as buying a few profitable systems and then sitting in front of my computer screen to start lining my pockets.
Unfortunately, I quickly realised that's not how it works in the real world.
There are a lot less eBooks on sale these days which promise riches for just "five minutes work" and that's because punters have become wise to the many scams.
Think about it... if Betfair trading was so easy then no-one would go to work on Monday morning, they’d all be trading!
But anyway, back to lay the draw.
As profit margins declined from the traditional LTD method, many football traders declared it was all over – that lay the draw was dead. What a load of rubbish!
You don’t quit because it’s getting a little more difficult, you find a way to make it work again.
You adjust the way you select matches and the way you trade them.
You think out of the box, whatever it takes to get the risk/reward back in your favour.
Quitters drive me crazy!
This is a key part of any trading strategy. Thankfully, many of the LTD basics have not changed:
- Liquidity: Only ever trade matches which have plenty of market liquidity. It may be easy enough to get in to a trade, but getting out is far more important. If there's not a lot of money in the market and a bunch of LTD traders all try to get out after a goal, some will be unable to get matched or will be forced to take a much smaller profit. It's just not worth taking bigger risks for less reward.
- Goals: More goals mean more chances to trade out with a profit. You are always going to hit the odd 0-0 draw, but aim for plenty of goals and you will minimise losing trades. Recent form is a great indicator, making sure that teams you're banking on have been scoring goals.
- Red cards: Don't ever get involved with matches in which there has been a red card shown. Stats go out the window, market prices overreact and you're often left with one team defending for their lives and clinging to that draw. That's the last thing you want!
If you select matches in which there is a strong favourite, you really need that team to fire. Should they draw a blank in front of goal or they go behind to the underdogs, you're facing a tricky situation.
However, if you look for a match in which the teams are fairly equal then you will usually find that the draw price is a lot lower to start with - less risk - and that you will be able to trade out with a profit no matter which team scores.
I receive so many emails asking for lay the draw insurance advice and my answer is the same every single time; I haven't found a single method which works.
- You could lay the draw and back 0-0, but then a goal takes the insurance away and reduces your profit margin.
- You could lay the draw and back 1-1, but the price is usually pretty low and 0-0 would be a double loss.
- You could get some cover in the over/under 1.5 goals market but are you going to cover unders (0-0) or overs (1-1/2-2)?
Everything I have tried has eaten away at the overall profit margin and ended up costing more than the few occasions it's actually useful.
And don't forget that you have to make enough to cover the exchange commission too as you'll be working in more than one market. It simply doesn't add up.
It's much more productive to focus your energy on better match selection instead.
Trading Out For Profit
Once you get yourself into a winning position and decide to bank some profit, you have options:
- Back the draw for the same stake you used to lay and you'll be left with scratch on the draw and all of your profit on either team winning.
- Back the draw so that all three outcomes have exactly the same profit. You can then walk away, knowing that your profit will be added to your Betfair account at the final whistle.
It may be tempting to click the "cashout" button on Betfair but don't do that!
You will be handing control of your funds over to Betfair who will cash you out with whatever price happens to be available at the time. Crazy!
If you use trading software, such as Fairbot, you can pick the price at which you wish to trade out and do it with one click. You can often make a few more ticks of profit and that really mounts up over the months.
If you don't have trading software, use our free hedging calculator instead.
I already explained in the Liverpool v Wolves example how to cut your loss at the 65-70 minute mark and that is traditionally the most popular lay the draw exit strategy.
Not everyone likes to employ that stop loss though. If you think about it, if a team really wants to win the game, then they need to get attacking before time runs out.
There are a lot of goals scored in the last 15-20 minutes of matches, so do you really want to give up that golden time?
Something we are doing more and more at Goal Profits is 'trading in' rather than 'trading out', in other words, waiting for prices to drop before laying the draw.
Sure, we miss out on some trades which go on to be winners, but I'd rather wish I was in a trade than out of one!
The massive benefit is that there's no trading out just as the best part of the game for goals begins.
This strategy is for times when the underdog goes ahead against a strong favourite.
Let's say there's a home favourite and the score goes 0-1, with Metaltone you would back the draw with 50% of your liability and lay the underdog with 75% of your liability.
The idea behind this is that the favourites will equalise at some point, pushing the price on the away win a lot higher and you'll be able to trade from there; either locking in a profit or going back to a lay the draw trade.
That's all well and good, but as time ticks by and the score remains 0-1 you'll have been edging closer to a profit by doing nothing.
And if the score were to go 0-2 - or the favourites pick up a red card - you'd be in profit, whereas with Metaltone you'd be in the red.
So... should you use it or not?
My advice is use Metaltone now and again, rather than as a standard part of your trading strategy.
If the favourites are in good scoring form and the in-play stats show that they're on top, it can be a very effective way of getting out of trouble.
Be flexible with your trading.
How I Lay the Draw Nowadays
I have been forced to tackle the evolution of the Betfair match odds markets, ensuring that lay the draw is still a profitable trading strategy to use.
In order to reduce liability and increase profit margins, I set out to develop first half and second half lay the draw strategies. First half LTD is more difficult to get right because teams don’t have to score, but the market knows that so prices are reduced accordingly.
I developed a couple of very strong strategies which Goal Profits members have full access to, including a daily shortlist of matches delivered by our Team Stats software.
Kevin further developed these first and second half strategies by taking advantage of goal windows.
Without Team Stats data I wouldn’t fancy my chances, but the automated filters are working well.
I also developed and tested a ‘full match’ lay the draw strategy.
It is higher risk than first or second half lay the draw and that doesn’t suit all types of trader, but it is available for those Goal Profits members who wish to use it.
Rather than the traditional LTD method with its squeezed margins, this new version specifically looks for matches which are likely to go 2-0 and bank a much bigger profit.
Lay the draw trading has been around for almost as long as Betfair and it will not be going anywhere soon, no matter what the doom and gloom merchants try to tell you.
In fact, the more who declare that LTD is done with the better as that means less traders fighting over the same prices and more profits for us!
As the old saying goes, "quitters never win and winners never quit".
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