Betting exchange trading is possible because you're able to back and lay the same outcome at different points.
As a football trader, you will attempt to predict major events - such as goals - which move market prices in a particular direction. This price movement is what will allow you to back high, lay low (or lay low, back high) in order to lock in guaranteed profits.
Once you understand how backing and laying for profit works, the sky is the limit. A proven football betting system will grow your bank over time and it's even possible to back and lay on Betfair for a living.
First things first though, here is back and lay betting explained step-by-step.
What does Back and Lay Mean?
A traditional bookmaker takes 'back' bets. You back an outcome in a betting market and the bookie pays out if your bet wins.
However, betting exchanges - such as Betfair - allow you to 'back' or 'lay'.
As well as being able to 'back' an outcome, you can also take on the traditional role of the bookmaker and 'lay' it. In other words, your bet wins if the outcome of an event doesn't happen.
For example, let's say you are interested in betting on the winner of the Premier League.
You can see the back and lay odds below:
On Betfair, back odds are displayed in blue and lay odds are pink.
In this example, Arsenal are the current favourites to win the Premier League with back odds of 2.48. This means that if you back Arsenal with a £10 stake, your return will be £24.80 (£14.80 profit) if Arsenal go on to win the title.
A lay bet is the exact opposite, so you are betting on something not to happen.
If you lay Arsenal, you are betting on Arsenal not to win the Premier League. If any one of the other 19 teams wins the title, your lay bet wins.
Lay Bet Liability
When placing a back bet, you can never lose more than your stake. However, when you lay a bet, the liability can be a lot more than your stake and you must be fully aware of the risk before placing your bet.
In the Premier League example, Arsenal are 2.48 to back and 2.52 to lay.
If you decide to lay Arsenal for a stake of £10, you will win £10 if any other team but Arsenal wins the Premier League. Just as you stand to lose your stake when backing Arsenal, a lay bet is opposite so you win your stake if Arsenal don't become champions.
If Arsenal do go on to lift the trophy though, your liability will be determined by the lay price and, again, it's the opposite of backing.
In this case, it would be (£10 x 2.52) - £10 = £15.20
Backing and laying are simply opposites:
- Back Arsenal with a stake of £10 at 2.48 to try and win £14.80
- Lay Arsenal with a liability of £15.20 to try and win £10
When placing a lay bet, your liability is always removed from your account balance as Betfair has to assume the worst case scenario - that you lose your bet. Therefore, you can never risk losing more than the money you already have in your Betfair account.
Once the Premier League winner has been decided, the market will be settled. Bear in mind that you may have a large liability tied up for many months if you get involved in long-term trades.
Lay Bet Calculator
Our bet and lay calculator - also known as 'hedging' - helps you to calculate back and lay stakes quickly and easily in order to lock in profits.
It's free to use and worth adding to your bookmarks. You can even add it to your own website, if you have one!
Low Risk Lay Bets
In the example above, laying Arsenal produced a larger liability than the potential profit. However, if you always lay under 2.00 then you will stand to win more than you risk losing and many Betfair laying strategies aim to take advantage of this.
Spend some time watching the Betfair markets and see how prices move - even without goals.
For example, the 0-0 price at kick-off will be a very high price to lay, but by half-time it's often a third of the starting price. This movement is called 'time decay' and it continues all the way to the final whistle unless a goal is scored.
If you're patient, you could lay 0-0 in a game with a team desperately trying to score as time runs out and - rather than risk many times your stake - make sure that the risk/reward is in your favour.
It's much better than sweating on a goal because you couldn't wait to get into the trade and created a huge liability!
Lay the Draw Trading
Lay the draw (LTD) has been one of the most popular football trading strategies for many years.
It's a very simple way to get started with Betfair trading and - if you're patient - it can be very low liability. There are plenty of lay the draw strategies to take advantage of at various points during football matches and most professional traders use it a lot.
Lay Betting Strategy
Making money on Betfair is all about backing and laying at the right times.
For example, at the start of the 2015–16 season, Leicester City were available at a huge price to win the Premier League but their odds were much shorter as they closed in on the title.
Euro 2016 provided a profitable trading opportunity too.
Unsurprisingly, the favourites were the traditional powerhouses of European football - Germany, France and Spain.
Further down the list, however, there were opportunities to back up and coming teams at high prices.
Iceland were one of the major surprises during qualifying, finishing in second place in Group A. As they recorded a string of stunning results during - including wins home and away against the Netherlands - their odds to win Euro 2016 started to steadily drop.
It was a fantastic back-to-lay opportunity, with traders who backed Iceland earlier at odds of 500/1 able to lay at much shorter odds in order to lock in a profit.
Iceland drew Portugal, Hungary and Austria in Group F of the Euro 2016 finals, with the top two from the group going through to the next round, as well as the best third-placed team.
It was a test for them, but their fantastic success in qualifying showed how capable they had become at international level in recent years. Greece's historic success at Euro 2004 proved that smaller countries can thrive at the European Championships and, even with the new reorganisation to a 24 team event, Iceland had a chance.
Before the tournament began, Iceland were priced on the Betfair exchange at 100 to win Euro 2016, meaning a £10 back bet on Iceland would have resulted in a profit of £990 should they have taken the title.
Once Iceland qualified from Group F, their odds dropped substantially, meaning it was then possible to place a lay bet to lock in a good amount of guaranteed profit. After their win against England, their odds came down even further.