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Exchanges Posted:
17th Mar 2006

Understanding Betting Exchanges

Betting Exchanges are basically a simple means to bring punters together to bet against each other. It is person-to-person betting, using the 'exchange' as the go between just like a stock exchange puts share owners and sellers together.

Punters can back their preferred options just as they would do at a traditional bookmaker, but they can also now 'lay' a price - i.e. bet AGAINST a horse/team winning.

What does an exchanges different and how do you use?

The betting exchanges consistently offer the punter a better price about their preferred option than the high street bookmakers, and offer the extra advantage that you can ask for a better price than is on offer, and hope that someone will come in and match your request.

Another advantage of the exchange is the ability to change your position/who you want to win/loose during a long term event e.g a Football game. Thus if you backed Arsenal for £10 at 16/1 back in May, you could now lay them 2/1 (bet against them winning the league) in order to guarantee a profit either way - you could offer £30 of your potential profit, in order to win £15 if they fail - thus covering you initial £10 stake.

- In this example, your first bet, at 16/1 would result in a £10 loss if Arsenal fail to win the league, while a £160 profit if they are crowned champions.

- In the second bet, you are laying Arsenal for £15 of your opponents money, to £30 of your. If Arsenal win the league, you would lose £30 from this bet, but if they fail, you would win £15.

- When the two bets are both accumulated, Arsenal winning the league would return a £160 profit from bet 1, and a £30 loss from bet 2, thus a £130 profit. If they fail, bet 1 would lose you £10, but bet 2 would win £15. Thus a £5 profit.

- As you can see, you would have made a win-win situation in this example.

Successful traders on exchanges also use the exchanges since they are not punished for winning. If you take several big wins from a bookmaker, the likelihood is that your stakes will be limited or your account closed. Not so with online exchanges - all players are more than welcome.

The main advantage from the exchanges is simply the ability to lay a price rather than back it. Suppose Newcastle are 3/1 to win a game, but you think it is even more unlikely than that. You could offer 7/2 about Newcastle winning the game (effectively betting at 2/7 that they WON'T win).








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