Opinion: Betfair Exchange Back to Lay Trading:
Trading: Easy Money or Much Ado About Nothing?
If you’ve ever read articles about Betfair Exchange trading, you probably noticed a common theme. Each of these alleged ‘experts’ suggests that it’s ‘easy money.’ They make it seem as if it’s the easiest thing in the world. All you need is high-speed Internet, a comfortable chair, and a bit of patience; right?
Articles such as “Making 5.64 points of trading profit in 60 minutes” see contributors spend more time boasting about their wins than providing you with useful guidance. Like most things, Betfair Exchange football IS easy, as long as you have ample knowledge of football and trading. Not many people have both which is why so few people can make a living in this manner.
Although this guide will outline ways and means to trade on Betfair, it is designed to help you earn a little side cash. It is NOT a guaranteed way to earn enough money to quit your job as some unscrupulous individuals suggest.
First of All: What is Back-to-Lay Betting?
As you can probably guess, it is the practice of placing an initial ‘back’ bet (you think the outcome will happen). Later, you place a ‘lay’ bet (you think the outcome will NOT happen) at odds lower than your initial ‘back’ bet for a guaranteed profit. It is regularly used in horse racing by punters who see lots of money being placed on a horse which causes its odds to shorten.
Here’s a simple example of a back-to-lay trade in action. You see a game with the potential to be very low scoring.
- You bet £50 on the draw at 3.8 for a potential profit of £140.
- After 25 minutes, the game is 0-0, and the draw can be laid at 3.0.
- You lay the draw at 3.0 to win £63.33 with a liability of £126.66 to guarantee a profit.
- If it’s a draw, you win £140 – £126.66 for a profit of £13.34.
- If it isn’t a draw, you lose your initial £50 but win the £63.33 bet, so you get a win of £13.33 or £13.34 regardless of what happens in the match.
It seems rather simple in theory, but in practice, you must have knowledge of football or else you’re sunk.
Betfair Exchange Trading – Things You’ll Need
There are several betting exchanges, but Betfair is by far the largest. This is important because successful trading relies on market liquidity. It doesn’t matter if you call a match correctly and ‘lay’ at the right time if no one matches the bet!
Ideally, you’ll have a desktop computer with fibre-optic Internet because speed is everything in trading. If you’re serious about trading, it is worth investing in software from a reputable provider.
Betting Bank & Staking Plans
If you don’t understand the importance of a betting bank, it is a good idea to read Football Advisor’s post on dumb staking plans. When you commit to trading, deciding on a betting bank and staking plan is crucial. It is usually the difference between success and failure in fact.
Far be it for me to tell you precisely how to bet. After all, I don’t know your financial situation. Suffice to say, consider how much you can afford to lose and divide it by one-third; that’s your starting betting bank. Let’s say you have £300 to spare. Open with a £100 bank and begin trading. That way, you have ‘backup’ cash in case you make a mistake.
While it is best to bet as little as 2% of your betting bank on a ‘win’ bet, you can go as high as 25% when using a back-to-lay strategy because, in theory, you should only lose a fraction of your bet if you get it wrong.
If a trade goes south, get out as soon as you can. You are trading rather than betting on an outcome. In our (rather risky) example above, if there were an early goal, the odds on a draw would increase dramatically, perhaps to as high as 6.0 from the initial starting point of 3.8. The longer you wait, the worse your position gets. You’re hoping for an equaliser to bail you out, but if the team that’s winning gets the second goal, your entire stake is almost certainly gone.
What Type of Bets Are Worth Trading?
The age-old saying ‘back high and lay low’ is a worthy mantra but for neophyte traders, I would recommend sticking to games where the odds are in the 1.5 – 2.5 range. Depending on liquidity, it is possible to make a couple of points worth of profit in very quick time.
The next step is to research potential bets. The number of goals scored in a game is always a very popular trading strategy. Despite my protestations about the English Championship, it is always a good place to find examples! I checked a game between Reading and QPR which was certainly an eye-catcher given both sides’ propensity for goals. At the 10-game stage, 70% of Reading’s games had over 2.5 goals while 50% of QPR’s games had 3+ goals.
Odds of 2.16 seem generous. The other thing to note is liquidity which is the amount of money in the market. Generally speaking, the more money bet on the game, the more you can earn as long as you know what you’re doing. I took the screenshot almost 30 hours before the game which is why there was only £16 wagered. By game time, there should be tens of thousands of pounds in that particular market.
The other important thing to consider is the gap between ‘back’ and ‘lay’ at the time you place the ‘back’ bet.
I took a random women’s U19 game to use as an example. You could back over 5.5 goals at 5.0 but could only lay at 7.0. Ideally, the back and lay figures will be close together. If they are close enough, you could benefit from Weight of Money (WOM) and barely have to do a thing.
A tight game is expected between Bournemouth and Crystal Palace in the Premier League. If you look at Bournemouth’s odds, they are 2.34 to win, and you can ‘lay’ a home win at 2.36. With over £187,000 already wagered six hours before kick-off, there is potential for Bournemouth’s win odds to be cut which means you could benefit from a quick profit.
Incidentally, the home side was as short as 2.25 at the major bookmakers, and almost 50% of the money had been placed on Eddie Howe’s team at the time of writing. Even if you get this trade wrong, the price is unlikely to move significantly away from you.
What About Scalping?
‘Scalping’ is a technique where you use small price movements to make a profit in a matter of seconds. As you can imagine, this is very difficult to do without the requisite software. In liquid markets, the price fluctuates rapidly, so you need to learn how to read the fluctuations and determine the right time to jump in. Next, be content with a sliver of profit and get out. If you learn how to scalp correctly, you can make several tiny profits in a short period.
One of the best moments to scalp on Betfair comes when a team scores a goal in a major game. It is common for the market to significantly overreact to a goal (I see it happen with the ‘regular’ bookies too).
For instance, let’s look at Liverpool vs. Man City; a game likely to have goals.
For argument’s sake, over 3.5 goals is 2.50 and over 4.5 goals is 4.2. In this hypothetical example, Liverpool score after just four minutes. Immediately, the over 4.5 goals price comes in to 2.24. The odds should be closer to 2.50 because you are effectively betting on the match to have another 3.5 goals to add to the one we’ve already had.
In this instance, you would lay at 2.26 or 2.28 because the price should quickly return towards 2.50 once the market has settled down. This could happen in under a minute, so the chances of another goal being scored are extremely slim. In this instance, it is best to stay at 3.5 or 4.5 goals because if another goal IS scored quickly, any lay bets on over 1.5 goals will lose.
Another possible trading option is to back the over/under corner market. Betfair tends to have a handful of specific markets. For instance, the Bournemouth vs. Crystal Palace game has over/under 5.5, 8.5, 10.5, and 13.5 corners. In a game where a high-ranking side like Manchester City is losing to a mid-table side at home and time is running out, for example, you would expect City to ramp up the pressure and force a lot of corners against a team that is defending deep. It helps if the chasing team plays with width and tends to send a lot of crosses into the penalty box.
One interesting tip I read points out that laying at integer (whole number) odds could help you win. If you lay at 2.00 for example, ticks down (your loss) are smaller than ticks up (your profit). Remember, the Betfair Exchange goes up and down by 0.01 up until 2.00; then it goes up and down by 0.02.
Final Thoughts on Betfair Exchange Trading
In summation, I would classify trading on the Exchange as a hard way to make easy money! First and foremost, I don’t recommend doing it for a living because you can quickly overwhelm yourself with the pressure of trading to make ends meet. It is in this situation that mistakes are most likely to happen.
If you get greedy, you WILL pay for it eventually. Rather than hoping and praying that a bad trade rectifies itself, get out with whatever cash you can and learn from your mistakes. The moment you become too emotional and start ‘chasing’ is the very point when you have truly lost.
Self-discipline is essential; both in terms of the size of your stakes and the frequency of your trades. You will win more in the long-term by reducing your trading frequency and using fewer criteria for selections.
If pushed, I would recommend choosing the goals market as your primary trading basis for football. It is always dangerous to focus on match winner markets when backing to lay. All it takes is a goal against your team to destroy your trade. When you bet on an overs market for goals, your position gets weaker with no goals but it takes longer, and if a goal is scored, you’re in a position of strength.
Pay special attention to over and under markets when a goal gets scored. Punters tend to panic, and by demonstrating just a little bit of patience, you can assume a very strong position in the market.
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Patrick graduated from the National University of Ireland, Galway with an MA in Literature and Publishing but decided he would rather have the freedom of a freelance writer than be stuck in a publishing house all day. He has enjoyed this freedom since 2009 and has written thousands of articles on a variety of topics but sports betting is his passion. While his specialty is finding mismatches in obscure football leagues, he also likes to use his research skills to provide punters with detailed winning strategies in horse racing. You can check out his personal blog on www.lynchthewriter.com or Twitter @pl1982 where he writes content to help small businesses achieve success.