Unlike betting with a bookmaker, when you bet on the betting exchanges you are not obliged to accept the price that is currently on offer.
If you think the current price is too low or too high, you can simply ask for a better one.
Let’s look at an example of a market on the largest betting exchange, Betfair. This market is for the “match odds” on a football match between Bayern Munich and Lyon. So people here are trading bets on what the final result of the match will be.
You can see that at the current time, the best available price to place a back bet on Bayern Munich to win the match is 1.71 – this is highlighted by the red arrow. Don’t worry too much about the other numbers at this stage.
Now if I was happy with 1.71 as a fair price to back Bayern Munich, I could place my back bet at that price right now and it would instantly be accepted by a layer.
However, if I thought that 1.71 was too low, I have the option of asking for a higher price. What I can do is place a bet (also known as submitting an order) at a price that I thought was fair – let’s say 1.72.
If I did that, my order would not be matched with a layer straight away. Instead, it would join the queue of money at the price of 1.72, waiting for a layer to come along and accept it.
So my money would join the queue here:
The queues of money are dealt with on a first come, first served basis, so my back order would join the back of the queue. At the current time, there are £21,417 worth of back orders ahead of me in that queue.
If enough people came along wanting to lay bets on Bayern Munich however, my back order would eventually be matched with a layer, resulting in me getting a better price.
Exactly the same principles would apply if you were looking to place a lay bet. In the above market, you could place a lay bet on Bayern Munich and be instantly matched with a backer if you accept the current lay price of 1.72.
However, if you thought that price was too high and wanted to offer backers a lower price, your order would remain unmatched in a queue of money at the price you specified, waiting for a backer to come along and accept the price you offered.
Of course, when you ask for better prices there is no guarantee that somebody will be willing to accept the price you are offering or asking for.
However, as long as the prices you are asking for are not too unreasonable, you stand a good chance of getting your orders matched which will result in you getting more favourable odds for your back and lay bets.