EN

# Odds from Exchange market

2017-09-08

Exchange markets offer a slightly different type of betting than bookmakers. A bookmaker is a company who make separate and individual betting transactions with punters. Bookmakers buy and sell bets with their own money and make profits from an added value from the transactions.

At the other hand, exchange market is a company who offer a platform for the punters to bet their money in. With this platfrom punters bet for or bet against for sport event and make betting transactions sharing each other their own money. The exchange company make profit from commissions taken from those who win.

Exchange uses only decimal odds with two main types «back» and «lay». Those who want to bet for an event to win, they bet at "back" values and those who want to bet against an event, they bet at "lay" values.

Let’s make an example with match odds FT:

Home win : Back: 1.70, Lay: 1.72

Away win : Back: 5.50, Lay: 5.80

Draw : Back: 4.10, Lay: 4.30

With back prices you bet for the event to win, at the same way as the traditional bookmakers. With lay prices you bet against the event. The mathematical formulas for back and lay values are:

Back :

1. Net Profit = (back – 1.0) * Stake

2. Loss = Stake

Lay :

1. Net Profit = Stake

2. Loss = (lay – 1.0) * Stake

An example:

If you want to bet with a stake of 25€ then,

1. To bet Back for home team

If Home team win:

Net Profit = (1.70 – 1.0) * 25 = 0.70 * 25 = 17.5

So you win 17.5€ + your stake 25€ = 42.5€

If Home team lose:

Loss=25€

1. To bet Lay for the home team.

If Home team win:

Loss = (1.72 – 1.0) * 25 = 0.72 * 25 = 18.0€

If Home team lose:

Net Profit = 25€

So you take 25€ + your stake 25€ = 50€

Note:

Be careful with Lay prices

When Lay price is below 2.0 then you lose less than your initial stake:

With stake 25€ and Lay=1.72, your Loss=(1.72 – 1.0) * 25 = 18.0€

When Lay price is above 2.0 then you lose much more than your initial stake:

With stake 25€ and Lay=5.80, your Loss=(5.80 – 1.0) * 25 = 120.0€