How to Trade in Betfair Exchange

You know that it's possible to trade stocks, currency and shares. But it's also possible to trade bets. Just like in financial trading you need to buy lower and sell higher to profit. Instead of simple bookmakers you need to use betting exchanges such as Betfair.

Advantage of betting exchanges over regular bookies is that exchanges allow bettor to place Lay bet. Lay bets are opposite to simple bets (back) you can place at bookies. You can win when every other outcome comes true except your selected. Another difference is that profits are always equal to your stake, but loses are calculated from odds.
For example, if you lay odds of 1.5 with 100$ you risk losing 50%, but possible win is 100$. If you lay low as 1.05 you risk losing only 5$, but you can win 100%. Remember that low odds loses too. Laying is not less risky than Backing it's different approach to betting.

Mechanics in Betfair trading are similar to ones in financial trading. Aim of trading in Betfair is to Lay at lower odds and Back at higher. By doing so traders can eliminate possibility to lose and guarantee only profit outcome. To be able to trade in Betfair you need to know how odds moves. That's the key to Betfair trading. Correct prediction of odd movement is a key to successful trading.

Basically you can divide trading in two parts - live trading and pre-match trading. Where first one is more risky, but in same time can be more profitable, but in pre-match trading odd movement will be smaller. In live trading odds are affected by events in a match, for example a goal is scored. Pre-match odds movement are more similar to financial trading and patters from financial trading can be applied to pre-match odds trading, especially in horse racing.

You can learn more by reading full Betfair Trading guide.