Back and Lay are terms commonly used in betting exchanges, which are platforms that allow individuals to bet against each other rather than against a traditional bookmaker. These terms refer to the two sides of a bet.
This is the traditional form of betting where you bet on a particular outcome to happen. For example, if you back a team to win a football match, you are betting that they will win. If your selection is successful, you win the bet.
This is the opposite of backing. When you lay a bet, you are betting that a particular outcome will not happen. In a lay bet, you take on the role of the bookmaker.
If the outcome you bet against doesn’t happen, you win the stake of the person who backed that outcome.
The bookie will take a small facilitation fee (commission) that varies from bookie to bookie
What are the best sports for back and lay betting
Back and lay betting can be applied to various sports, but some sports lend themselves particularly well to these strategies due to their characteristics and popularity among bettors. Here are some of the best sports for back and lay betting:
- Football is one of the most popular back and lay betting sports due to its global appeal and wide range of markets.
- Markets such as match winners and over/under goals provide ample back and lay betting opportunities.
- In-play betting during football matches allows for dynamic trading and hedging strategies.
- Horse racing is a traditional sport for back and lay betting, especially on betting exchanges.
- Races typically offer large fields and competitive odds, allowing for potential discrepancies between back and lay prices.
- Traders can take advantage of price movements before and during races to profit from arbitrage or scalping strategies.
- Tennis offers a straightforward and fast-paced environment for back and lay betting.
- With only two possible outcomes in most matches (win or lose), the simplicity of tennis betting appeals to many bettors.
- In-play betting during tennis matches allows for quick reactions to momentum changes and provides trading opportunities.
- Cricket is popular for back and lay betting, particularly in major tournaments like the Indian Premier League (IPL) and international matches.
- Markets such as match winner, top batsman, and top bowler offer back and lay betting opportunities.
- In-play betting during cricket matches allows for strategic trading based on changing game situations.
- Basketball offers a fast-paced and high-scoring environment for back and lay betting.
- Markets such as match-winner , point spreads, and total points provide diverse opportunities for betting.
- In-play betting during basketball games allows for dynamic trading and reacting to momentum shifts.
Other sports for back and lay betting
- American Football
- Ice Hockey
- Greyhound Racing
How does back and lay betting work
Back and lay betting operates on the principle of a betting exchange, where individuals can place bets (back) and accept bets (lay) from other users. Betfair is a known a betting company that offers betting exchanges. We will use Betfair exchanges to explain how back and lay betting works.
On Betfair the Back bets odds are presented in Blue, while the Lay odds are in Pink. Here is how they work:-
- You believe a particular outcome will happen (e.g., a team winning a match).
- You place a bet on that outcome, specifying the amount you want to stake and the odds you are willing to take.
- Your bet is then matched by someone willing to lay the same outcome at the specified odds.
An example of a back bet
- If you back Team 1 (Sheffield Wed) to win with a £50 stake at odds of 2.48. That means that your profit will be £74 if they go on to win the match. The profit is the difference between the total return and your stake.
- That is, (£50 x 2.48) – £50
- Your bet will be matched with a user who is laying the Sheffield Wed at the same stake.
- You believe a particular outcome will not happen (e.g., a team not winning a match).
- You offer to accept bets from other users who want to back that outcome.
- When someone backs a bet at the same stake you are laying you liability with, they place a bet with you, and you become the bookmaker.
Your ‘liability’ is the amount you could lose in your worst-case scenario. Your return for a win is effectively your stake (minus commission).
An example of a lay bet
- If you lay to Sheffield Wed. It means you are betting on them not to win. Therefore, a draw or a win for Birmingham wins your bet.
- If you lay on Sheffield Wed with a £50 stake at the odds of 2.5, means you will earn £50 if Birmingham wins or the games end in a draw.
- However, your will incur £75 in liability if you lose the bet. The liability is deducted from your account balance.
- Even though you are putting 50 pounds on the line, your account balance must have 75 pounds for the lay to work at 2.5 odds
- If you have £75 and the game ends in a draw or Birmingham wins, you will earn the £50 making your account balance 75+50 = £125. The other outcome will see the £75 deducted from your account balance leaving you at zero.
- This means in any lay bet, the amount on the line is Stake x The Odds
What happens if you lose a lay bet
If you lose a lay bet, it means that the outcome you bet against actually occurred, resulting in a loss for you as the bettor who laid the bet. Here’s what happens when you lose a lay bet:
Loss of stake
When you lay a bet, you act as the bookmaker, accepting bets from other bettors who believe in the likelihood of a particular outcome not happening. If the outcome you laid the bet against does occur, you are responsible for paying out the winnings to the bettor who backed that outcome (i.e you pay their total winnings).
Payout to the backer
The amount you lose on a lay bet is determined by the stake you settled for, multiplied by the odds at which they placed the bet. You are required to pay out this amount to the winning bettor.
The payout will be Winnings (liabiliy )+ Stake
If this sounds confusing, check out this nifty calculator Betfair provided to help you calculate different outcomes on a lay bet. It looks like this:
- Stake: Total player stake you want to buy. This will determine how much you earn if your lay is successful
- Odds: The game odds. This determines your liability (how much you have to pay the backers if they win)
- Commission: A percentage you pay the house (Betfair in this case) if you earn something
- Return: The liability + Final Profit after commission (the amount you don’t lose + the amount you earn)
- Profit: Your total earnings from the entire lay
The screenshot contains outcome for our theoretical bet in a best case scenario with a commission to Betfair of 6%. Note that this is a risky position since my Liability is greater than my potential profit. I am risking more to win less.
A modification would be the same stake but lower odds. Your liability will be lower than the stake. The problem of such a standing is games that offer such an outcome more often than not have a calculated possibility of going in the backer’s way (leaving you at a loss)
In lay betting, your liability is determined by the odds at the time you chose to lay multiplied by the amount you staked. This determined the risk you were willing to buy on that game.
Settling the bet
Betting exchanges typically handle the settlement of bets automatically. If you lose a lay bet, the exchange deducts the necessary amount from your account balance and transfers it to the winning bettor’s account.
Account balance adjustment
After the bet is settled, your account balance will reflect the loss incurred from the lay bet. It’s important to manage your betting bankroll effectively to ensure that you can cover potential losses from lay bets.
Losing a lay bet can result in financial losses, so it’s essential to carefully consider your betting strategy, assess the risk involved, and manage your bankroll responsibly when engaging in lay betting on sports exchanges.
What is a back to lay
A back to lay strategy is a betting technique commonly used in horse racing, football, and other sports betting markets. It involves initially backing an outcome (placing a bet on it to happen) and then laying the same outcome (betting against it) at shorter odds to guarantee a profit or minimize losses.
Here’s how a back-to-lay strategy works:
Backing a selection
Initially, you back a selection that you believe has a good chance of winning. You place a bet on this outcome at relatively long odds.
Monitoring the event
As the event progresses, if your backed selection performs well and its odds decrease (shorten), its likelihood of winning increases according to the market sentiment.
Laying the selection
Once the odds of your backed selection have shortened significantly, you then place a lay bet on the same selection, essentially betting against it at shorter odds. This lay bet acts as a hedge against your original back bet.
If your backed selection wins, you profit from your initial back bet.
If your backed selection doesn’t win, you lose your stake from the back bet but gain from the lay bet, effectively reducing your losses.
Profit or loss
The goal of a back-to-lay betting strategy is to make a profit by exploiting changes in odds as an event progresses. By laying at shorter odds, you aim to offset potential losses from your initial back bet or even secure a profit regardless of the outcome.
Example in numbers:-
Suppose you back a horse at 10.0 for £10 before the race. If the horse’s price drops to 5.0 during the race, you can lay the same horse for £20 at 5.0. This way, you will have a balanced book, meaning you will win the same amount of money no matter what happens. If the horse wins, you will win £90 from your back bet and lose £80 from your lay bet, resulting in a net profit of £10. If the horse loses, you will lose £10 from your back bet and win £20 from your lay bet, resulting in the same net profit of £10.
This strategy requires careful timing and monitoring of the betting markets to capitalize on favorable shifts in odds. It’s popular among experienced bettors who seek to mitigate risks and maximize returns in dynamic betting environments, such as those provided by betting exchanges.
Other strategies on how to use back and lay together
Remember, using back and lay betting together, often referred to as “trading” or “matched betting,” can be a sophisticated strategy to minimize risk and maximize potential profits. Here are some effective strategies for combining back and lay betting:
Look for situations where the odds offered by bookmakers and betting exchanges differ significantly, allowing you to place a back bet with the bookmaker and a lay bet on the exchange for a guaranteed profit, regardless of the outcome. Arbitrage betting strategy exploits pricing discrepancies in the market.
Scalping involves quickly placing back and lay bets on the same outcome to profit from small price movements. This strategy requires closely monitoring the odds on both the bookmaker and exchange platforms and executing trades swiftly to capitalize on short-term fluctuations.
Dutching involves backing multiple outcomes in the same market to ensure a profit regardless of which outcome occurs. By calculating the appropriate stakes for each selection based on their odds, you can spread your risk and guarantee a profit if any backed outcomes win.
Trading the drift and steaming
Monitor market movements to identify selections whose odds are significantly drifting (lengthening) or steaming (shortening). Backing selections that are steaming and laying selections that are drifting can allow you to profit from these price movements as market sentiment changes.
Lay betting systems
Lay betting systems are betting strategies that involve betting against an outcome to happen, rather than for it. You can use lay betting systems on various sports and events, such as horse racing, football, cricket, tennis, and more. Here are some of the lay betting systems:-
Laying the favorite
This system involves placing a lay bet on a selection that is a theoretical favorite, i.e. which has the lowest odds of winning. You need to find the right selection by looking at various factors, such as form, fitness, track, weather, etc. The idea is to identify a favorite that is overrated or overpriced by the market, and bet against it.
Lay the field
Lay the field system is mostly appropriate in horse racing and is based on placing at least two lay bets at odds no greater than 2.0. You will make a profit if both bets are matched – that’s it – two matched lay bets in one race on two horses. The idea is to find a race where there are many potential winners, and the odds are likely to fluctuate during the race.
Lay the draw
This system is one of the most popular in football betting. It involves placing a lay bet on the draw before the match, and then backing the draw at a higher price during the match. The idea is to profit from a goal being scored, which will increase the odds of the draw. You can also use this system to trade on other markets, such as over/under goals, correct score, etc.
How does back and lay betting compare to other common types of betting
Back and lay betting on exchanges offers unique advantages such as flexibility, control over odds, and opportunities for trading and hedging compared to traditional forms of betting with bookmakers. However, each type of betting has its own appeal and suitability depending on individual preferences and betting strategies.
Lay betting vs. traditional betting
- In traditional betting, you place bets with a bookmaker who offers fixed odds on various outcomes.
- You can only back outcomes to happen, and the bookmaker sets the odds for each selection.
- There is no option to lay bets or act as the bookmaker, limiting the flexibility and opportunities for profit compared to betting exchanges.
Lay betting vs. Asian handicap
While both lay betting and Asian handicap betting offer ways to approach betting, they cater to different preferences and strategies. Lay betting provides flexibility and opportunities for trading on betting exchanges, while Asian handicap betting offers balanced odds and risk management options in traditional bookmaker markets.
Here are the comparisons
- Market Structure: Lay betting operates in a peer-to-peer environment, while bookmakers offer Asian handicap betting in a traditional betting format.
- Risk Exposure: Lay betting exposes bettors to potentially higher liabilities, as losses can exceed the initial stake. Asian handicap betting limits potential losses to the stake amount.
- Flexibility: Lay betting offers greater flexibility in setting odds and adjusting positions during an event, making it suitable for trading and hedging strategies. Asian handicap betting provides flexibility in choosing handicap options to manage risk and enhance value.
Pros and cons of Back and Lay betting
Back and lay betting offers different advantages and disadvantages, depending on your betting goals, risk tolerance, and market understanding. Here are the pros and cons of each:
- Simple to understand: Back betting is straightforward and similar to traditional betting with bookmakers. You bet on an outcome to happen.
- Potential for high returns: If your backed selection wins, you can potentially earn significant profits, especially if you correctly predict outcomes at high odds.
- Range of markets: Back betting is available across various sports and events, providing a wide range of options for bettors.
- Limited control over odds: You have to accept the odds available at the time of placing your bet, which may not always offer the best value.
- Risk of loss: If your backed selection doesn’t win, you lose your stake, and there’s no opportunity to mitigate losses during the event.
- No opportunity for hedging: Back betting doesn’t allow for hedging or adjusting your position during the event, which can limit your ability to manage risk.
- Act as the bookmaker: Lay betting allows you to act as the bookmaker, offering opportunities to profit by betting against outcomes you believe are less likely to occur.
- Opportunity to hedge bets: You can hedge your positions by laying against outcomes you previously backed, enabling you to minimize losses or lock in profits during the event.
- Flexibility with odds: You can set your own odds when laying a bet, giving you more control and potentially better value compared to back betting.
- Higher liability: In lay betting, your potential losses can exceed your initial stake, depending on the odds at which you laid the bet. This higher liability can pose greater risk.
- Complexity for beginners: Lay betting can be more complex for beginners to grasp, particularly understanding how liabilities and potential losses are calculated.
- Market volatility: Betting exchanges can experience rapid changes in odds, making it challenging to predict and manage your positions effectively during live events.
Overall, both back and lay betting have their advantages and drawbacks. It’s essential to consider your betting objectives, risk tolerance, and market knowledge when deciding which approach to use in different situations. Some bettors may prefer the simplicity of back betting, while others may leverage the flexibility and hedging opportunities offered by lay betting.