Betfair revolutionised the online betting world in the year 2000, completely changing the way people can place a bet. With Betfair trading there is no bookmaker involved. People bet against other people (anonymously) with differing opinions. As there is no agent (the bookmaker) involved who needs to make a regular profit margin per market, Betfair enables customers to enjoy consistently better odds than any other online bookmaker. With over 3 million clients worldwide and a turnover of £5m a week, Betfair is the biggest betting company in the UK.
Betfair is what is known as a betting exchange. Betting exchanges are unique as they allow you to play the role of the bookmaker as well as of the punter. On Betfair you can actually place a bet on something you think will not win. Betting on something not to win is called laying. Please allow us to explain how Betfair works :-
Backing is what you do when you think something will win. You place money on a selection and in order to make a profit it has to win. This is the traditional way of betting which most people are accustomed to. You can do this at Betfair in exactly the same way as you can at any other bookmaker. For instance you back a horse for £20 at the odds of 5/2 and the horse wins. You receive your stake (£20) back and your profit (£50) making your total return £70.
Laying is what you do when you think something will not win. You place money on a selection and in order to make a profit it has to lose. You are doing the reverse of backing. This is the unique part of Betfair. For instance you lay a horse at the odds of 5/2. You decide you want to make a profit of £20. At the odds of 5/2 you will have to stake £50 to win £20. As long as the horse doesn’t win you receive your stake (£50) back and your profit (£20) back, making your total return £70.
Having the ability to trade is the single biggest attraction of Betfair. When people think of traders, they probably think of stockbrokers in the city buying and selling stocks and shares with the aim of making a profit. This is exactly what you can do in the comfort of your own home when you use Betfair trading.
The basic aim of trading is to take a financial position in a certain market and gain a profit by selling your position when something beneficial to you has occurred. A simple example of this is:-
You place a bet on Chelsea to beat Liverpool at 1.7. After 15 minutes of the match Chelsea score to make it 1-0. As a result of this Chelsea are a much shorter price to win the game. Their price to win is now 1.22. As you backed them at a much bigger price you are now able to trade your position to lock in a profit and remove your financial liability.
There are many ways to trade your position on Betfair and thousands of people are making large sums of cash by doing so. Most traders will keep their individual technique a secret but if you have a good knowledge of your chosen sport there is no reason why you cannot develop your own technique and make very good profits.