It sounds like betting nirvana.
Sitting back watching a race, or the last quarter of the footy, or the last few overs of the cricket… knowing that no matter what the result, you’re going to win.
Of course, backing both sides of a market – or every horse in a race – at the same time doesn’t work in a mathematical sense. That’s hopefully one of the first lessons most punters learn!
Trading the prices
Where it can work however, is when prices move.
Let’s go with a very basic example. An upcoming footy game has one side paying $1.77, and the other $2.05.
Now obviously, you can back both sides as much as you like: you can’t lock in a profit at those prices.
But what about when the money comes and the prices move?
Let’s say, for example, you initially backed the outsider at the $2.05 opening quote.
A mountain of money comes for them over the next few days which almost reverses the prices: your team is now is into $1.80, with the former favourite’s blown out to $2.02.
You’re now free to back the other team, and you’ve got both at above even money: no matter the outcome of the game, you’ve made a profit. Too easy!
Of course, that theoretical example is extremely unlikely to play out, chiefly because bookmakers (most of the time) put a lot of work into their opening markets and don’t get them that far wrong.
Where something like that is much more likely to occur is during a match. In-play markets can fluctuate wildly during a game. A single moment or short run of dominance can vastly impact one team’s changes and see their odds move hugely: think a goal (or even two in quick succession) in soccer, or a batting collapse that sees a cricket team lose a number of wickets in just a couple of overs.
This is where the traders operate. Their goal is not so much to predict the ultimate outcome of a match, but to predict which way the market will move. That way they can “lock in” a guaranteed financial outcome no matter what the result.
Bookmakers will obviously despise this behaviour: where a punter locks in a profit, they’ve locked in a loss! So once again, this is where Betfair comes in.
Betfair actively promote a whole host of third-party programs and apps that make quick trading a whole lot simpler than if you’re doing it on the website. You can check them out here.
The problem in Australia? In-play online sports betting is illegal. Which means, unless you’re operating on an overseas computer (via a VPN or similar), you won’t be able to get on.
Turning our attention to racing, there are clear opportunities to effectively trade a market and lock in a profit on Betfair.
Racing odds can fluctuate heavily and quickly, especially during the lead-up to the race as money comes flying in thick and fast. This gives you the opportunity to create a “no-lose” situation.
Where Betfair assists hugely with this is the ability to lay horses – that is, bet on them not winning. If you only had the opportunity to back horses, you’ll be attempting to monitor the prices of every runner as it fluctuates. That’s unrealistic.
But with one back bet (betting to win) and one lay bet (betting to lose) on Betfair, if you’ve read the market accurately, you’ll have scalped the race market and created a guaranteed profit for yourself.
The key, which is clear once you do the maths, is to back at a higher price than you lay.
For example, the runner in question may currently be paying $4.10. Back that with $100, and you’ll have a profit of $310 (collect of $410) should the horse win. Should it not win, you lose your $100.
If you can then lay that horse at a lower price than $4.10 – we’ll say $3.50 for example – you’ll create the “no-lose” situation. Lay $120 on that: if it loses, you’ll collect your $120. If it wins, you pay out $300.
Now add your bets together:
Horse wins: $310 profit (back bet) + $300 loss (lay bet) = $10 profit (less commission)
Horse loses: $100 loss (back bet) + $120 profit (lay bet) = $20 profit (less commission)
That’s a very simple example, but how it works in a basic sense. The bigger the gap between your back and lay prices, the more profit you can lock in. Go ahead, play around with it.
That concludes our series on the introduction to Betfair. Hopefully you’ve learnt a bit about what the product has to offer, and when you can use it to your advantage.
For further information, the Betfair Hub is a great source of help, betting articles and discussion.
Of course, we’re also available for a chat at any time!
Part 1: Betfair: the basics
Part 2: Betfair: the matching process
Part 3: Betfair: how to lay