Betting Exchange involves betting against an individual rather than using a bookmaker. Onlines sites will link you together with somebody wanting the opposite result in a bet. This means you get better odds as you are betting against other punters not against a traditional bookmaker.

Because you are betting against someone else you do not need to pick a winning horse/team, you could pick a loser. You can offer odds to others against an outcome. Therefore you can bet whether an outcome will happen or will not happen. When you take Odds you 'back' the outcome and when you offer Odds you 'lay' the outcome. When you back an outcome, you want that outcome to happen. Laying an outcome is the opposite of backing it: it is betting that an outcome will NOT happen. This is what bookmakers traditionally do. Matched and unmatched bets

Matched bets are those that have been matched via a website to another customer's request. A matched bet is a bet that has been joined between a backer and a layer. For example in Odds Betting, you want to back Manchester City at Odds of 3.0, and someone else is prepared to bet against Manchester City for the same Odds for at least the amount you want. Once a bet has been matched, it cannot be cancelled.

Unmatched bets are the bet requests no one is currently prepared to match, therefore you have not been joined with an appropriate counterpart. Unmatched bets can be cancelled at any time. Of course, the more competitive your Odds or Price the more likely it is to be matched.

Backing a bet

Backing is the usual type of bet that is placed with traditional bookmakers, where the bookmakers set odds for the customer to take. If the bet is correct the winning customer’s returns are calculated as the total of the backer’s stake multiplied by the bet odds.

Laying a bet

To lay a selection is to bet that it will not win. Laying is the role that bookmakers have traditional carried out when they offer odds on the likelihood of a selection winning an event.

Betting exchange websites allow their users to lay bets, giving them more choice in every betting event. In the past, if a punter wanted to bet that a football match would not end as a draw they would have to back both teams to win. On a betting exchange websites a punter only needs to select the odds and stake to lay the draw.

Laying is the opposite of backing and therefore the monies required to lay a bet are different to the stakes used for backing. To offer odds a you must have enough available funds to cover the maximum payout or liability for that bet. If a layed selection does not win the layer receives the backers stake. If the layed selection wins the layer pays out the total of the backer’s stake multiplied by the relevent odds.

Line Betting

Line Betting is an even-money (Odds: 2.0) bet on the total number of runs, goals, points or shots scored or played in any sporting event. The 'Line' refers to a line of numbers representing all possible results. In order to bet, you either 'Buy' or 'Sell' the Line at one particular 'Price', depending on whether you believe the final result will be above, or below, this Price. The final result will always be an integer.

For the mathematically minded, the best way to think of a bet which is priced between an integer and half-value is as two separate bets split proportionally between these prices. Therefore a bet for £100 at 47.75 is equivalent to one bet for £50 at 47.5 and another for £50 at 48. So, if the result is 48, the first bet 'wins' and the second bet 'stands'; the net profit is £50. Likewise, a bet for £100 at 47.9 is equivalent to one bet for £20 at 47.5 and another for £80 at 48 etc.

In general, Line Betting can be thought of as 'handicapping', with the Price of the Line being set (by you) such that the final result is equally likely (at that moment in time) to be either above or below this Price. Because these two outcomes are both equally likely, the Odds on each are even-money.

On betting exchange websites you are able to take 'both sides of the market' and either Sell the Line or Buy the Line. And you can either match the Price already indicated.

In summary, Sell the Line when you want the result to be LESS than the Price you sell it, and Buy and Line when you want the result to be MORE than the Price you buy it.

Range Betting

Range betting (whilst it amounts to a series of fixed odds bets) has the overall effect of being a bet on either the total number of runs, goals, points or shots scored or played in an event, or the performance within an event constructed around a pre-determined 'points index'. The effect of fixed odds range betting is to provide profit or loss equal to the difference between the level you strike your bet at and the final result, or 'make up', multiplied by your stake. Your 'stake' is defined as the amount in £ per unit (run, point or goal etc) that you nominate when placing the bet.

You should 'buy' at a price when you think the make up will be greater than the level you buy, and conversely, you should 'sell' when you believe the make up will be lower that the level you sell at. On exchange betting websites you can either buy or sell at the prices indicated on the betting screen.

All Betfair range betting markets always have a maximum and minimum make up. If the actual make up falls outside these limits, then the maximum or minimum number is used, as appropriate, to calculate the profit or loss. This ensures that your total profit or loss is always capped.