Betfair Exchange Market
4 - Placing a bet
Imagine you are trying to sell your computer and suddenly someone offers you a bid below your expectations. You decide to reject the bid and propose another value you consider reasonable.
A Betting Exchange works exactly the same way. If you don't like the odds available you can ask for better ones as long as someone else accepts the deal.
Every wagered bets at a betting exchange have to be matched with opposite bets to be valid. Thus, users with opposite opinions on an outcome are paired, as long as they agree on the betting odds and the amount to bet.
Taking our previous example, if the costumer considers that the price offered by the owner is too high, he will place a bid below the price settled by the owner. In case the owner accepts the costumer's offer, a deal is made and the computer is sold.
Now consider an example describing how Betfair's Exchange Market works on the image below. There are three possible results for the football match: Brazil to win, England to win or a Tie. Blue boxes on the left represent the best odds to Back a result, and Pink boxes on the right shows us the best odds to Lay a result.
For instance, if you want to Back England you have to choose the blue box next to it (as that is the best current odd for that outcome). Odds are displayed on the top of each box, and the respective maximum stake value is displayed below them. In this case, the odd is 3.65 and the maximum stake value is 115€.
That is to say, if you wanted to wager an amount up to 114€ on England, the odds for that bet would be 3.65. On the other hand, if you wanted to wager, say 150€, a 115€ stake would be accepted with an odd of 3.65 and the rest of the money would be held on the market until another user matched the rest of your stake. When that happens, you have your bet completely matched and accepted.