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Tomas

3.2. Lay

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Laying will probably be a new concept for you. However, this feature introduced by the betting exchange makes it an incredibly powerful tool for those who know how to use it. In the previous chapter, we explained that the betting exchange model combines two very different disciplines, namely betting & financial / stock exchange. We also explained that Backing is both placing a traditional bet and also selling a commodity at a price. It’s therefore logical that Laying is the exact opposite of Backing.

Again, this term is explained from two points of view:

The word Lay is the general name for an action taken on a betting exchange, and is derived from the following concepts:

  • Bet against something to win (from betting)

  • Buying a commodity (from the financial exchange)

3.2.1. Bet Against Something To Win

Each bet is a trade between two counterparties – one party wants an outcome to happen (Back) and the other wants the outcome not to happen (Lay). When you place a bet with a traditional bookmaker, you’re the Backer and the bookmaker is the Layer:

  • Bettor – Places a bet on a result he thinks will happen and wants to win (Backer)

  • Sportsbook – Advertises a price for the event outcome, accepts the bet from the bettor, and pays out if successful (Layer)

Both the bettor and bookmaker have made a bet with each other – they did a trade. The Sportsbook has taken the Lay side of this trade, and accepts the bet at the lowest price possible. The lower the price the bookmaker manages to agree with the bettor, the less money it will have to pay if the bettor wins.

3.2.2. Buying a Commodity

The basic rule of business is to sell something for more than you paid for it. As such, the idea is to buy low and sell high when trading. If successful, you will make a profit. As we said in the previous paragraph, you should Lay low to earn as much as possible. From the perspective of trading and financial exchanges, this means that Lay is the term for buying a commodity.

3.2.3. Goodbye bookmaker!

In the days before betting exchanges, Laying was a privilege only for bookmakers. So other than bets between friends, no one other than a licensed bookmaker could be on the Lay side of a bet / trade. Betting exchanges have changed the game, so being a Layer now is as simple as being a Backer. In effect, a betting exchange works like betting between friends on a global scale. Bringing together Backers and Layers. As such, the bookmaker is excluded from the betting process. Counterparties on the betting exchange are as follows:

  • Punter (Backer) – One who wants the result of the bet to happen. The Layer will pay his/her winnings.

  • Punter (Layer) – One who thinks the opposite and wants to collect the Backers stake.

Let’s say you think Labyrinth will not win the race, or in other words, any other horse will win the race. In this case, you place a Lay bet:

5a9593c928274_laybetbetfairwebsite.png.f6ceb10df33c4f9e8d98d0414d283c71.png

Remember – Lay is always pink

In the picture above you can see what will happen if Labyrinth wins. You’ll lose £82 because you’ll have to pay the profit of the Backer who was your counterparty in this trade. However, if the Backer was not right and Labyrinth doesn’t win, you’ll earn £100. In essence, it’s the bet of a Backer who lost his/her bet on Labyrinth.

3.2.4. Better Price

Asking for a better price works exactly the same as with Back. You only ask for a lower price in the dialogue window at Betfair and wait for the bet to be matched. Asking for a better price is a great strategy when you think the price will go down (where it matches your bet) and then up again (where you cash out for profit).

 

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