What do all the numbers mean?
Once you open any Betfair market on your computer screen, you will see prices for Backing and Laying the current position but what can they possibly mean? Is 1.01 better than 1.02? Why do we get 1000 all of a sudden? And why are the back and lay numbers very close in some markets and far apart in others?
Let's start with the last question. How close the back and lay numbers are only depends on the willingness of people wanting to back and lay to get their bets to be matched. Let's say we want to back team A at 1.35 but the best back offer is 1.32. When we open a back position at 1.35, the screen shows our bet as a lay bet at 1.35 for someone to buy (lay). If someone else comes while our bet is open and wants to back team A at 1.34 when the best possible back price currently on offer is still 1.32, he/she can open a new bet offering to lay at 1.34 (making him back at 1.34 if someone accepts these odds). This lay price of 1.34 would move in front of our unmatched 1.37 price as it is a better price than ours. This shows that every bet is both a back bet and a lay bet.
Similarly, if you were to take a lay bet at 1.4 on the screen that would mean somebody else is backing at 1.4 because he/she is not happy with the currently available best back price.
The 1000 odds usually are for results that are extremely unlikely or not possible such as backing a 0-0 score when the score is already 1-0. The opener of the bet is trying to entice others to take it. The 1000 odds are the best possible back odds and sometimes the aim is to fool all the bots that may be active in the market by offering them what seems to be the best possible price. You may see a horse's back price drifting from 1 to 3, then 5, followed by 30 and suddenly by 1000 meaning there is no longer any hope of that horse coming in. Similarly, a soccer bet may offer back odds of 1000 for the losing team if that team is 4-0 behind and only a few seconds are left in the game. The lay odds in a similar situation may be 1.01 if you can find anyone opening a relevant bet at all.
A back odd of 1.01 would mean you would make a profit of EUR 0.01 for every euro you invest. However, if you lose, you would lose all your investment. If you win the 0.01, there would also still be the 5% Betfair charge on your profits (this can decrease according to your volume) and the 20% Betfair charge if your profits are above a certain amount over time. Of course you also need to take into account any costs incurred while transferring any money to and from Betfair, if applicable.
A lay odd of 20 would mean you would pay back EUR 20 for every euro you invest if that selection goes on to win and that you would make a profit of the same amount as your investment if that selection loses. You can easily see that you may have a long series of wins when you are laying selections but the downside is that losses can be devastating, especially if they come two or three in a row as is bound to happen over time. Even horses starting at lay odds of over 100 have been known to win races. If you think about it, odds of 20 or so mean that horse will win 1 in 20 races so it would not be that uncommon for such a horse to win a race over time.
Similarly, you will see thousands of Euros change hands towards the end of a game at low rates such as 1.01. Many punters see this 1% profit as "easy money" but don't forget there is always room for surprises and one surprise in 100 matches would be enough to take away all the previous profits from 99 games.
© Psychoff 2009
