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Author: Chris
Latest update:March 16, 2024

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This betting exchange guide shows how to use an exchange. Learn about decimal odds, back bets, lay bets, and liquidity.

Exchanges and bookmakers

Traditionally, a bookmaker (layer) accepts a bet from a customer (backer).

Betting exchanges are different. They are a website for customers to back and lay bets between each other.

How does an exchange make money? They charge a percentage commission from the winning backer or layer in a betting market.

Exchanges have changed the betting industry. Customers can find value odds and act like a bookmaker themselves to lay bets.

Betting exchanges

The UK market features four main betting exchanges: Betdaq, Betfair, Matchbook, and Smarkets.

Each has its own strengths. Betfair offer the widest range of markets. Smarkets are innovators, and Matchbook is strong on American sports.

How does an exchange work?

Decimal odds: A traditional bookmaker displays odds as fractions like 7/2. These odds do not include the backer’s stake. But, a betting exchange shows odds in decimal format, which includes the backer’s stake.

To convert fractional odds to decimal odds, take the first figure and divide by the second figure, then add 1.

To convert 7/2 to decimal odds:

  • a). 7 divided by 2 is 3.5,
  • b). Plus 1,
  • c). Equals 4.50.

See Ace Odds guide to calculating fractional and decimal odds.

Backing and laying

There are two sides to every bet:

  • a). Betting for an outcome is backing.
  • b). Betting against an outcome is laying.

This is the Match Odds market at Betfair for Barcelona versus Inter.

Betting exchange guide 1

The blue column shows the back odds.

The pink column is the lay odds.

We have two opposing viewpoints in the betting market – the backer and the layer.

The backer: thinks Barcelona will win. So, they place a back bet on Barcelona, hoping that a lay bettor will match their bet.

The layer: thinks Barcelona will not win, so they place a lay bet on Barcelona.

The two opposing views mean the bet gets matched between the backer and the layer. The possible outcomes are:

  • If Barcelona win: the backer wins and the layer has to pay the backer the winnings.
  • If Barcelona do not win: the layer keeps the back bet stake.

Or, a customer may back Inter to win at 6.2. Higher odds mean the backer stands to win more from the back bet (potential profit). While the layer stands to lose more (potential liability).

Conversely, when laying at lower lay odds, the layer stands to lose less (the liability).

How to place a lay bet

The image below shows the Match Odds market for Slavia Prague versus Dortmund.

Backers and layers are betting against each other on who will win the match.

There is £1345 available to lay on Dortmund at odds of 2.06 (and £1081 at 2.08, £665 at 2.1 and so on). This is liquidity.

Slavia Prague v. Dortmund - betting exchange Match Odds market

Click on the pink box to lay Dortmund at 2.06.

Dortmund will appear in your betting slip.

Confirm bet Dortmund Betfair Exchange

Enter a £10.00 lay stake, clickPlace Bets” and finally “Confirm“. 

You stand to lose £10.60 if Dortmund win. This is your liability.

You have layed Dortmund in the Match Odds market. This is a bet against Dortmund to win.

The possible outcomes are as follows:

  • If Dortmund win: the layer would pay £10.60 winnings to the backer.
  • If Dortmund do not win: the layer would keep the backers £10 stake (minus commission of 5% equals £9.50). The exchange charges a small commission on the winning lay bet.

Liability and liquidity

Backing £10 on Slavia Prague to beat Dortmund at 3/1 (4.0) gives a £30 potential profit. When lay betting, the layer needs to risk £30 liability to make £10 profit.

Liquidity is the amount of money available to back and lay in a market. High profile events (Grand National, Wimbledon tennis) have lots of liquidity. Less popular markets (non league football) have lower liquidity.

Before placing a matched bet, check the lay odds in the exchange market. You need enough liquidity to match your bet.


Betting exchanges are a key part of matched betting. Backing (“buy a bet”) with a bookie and laying (“sell a bet”) at an exchange lets you cover your position in a betting market. This is a popular no risk matched betting technique.

This guide has explained back and lay bets, exchange odds, and liquidity at a betting exchange.

That wraps up this betting exchange guide. Look out for more matched betting guides here at