Lesson 5: What Are Lay Odds?

This is the key concept to grasp!

In the context of UK betting exchanges, "lay odds" refer to the odds at which users offer to bet against a particular outcome. Unlike traditional betting, where you bet on something to happen (backing), laying a bet means betting on something not to happen. Betting exchanges, such as Betfair, Betdaq, or Smarkets, facilitate this unique approach.

When you lay a bet, you essentially become the bookmaker. Instead of backing a team to win, for instance, you are betting that the team will not win. In this scenario, your potential profit is the amount someone else is willing to stake on the team winning. Lay odds are crucial because they determine the amount you're willing to risk for someone else's potential payout.

Let's break down lay odds with a practical example:

Suppose in a football match, the back odds for Team A to win are 3.0 (2/1 in fractional odds). This means that if you back Team A with a £10 stake, you stand to win £20 (including your stake) if Team A wins.

On the flip side, the lay odds for Team A winning might be 3.2. If you decide to lay Team A with a £10 stake at odds of 3.2, you are risking £22 (including your liability) if Team A wins. Your liability is essentially the potential payout you'd have to cover if the person backing Team A wins their bet.

So, in summary, lay odds represent the price at which you're willing to accept bets against a specific outcome. They are determined by the supply and demand dynamics on the betting exchange, where users set their own odds and stakes. Understanding lay odds is fundamental for users looking to engage in matched betting or trading on betting exchanges, as it allows them to both back and lay bets, creating opportunities to profit regardless of the event's outcome. Head to the next lesson for an actual example!

Come back to this! It’s a concept that takes time to grasp. For reference the blue selections on the image are ‘lay odds’.