tactical trader

Important: the information in this article is not suitable for residents of the USA where online gambling is, at the time of writing, illegal.

Back in the year 2000 the introduction of betting exchanges caused something of a revolution in the betting world. Gamblers no longer needed a traditional bookie to bet on events and ordinary people with an eye for odds could become bookmakers themselves.

In this article I’ll show how using Betfair, one of the first betting exchanges and now the largest with 90% of UK market share, you can bet on an event and play the odds to guarantee a tax free profit regardless of the outcome and without expert knowledge of the underlying event. I’ll also show you how the skills and methods you have learnt when trading can be applied to these new and exciting markets.

What exactly is a betting exchange?

A betting exchange is a primarily web based service that brings people together to bet against each other in what is often referred to as person-to-person (p2p) betting.

Betting exchanges offer a number of advantages over traditional bookies including:

• Better odds
  The odds offered on the exchange are determined by other betters not by a bookmaker, and there are no artificial spreads. If you don’t agree with the current odds on offer, you can ask for better in the hope that somebody else will match your request – you can influence the market.

• Laying
  Betting exchanges introduced the concept of laying which I’ll explain in more detail later in the article. Basically laying allows you to bet against an outcome and for every backer at certain odds their must be a layer.

• No penalty for success
  With a traditional bookmaker too much success would lead to restrictions being placed on the size or frequency of bets. With a betting exchange this does not happen, as the exchange will make money regardless of how often you win. For every better that wins there has to be a better who loses (just like in trading), the betting exchange makes its money by charging a commission on the bet, and in the case of Betfair this commission is only levied on winning bets…