Sports Trading is backing and laying the same horse or team with the idea of securing a risk free profit regardless of whether that horse or team goes on to win or not. By backing and laying at different prices the trader can lock in a profit which can be realized before the race or game has even started or no matter who goes on to win.
This means that you are no longer limited to picking the winner like you were in the dark old days of gambling at the bookies. Betting exchange trading has completely changed how people bet and more and more people are realizing that it is now possible to make consistent profits from trading the numbers, even if you don’t know anything about the underlying instrument on which you are trading.
Of course, trading on Betfair is not only limited to horse racing or trading before the event starts. Skillful race readers and sports fans can make good profits from trading on the race or game while it is In Play as Betfair markets stay open until the first horse crosses the line or the final whistle is blown.
For instance, a trader might Back a soccer team that is playing well and then Lay the same team just after they score a goal at a much lower price to guarantee a profit on the game regardless of whether that team goes on to win the game or not. Or you might Lay a tennis player that looks weak and then Back him after his serve is broken at a much higher price to guarantee a profit on the game no matter which player ends up winning.
In Play Trading on Betfair is different from trading because it refers to trading the price of a horse or team while the race or match is actually running or playing. In Play prices are much more volatile than prices are before the race starts because they are directly affected by each horse or team/player's performance during the race.
In Play traders watch the race or match unfolding and Lay and Back accordingly, trying to lock in profits by correctly reading what is happenning in the race or match.
Betfair’s In Play markets allow skillful race readers to profit from Laying a tiring favourite midway through the race, or Backing a tennis player who gets off to a good start. Never before have gamblers had so many opportunities to make money in so many different ways from sporting events that until recently had a very limited number of betting products available on them.
Hedging on Betfair is the cherry on top of the ability to trade price movements.
Hedging allows traders to lock in an equal profit regardless of whether the horse or team that they were trading on wins or not, allowing you to completely remove the outcome of the race or match from the equation.
For instance, in the example above, Trading on Betfair, the trader Backs £150 @ 5.4 and Lays £150 @ 5.0, giving him a profit of £60 if the horse (Pottes Lady Jane) wins and no loss if any of the other horse's win. That’s great if the horse wins, but if it loses then you still haven’t made any money, despite having made a profitable trade.
Hedging your £60 profit will make sure that you make the same profit whether the horse wins or loses. You can do this pressing the Hedge button on BetTrader which will divide your profit by the available to Lay price and will then Lay the result of that calculation to give you an equal profit whichever horse wins the race. In this case we have made £12 what ever the outcome of the race. (There is still 2 minutes until the race starts).