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3 comments

Comment from: Oliver Sudden [Visitor] Email
I was reading Dick Francis's new book Under Orders last night and he explained the concept of lay a horse ( or bet a horse to lose ). The reason I mention this is because I didn't understand this and asked you about it previously.
2006-10-05 @ 18:44
Okay, sorry Oliver I thought I had done that but obviously I wasn't clear enough. A lay is essentially the other side to a back - as you say it is actually saying that what you are betting on will lose. It's what bookies do all the time, only they generally lay the book, ie every "runner" in the event. So when you place a bet with a bookie, they are simply laying your bet.

With the advent of person-to-person betting exchanges, which effectively means Betfair these days, you can be your own bookie (although you will struggle because of much tighter margins and the commission that is charged). Or you can back and lay the same runner, for instance to "lock in" a quick profit.

So, for example (and ignoring commision), say I had backed favourite K J Choi before the Chrysler Classic started for $10 (pounds, euros, whatever) at a price of 22 (effectively 21 when you take the stake away). I could now lay him at the overnight price of 15 (effective 14) for the princely sum of $14.67.

If it wins that would be $210 (21x$10) minus $205.38 (14x$14.67)
for a PROFIT of $4.62

If it loses it would be the amount I layed $14.67 minus the stake I lost $10
for a PROFIT of $4.67

So you win either way!

Is that any clearer?
2006-10-06 @ 04:30
Comment from: Anthony Urquhart [Visitor] Email
Oliver, the following link offers an excellent online tutorial about exchange trading:

http://www.betangel.com/tutorials/01-Introduction_to_trading/01-Introduction_to_trading.html

2006-10-09 @ 18:20

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