What is a Betting Exchange - Part 1
by Paul Langham on 2007-09-23
What is Betfair?
Betfair is person to person (P2P) exchange which enables people of opposing opinions to facilitate their desire to gamble on their opinion. As such a P2P exchange does not involve a bookmaker, when you gamble on a betting exchange the person on the other side of your bet is another member of the public who has the opposing point of view to yourself.
Betfair was founded several years ago by an ex stockbroker who merely translated the mechanisms of trading on the stock market to traditional gambling and thereby replaced the necessity for a bookmaker.
How does this work in practice?
Example:
Imagine John fancies ‘Delores Rocket’ to win the Derby and at the same time Peter does not fancy ‘Delores Rocket’, the two obviously have differing opinions. Using a traditional bookmaker, John could back ‘Delores Rocket’ but Peter would be unable to get involved in the race, other than by selecting a different horse.
Use Betfair though and the story is very different.
Betfair, facilitates the matching of the two opposing opinions, it ‘matches’ or ‘facilitates’ opposing opinions and sets up a trade between the two parties..
In practice if you want to trade on Betfair you will need an account and you will need to deposit some money. Don’t worry Betfair is a listed company and highly liquid, your money is safe.
I hope this explains and outlines the basics of the betting exchanges, in the next artcile I will discuss the concepts of backing and laying
Betfair is person to person (P2P) exchange which enables people of opposing opinions to facilitate their desire to gamble on their opinion. As such a P2P exchange does not involve a bookmaker, when you gamble on a betting exchange the person on the other side of your bet is another member of the public who has the opposing point of view to yourself.
Betfair was founded several years ago by an ex stockbroker who merely translated the mechanisms of trading on the stock market to traditional gambling and thereby replaced the necessity for a bookmaker.
How does this work in practice?
Example:
Imagine John fancies ‘Delores Rocket’ to win the Derby and at the same time Peter does not fancy ‘Delores Rocket’, the two obviously have differing opinions. Using a traditional bookmaker, John could back ‘Delores Rocket’ but Peter would be unable to get involved in the race, other than by selecting a different horse.
Use Betfair though and the story is very different.
Betfair, facilitates the matching of the two opposing opinions, it ‘matches’ or ‘facilitates’ opposing opinions and sets up a trade between the two parties..
In practice if you want to trade on Betfair you will need an account and you will need to deposit some money. Don’t worry Betfair is a listed company and highly liquid, your money is safe.
I hope this explains and outlines the basics of the betting exchanges, in the next artcile I will discuss the concepts of backing and laying
About The Author: Paul Langham www.oddson2win.com