Value betting masterclass · Module 2: Finding the best price · Lesson 8 of 25 · About 6 min
For UK bettors, Betfair Exchange prices are the nearest thing to a fair-odds yardstick. On an exchange you bet against other people rather than a bookmaker, so in a busy market the prices sit very close to the real chance, with hardly any margin built in.
This guide shows you how to read back and lay prices, work out the midpoint and account for commission. It also explains when the exchange is less trustworthy, and finishes with a worked example.
Read the transcript
On a betting exchange, prices are set by other bettors rather than a bookmaker. That makes them a useful guide to the fair price.
Every selection has two prices. The back price, where you bet that something will happen, and the lay price, where you bet that it won't.
In a busy market, the point halfway between them is a good estimate of the fair odds. With two point two to back and two point two four to lay, the midpoint is two point two two. That's about a forty-five per cent chance.
Now suppose a bookmaker offers two point three. That's about three point six per cent above the fair price. Backing on the exchange, once five per cent commission comes off, effectively gets you only two point one four. So here the bookmaker's price is the better bet.
Keep an eye on how much money is waiting, though. In thin markets the gap gets wide, and the midpoint is a much weaker guide. Use the midpoint as your fair price, compare it with the bookmakers, and please bet responsibly.
Key points
- The back price is the odds you can bet at. The lay price is the odds you can bet against at.
- In a busy market, the midpoint between them is a good estimate of fair odds.
- Commission comes off net winnings, so the price you actually get on the exchange is a bit lower.
- Quiet markets have wide gaps and make weak benchmarks.
Why the exchange makes a good benchmark
A bookmaker sets its own odds and adds a margin on top. An exchange simply matches people who disagree: one backs an outcome and another lays it. That is why the gap between the back and lay price in a big market is often tiny.
Outside the UK, many value bettors use Pinnacle as their sharp benchmark. Pinnacle left the UK in 2014 and withdrew its licence application in 2018, so UK customers can’t use it, and the Betfair Exchange became the standard UK reference instead. Our sharp bookmakers (Lesson 7 out of 25 in the Masterclass) guide covers the other options.
Reading back and lay prices
Every outcome shows two columns of prices. The blue column is the back price, the best odds available to bet on it happening. The pink column is the lay price, the best odds available to bet on it not happening.
The lay price is always slightly higher than the back price. A side might be 3.40 to back and 3.50 to lay, and the market’s view of the true price sits somewhere between the two.
Working out the midpoint
For a single fair estimate, take the midpoint of the back and lay prices. With 3.40 and 3.50 the midpoint is 3.45, which points to a fair chance of 1 ÷ 3.45 = 29.0%.
Strictly speaking, it is more accurate to average the two implied chances than the two prices. Here 29.41% and 28.57% average 28.99%, which is still 3.45, so with a tight spread both methods agree. When the spread is wide, averaging the chances is the safer way.
If you would rather start from a bookmaker’s odds, our fair odds (Lesson 3 out of 25 in the Masterclass) guide shows how to strip out the margin instead. The calculator below lets you check either method.
Fair odds and margin calculator
Liquidity: when exchange prices are less reliable
Liquidity is the amount of money waiting to be matched. A Premier League match can have a great deal of it, which keeps the prices sharp, while a lower-league game or a niche market may have very little.
Quiet markets bring three problems. The gap between back and lay widens: 4.00 to back and 4.80 to lay could mean anything from 20.8% to 25%. One bettor can push the price around on their own. And prices can be slow to react to news such as a late team change. In those markets, use the midpoint as a rough guide only and check how much money is available at each price.
Prices are also usually sharpest near kick-off. Early in the week, even a big market can be thinner than it looks. This ties in with closing line value (Lesson 9 out of 25 in the Masterclass), which compares the odds you took with the final price.
Exchange commission
Betfair takes commission on your net winnings in each market. Rates vary, so check Betfair’s current rate before relying on any figure, and read the terms, because some long-term successful customers can face extra charges.
Commission doesn’t affect the midpoint as a guide to the true chance. It does change the price you would actually receive by betting on the exchange. To find that effective price, use 1 + (odds − 1) × (1 − commission rate).
Setting a bookmaker price against the exchange
Ask two questions. Is the bookmaker’s price higher than the fair price? And is it better than the exchange would pay you once commission is taken off?
Worked example
Brentford are 3.40 to back and 3.50 to lay on the Betfair Exchange, and a bookmaker offers 3.70. We use 5% purely as an example commission rate.
- Midpoint: 3.45, a fair chance of about 29.0%.
- Edge at the bookmaker: 3.70 ÷ 3.45 − 1 = 0.072, roughly 7.2%.
- Effective exchange price: 1 + (3.40 − 1) × 0.95 = 3.28.
- The bookmaker’s 3.70 beats what the exchange would pay after commission.
EV check: 0.2899 × 3.70 − 1 = +0.073, about +73p for every £10 staked. That is an average across many bets, not a forecast for this one.
To see what an edge like that means in pounds, read our expected value guide (Lesson 4 out of 25 in the Masterclass). A positive edge never guarantees a profit, and bookmakers are legally allowed to limit accounts for commercial reasons, as our account restrictions (Lesson 22 out of 25 in the Masterclass) page explains.
Related guides
- Fair odds: removing the margin (Lesson 3 out of 25 in the Masterclass)
- Sharp bookmakers (Lesson 7 out of 25 in the Masterclass)
- Odds shopping (Lesson 6 out of 25 in the Masterclass)
- Closing line value (Lesson 9 out of 25 in the Masterclass)
- Value betting explained (Lesson 1 out of 25 in the Masterclass)
Lesson 8 of 25 · Finding the best price
18+ only. Betting should stay fun. Set a budget before you start, only bet what you can comfortably afford, and take a break whenever you need one. For free, confidential support, visit BeGambleAware.org or call the National Gambling Helpline on 0808 8020 133.