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Betfair Glossary: Key Terms Every Trader Must Know
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- Betfair Glossary: Key Terms Every Trader Must Know
- Exchange Betting vs Bookmakers: Which Is Better?
- Betfair Odds Explained: How to Read Price Movements
- Betfair Market Basics: Match Odds & Over/Under
- Betfair Cash-Out: Tips for Effective Use
- Betfair Live Betting: Top In-Play Tips for Beginners
- Betfair Mistakes Beginners Must Avoid
- Betfair Liquidity: What Every Trader Should Know
Glossary of Common Betfair Terms Every Trader Should Know
The Betfair Exchange comes with its own set of terms and jargon that can be confusing for beginners. To navigate the platform successfully, it’s essential to understand the most common phrases and trading terms. This glossary will cover the key terminology you’ll encounter while trading on Betfair, giving you the foundation you need to communicate with other traders and make informed decisions.
1. Back
A bet placed on an outcome to happen. For example, backing a football team to win means you’re betting that the team will win.
2. Lay
A bet placed on an outcome to not happen. When you lay a team to win, you are betting against that team winning. If the team draws or loses, you win the lay bet.
3. Odds
Odds represent the potential payout of a bet. They indicate how much you stand to win for every unit you wager. For example, odds of 2.00 mean that for every 1 unit you bet, you’ll win 1 unit (doubling your stake if successful).
4. Liquidity
The amount of money available in a market for betting. Higher liquidity means there are more participants in the market, making it easier to get your bets matched at competitive odds.
5. Green
A term used when a trader is in profit on a market, indicating a positive return regardless of the final outcome. It refers to “greening up,” where you secure profit no matter what happens.
6. Red
A term indicating a loss on a market. If your position is "in the red," it means you're currently at a loss, but you may still be able to recover or minimize it.
7. Exposure
The total amount of money at risk in your open bets. Managing your exposure is crucial to protect your bankroll from large losses.
8. Commission
The fee Betfair charges on winning bets. Betfair doesn’t take a margin on odds like traditional bookmakers but instead takes a commission on the net winnings from each market.
9. Tick
A small movement in the odds. On Betfair, odds increase or decrease in ticks. For example, if the odds move from 2.00 to 2.02, that’s a movement of one tick.
10. Market
A betting market represents the event you are betting on, such as Match Odds in a football game or Over/Under 2.5 Goals.
Betting Exchange-Specific Terms
11. Trade
A trade occurs when you back and then lay a selection (or vice versa) at different odds. The goal is to lock in a profit regardless of the final outcome.
12. Cash Out
A feature that allows you to exit a bet before the event is over, either to secure a profit or limit a loss. Betfair’s exchange lets you manually cash out by placing an opposing bet (back or lay).
13. WOM (Weight of Money)
WOM is an indicator of market pressure by showing the amount of money available on the back and lay sides. Traders use WOM to predict price movements, looking for where resistance might occur, indicating odds won’t drop or rise past a certain point.
14. Arbitrage
A strategy where a trader takes advantage of price discrepancies between different markets or bookmakers to lock in a guaranteed profit. By backing and laying at different prices, you can ensure a risk-free gain.
15. Tick Offset
A Betfair trading strategy where you place an automatic trade to exit your position a few ticks higher or lower than your entry price, locking in a small profit.
Comparing Terms to Stock Trading
Just like in stock trading, you can be “long” (backing) or “short” (laying) a market. This concept helps beginners understand Betfair trading better, as it’s similar to buying and selling stocks based on price fluctuations.
- Long: In stock trading, this means buying a stock in the expectation its value will rise. In Betfair, this is like backing a team to win.
- Short: In stock trading, this means selling a stock in the expectation its value will drop. On Betfair, this is similar to laying a team to lose.
Advanced Terms to Watch For
16. Dutching
A betting strategy where you back multiple outcomes in a market to cover all possible results, ensuring a profit regardless of which outcome occurs.
17. Green Book
A situation where you’ve hedged your bets across a market and locked in a profit on every possible outcome.
18. Price Gaps
Opportunities that arise when there’s a significant difference between the odds on different sides of a market. Spotting and exploiting these gaps can lead to profitable trades.
19. Stop Loss
A risk management tool that automatically closes a position if the market moves against you by a certain amount. This is especially useful in volatile in-play markets.
Conclusion
Understanding the language of the Betfair Exchange is crucial for both beginners and experienced traders. By familiarizing yourself with these terms, you’ll be able to navigate the platform more effectively, communicate with other traders, and refine your trading strategies.
Use this glossary as a reference point as you continue your trading journey on Betfair. The more familiar you become with these concepts, the better equipped you’ll be to make informed decisions and maximize your trading success.