To the novice punter, a betting exchange can look overwhelming but to the value-conscious punter, they are manna from heaven. Why?

Better prices - because the bookmaker is taken out of the equation, you are not subject to their 5, 10, 20 or even 50% margins. No overheads to support, no employees to pay, you are betting directly against other punters and their opinions.

As a result, you end up with prices that average 20% better than bookies. This is especially true on markets with more selections - racing, football premierships, golf tournaments etc, where bookies traditionally make their 'bread and butter'.

Winners don't get banned or cut back- many online bookies will limit your stakes or close your account if you “dare” to beat them. It doesn't matter to an exchange, they only bring punters together, not take the risk themselves!

Betting in-play - with so many sports shown live on TV these days, why not bet in-play? Unsure about the team line-ups, what the tactics will be, or the state of the pitch? Then try watching the game for a while before placing a bet.

The ability to trade - ever backed a golfer at big odds who's then in contention coming into the final round, but you'd prefer to bet some of it back and walk away with a guaranteed profit? Now you can lay selections as well, so you could choose to recover your stake to leave you with a 'bet to nothing' (a bet where you break even on your worst outcome), or hedge your position to give you a profit no matter what the outcome.

The ability to oppose a selection - ever thought Roger Federer was way too short to win an Event, but couldn't decide who was going to win the tournament? Problem solved - by laying Federer, you would effectively be backing the field to beat him. So much easier to cheer the whole field!

In a series of columns, we will look at some of these options in depth. Firstly, we will start with the basics of trading with an exchange.

Once you've signed up with Betfair, the first thing you should do is 'test' the system, via the play for fun site (Play Betfair). Sign up and place a few bets with play money – notice how your potential profit and risk is always shown on screen. It is very easy as a new player to make the mistake of backing instead of laying and vice-versa. Now take a look at placing an offer on the screen, in the form of an unmatched bet. To do this, you will need to start using real money, but there’s no need to bet more than the minimum wager (£2) until you’re confident.

Find a market with little or no liquidity so you can have your own fun. It might be a horse race at an obscure venue tomorrow, or a Swedish bandy match or similar. Post some offers to back and lay selections. Note how an unmatched 'back' offer appears on the 'lay' side of the market screen (for someone else to match your bet), and how the reverse applies when you place a 'lay' offer. For every fixed-odds bet that is struck, with an exchange or a bookmaker, there has to be both a backer and a layer.

Now vary the price and see how it changes on the screen. This is very important for when you are betting in-play or just before a race starts, when prices are quite volatile. Note that there are 'safety' screens before placing a bet, so you can be sure of what you are doing. Once you are confident you know what you are doing, you can bypass those screens by unticking the 'verify bets' box on the My Bets tab.

Everyone, whether a professional punter or complete novice, will make a mistake with backing and laying at some point. Get it out of your system when you’re playing for fun and not with your hard earned!


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