Exchange – Basic trading, advanced back-to-lay and lay-to-back betting

The concept of trading is usually associated with the stock market, where the idea is to “Buy low, sell high”. Thanks to placing back and lay bets on the same event at different prices, the Exchange is similar. The difference with trading on sports is that the goal is to buy (back) high and sell (lay) low.

Here’s an example:

You place a $10 back bet on a football team at odds 4.0. You’ll win $30 if they win and lose $10 if they don’t. The game starts, and your team score. Their odds then shorten to 2.0. You then place a lay bet for $20 on that same team at the shorter price of 2.0. You now have two scenarios:

1. If your team doesn’t win the match because they draw or lose, you still win $10 overall.
   • To calculate this, add a $10 loss on the 1st bet to a $20 win on the 2nd bet. $20 - $10 = $10 profit.
2. Even better, you still win $10 if they do win!
   • Calculated by taking the $30 win from the first bet win and subtracting the $20 loss from the second bet. $30 - $20 = $10 profit.

Once you’ve locked in a profit, you can either relax, knowing you’ll win regardless of the result, or continue to trade to try and win more.

One of the Exchange’s most significant advantages is allowing you to lock in a guaranteed profit in a market. Or, at least creating a position where you don’t lose on any outcome, known as a green book.

What is a green book?

A break-even or winning position shows in green when betting on the Exchange while losing positions appear red.

So that’s the ‘green’ part of it, while your position on a market is known as ‘your book’. Build a winning position on a sporting market, and you have a green book.

To get into such a desirable position on the Exchange, you must lay bets at shorter odds than you’ve backed them or back at higher odds than the original lays. Two ways to achieve this are ‘back-to-lay’ and ‘lay-to-back’. With back-to-lay trading, you back first at higher odds to then lay at lower odds. A lay-to-back strategy is the opposite. You lay low first to then back high later.

The two-runner market

Two-runner markets are found in sports such as tennis, basketball, or snooker. Essentially, any event between two teams or competitors where a draw can’t happen.

Here’s an example:

Let’s say there’s a tennis match between Nadal and Djokovic. The odds for Nadal are at 3.0 and Djokovic at 1.5. And let’s say you backed Nadal at 3.0 for $10. The match then goes to the final set, and Nadal breaks serve. His odds drop to 1.5.

Your first option now is to lay off your Nadal position for $10 (at odds of 1.5 that $10 bet will only cause $5 liability), meaning you’ll be on track to win $15 if Nadal wins while now having no liability on Djokovic. In other words, you can’t lose even if the Serbian comes back to win!

The other choice is to lay off more than $10. So, for example, if you now layed Nadal at 1.5 for $15, you’d be laying off more than your original $10 stake, which would give you a ‘green book’ of +$12.50 on Nadal and +$5 on Djokovic. This is because you successfully layed Nadal for more money and lower odds than what you backed him for.

You could achieve an identical outcome by backing Djokovic again at the new, more favorable odds.

The three (or more) runner market

A football match has three possible outcomes, win, lose or draw. You can also trade these results to secure a green book. A simple example is when you’ve bet on a draw at a high price when a team is losing a match.

Later, they equalize, and the odds on the draw shortens as the remaining time drops. With ten minutes to go, the draw price is much shorter than your original bet, so you lay off your position (bet on the draw NOT to happen). You’ll now be guaranteed a profit or break even whatever the result.

The simplest way of trading your book is to do the opposite of what you did initially but at favorable prices.

You could also trade by laying the draw at the start, then laying the team that scores the first goal. If team two equalizes, you could then also lay team two. It all depends on the odds you initially bet on and what you can lay at.

Remember that you’re adding money to the other bets when you lay an outcome. You can see how placing a new lay bet will affect your open bets on the Exchange screen.

How to minimize losses

As well as locking in a profit, trading allows you to minimize your losses when a match or event isn’t going your way.

Using a similar example to before, you place a $10 bet on a football team at 2.0, meaning you’ll win $10 if they win and lose $10 if they don’t win. But they soon have a player sent off while playing badly, and their price drifts to 3.0.

You now don’t fancy their chances and would like to minimize any losses, so you lay them at 3.0 for $5. This means you’ll lose $5, whatever the result. While this may not be the best outcome, it’s preferable to losing your entire stake.

An ideal trade will allow you to create a ‘green book,’ a bet where every outcome is a winner.

You can also set up a loss limit, one of our Responsible Gaming tools, to help you manage your money while enjoying our games.

Let Cash Out do the work.

You can trade manually by choosing your odds, entering your stake, and placing the bets yourself to give the desired result.

Don’t worry if you don’t want to calculate the stakes and place the bets yourself. You can use the Cash Out function instead. This will automatically place the opposing bet for you when you exit your trade. You can even use partial Cash Out, which lets you choose how much or little you want to trade out from your position.

Is Exchange available in my area?

To confirm if PokerStars Exchange is available in your location, select 'Sports' above and check if the Exchange tab is visible.