Betting exchanges are different to regular bookies for a few reasons:
1. You bet against other people instead of against the bookie
2. You can ‘lay’ bets on an exchange, meaning you bet against an outcome
3. You can set your own odds
4. You pay a small commission based on how much you win.
When you bet a lay bet on an exchange, there’s a few things you should remember. First of all, if you bet $100, it doesn’t necessarily mean you will lose $100 if your bet loses when you lay. If you lay a 1.10 odds team at $100 you will only lose $10 if your bet loses, but you’ll win $100 if your bet wins. If you lay a team at 10.0 odds you would be paying out $100 if that 5–1 outsider wins.
This is because when you lay a bet you’re basically taking on the role of being the bookie and accepting someone else’s 5.0 odds bet. In the case of a horse race for example, if you lay 1 horse, then your bet wins if any other horse crosses the line first. So if you are planning on using betting exchanges, my advice is to start with smaller bets until you get the hang of things.
There are a few top betting exchanges most people use, namely Betfair (they’re the biggest but they charge high commissions at 5–7.5% of your wins and also have extra premium charges on top). Then there are several other good alternatives that a lot of people are starting to switch to. I myself use a combination of Betfair and WBX.com and it’s essential if you are planning to trade live, that you have at least 2–3 exchanges you use so that you’re not left exposed if one of them goes down halfway through a match. Betfair minimum stake is £5 and WBX is $1 so I’d suggest you learn the ropes there until you know what you’re doing.
Here is a link I found that explains betting exchanges in more detail:
http://www.sportsbettingtips.org/for-dummies/betting-exchanges-explained/
Here are links to the two exchanges mentioned above so you can check them out: www.betfair.com & www.wbx.com