Odds betting is the most common form of betting in the world and involves predicting whether an outcome will happen or not. You place your bet at particular ‘Odds’ which relate directly to the percentage probability that the outcome will happen.
The lower the Odds, the more likely it is that the outcome will occur.
The outcome with the lowest Odds is often known as the ‘favourite’. Traditionally, the Odds betting market happens one-way only, with bookmakers always ‘offering’ Odds and users always ‘taking Odds’.
Betfair allows users to both take Odds and to offer Odds. Therefore you can bet whether an outcome will happen or will not happen. When you take Odds you ‘back’ the outcome and when you offer Odds you ‘lay’ the outcome. All Betfair Odds are ‘Decimal Odds’.
When you back an outcome, you want that outcome to happen. For example, if you back Henman at Odds of 3.1 for ?100, you want Henman to win. Your total return if he wins, is ?310 (including your stake), and your maximum loss is ?100 (your stake).
Laying an outcome is the opposite of backing it: it is betting that an outcome will NOT happen.
This is what bookmakers traditionally do.
For example, if you lay Derby County at Odds of 4.0 for ?100, you think it is sufficiently unlikely that Derby will win that you offer Traditional Odds of 3/1 against it. Your total return, if Derby lose or draw, is ?100 (i.e. the stake), and your maximum loss is ?300 (which is what you would have to pay out). In effect you are accepting other people’s bets who want Derby to win.
Odds markets can have one winner or multiple winners depending on the detail of the market. Betfair offers ‘place’ markets on most horse races for example. The number of possible ‘winners’ on a market is always detailed on the ‘market info’ tab.