An exchange fixed odds bet is an agreement between two or more parties in which the one who has made an incorrect prediction on an outcome, forfeits a pre-defined amount of money. The odds of a bet represent the implied probability of an outcome occurring, the lower the odds; the more likely it is the perception the outcome will occur. The outcome with the lowest odds is often known as the 'favourite'.

Betfair's Exchange Games allow users to both take odds and to offer odds. You can therefore bet whether an outcome will or will not happen. When you take odds, you back the outcome and when you offer odds, you lay the outcome. This section explains how to place bets on Belfair's Exchange Games.

For each selection in the market the odds to bet for (back, blue colour) or bet against (lay, pink colour) are displayed.

The current best odds available are shown on the coloured buttons in the centre columns. The second and third best are shown in adjacent buttons. This is called 'market depth'.

The stake money that you see available in the market view at each odds increment can be a combination of one or more different users' unmatched bets. When you match a bet you will always be matched with the first bet that was placed at those particular odds i.e. first come first served. You can bet all or part of the total stake amount shown. If the required stake is not available at the best odds, you can adjust your odds to the second- or third-best and place the full stake amount. The system will always match the stake available at the best odds first and then the stake at the 2nd best odds and so on down to the minimum odds acceptable to you.

When you back an outcome, you're betting that the outcome will happen. Your total return if your prediction is correct is your stake multiplied by the odds (the winnings includes your stake), if you are wrong, you lose your stake. The best available odds to back a selection appear in the blue centre column. In the image below the best available odds to back the top selection is 2.36. You can also ask for better odds, or more money than currently available. In either case your bet will appear on the Lay side of the market.

Laying an outcome is the opposite of backing it: it is betting that an outcome will NOT happen. This is what bookmakers traditionally do. You offer the odds and if you are wrong you have to pay out the backer's stake multiplied by the odds you offered. If your prediction was correct you keep the backer's stake. The Lay side of the market shows the money and odds requested by backers. To accommodate a backer, click a button in the pink Lay centre column.

Placed back bets appears on the lay side of the market and placed lay bets on the back side. Betfair then matches back and lay bets where the same odds is requested by a backer and offered but someone laying the same selection. This is the fundamental principle of the betting exchange.

All Odds quoted on Betfair are 'Decimal' Odds. Decimal Odds differ from the Odds traditionally quoted in the UK in that they include your stake money as part of your total return. If you place a bet of £10 at Decimal Odds of 4.0 and win, then your total return (including stake) is £40. In the UK this would be quoted as 3/1, returning to you winnings of £30 plus your original stake of £10.

Decimal Odds relate more closely to probability: in a race with four equally-matched horses, the probability of each horse winning is 25%. Each horse will have Traditional Odds of 3/1 or Decimal Odds of 4.0. Hence, the probability of an outcome equals 1 divided by its Decimal Odds (1 / 4.0 = 25%).

Decimal odds express your total return for the stake you place. Therefore, even money is expressed as 2.0 - you get back your initial stake plus the same again as winnings - twice your initial stake. Decimal odds are converted to traditional odds by subtracting 1.

My Bets is a bet management component that lets you place bets and view your matched bets and edit any unmatched bets.

When you click a 'Bet for' or 'Against' button in the market, your selection name will then appear in the My Bets' Place Bets section. Now enter your stake amount and odds and submit your bet.

All Betfair bets must be placed at 'acceptable' Odds increments. For example, if you would like to leave an order on the system, you can only change the current Odds by the increment, or multiple of the increment, shown below.

Odds above 1000 are not allowed.

The minimum stake depends on your account currency. The maximum stake is determined by your available account balance only.

Liability is the maximum amount that you stand to lose on a given bet. For a back bet, the liability is your stake. For a lay bet, the liability is the stake * (odds - 1). Payout is the amount you can win on a given bet.

To submit your bet click the 'Place bets' button. If you have the Confirm Bets option selected the next screen you see will be a restatement of your bet details. If you are happy with your bet selection press the yes button to submit your bet. If you submit a bet, but another user takes the available stake money first, your bet will still be placed in the market at the odds and stake you entered, but it will be listed in the 'Unmatched Bets' section of the My Bets component.

Best execution is the process by which Betfair will match a user's bet at better odds than asked for, when available. This normally occurs in two ways (a) the best odds may be only offered at a small stake while the second best odds are at a much larger stake. A user may enter the required odds as the second best, which has the effect of matching the small bet at the better odds and the large bet at the second best odds. This process has the added advantage of somewhat protecting users from entering totally erroneous prices; (b) where a user has entered a bet but, before it is confirmed, better odds become available. A user will always get the best odds available at the time of matching.

An unmatched bet is a bet that you are trying to place but it has not been matched by someone else yet. Unmatched bets are listed in the My Bets panel in the 'Unmatched Bets' section. If your bet is still unmatched when the betting round is over, the unmatched part of the stake will be returned to account.

To edit an unmatched bet, change your requested odds or stake to values that are likely to get matched and click on the Place Bet(s) button.

You can cancel any of your outstanding bets that have not yet been matched. Any bet that has not yet been matched can be cancelled simply by ticking the orange x-button. Unmatched bets are automatically deleted when the round ends.

If you're making changes to unmatched bets, but decide not to submit these changes, reset will return your bets to their existing state. The button does not affect matched bets in any way.

A matched bet is a bet that has been accepted by another user, and you will either profit or lose on the outcome. Please note that once a bet is matched it cannot be cancelled.

A bet can be partially matched, which means that some of it is matched, and you stand to profit or lose on that part, and some of it is unmatched. The matched part will show up under Matched Bets in the My Bets panel, and the unmatched part will show up under Unmatched Bets. You can edit the unmatched bet to try and get it matched.

If you don't want to view your matched bets, you can collapse this section by clicking on the header bar. Hiding Matched Bets can improve the performance of My Bets for users who have large numbers of matched bets.

Profit and loss is displayed in the market view for each selection when you have bets on the market. This figure indicates how much you will profit if the selection wins and how big you loss will be if the selection doesn't win. Potential profit is displayed in green and a potential loss in red.

If you already have a bet placed on the selection and are preparing another bet on the same selection, the system will display what your potential profit and loss will be if your new bet gets matched.

A total profit and loss figure is also displayed in a popup at the end of each game. This figure is the total profit or loss you made based on all bets that got matched during the game.