Unlike in fixed odds bookmaking, where you deal with a bookmaker, in exchange betting you bet directly against other punters. This generally gives you better odds as there is no bookmaker profit in the odds, but raises two key problems – liquidity and house commission.
Betting Exchanges charge a commission percentage
Just like a bookmaker has to make a profit, so do betting exchanges, and they take this in the form of a slim commission from each winning bet (usually between one and five percent), which you have to factor into whatever price you are being offered. The odds can look better on the surface, but in each case you have to factor in the commission price to your end profit – something you never have to do with a bookmaker.
Exchange Liquidity is King
The second key problem – liquidity – arises from the simple fact that you are betting against other punters, many of whom are not looking to make large bets. Many of the best prices on exchanges (particularly for more obscure events), will often only have only a very small amount of money available at the best price, with the larger money only available at much worse odds, which again can be deceptive if you are trying to analyse the best price in a market for a big bet.
Be price sensitive when betting exchange wagering
Unlike when dealing with a bookmaker, on betting exchanges it is critical that you factor in not only the price offered and the relevant commission(s), but also how much money is available for you to bet against at that price.