Hedging Calculators

Analysis & How It Works

In betting exchanges, the primary terms are Back and Lay:

• Back: This means you are betting for an outcome to happen.
  Example: "Backing Team A to win." This is the classic bet you would place at a regular bookmaker.

• Lay: This means you are betting for an outcome not to happen.
  Example: "Laying Team A to win" (meaning you are betting they will either lose or draw). In practice, you are acting as the "bookmaker" for another bettor.

Example with Numbers (Hedging)

• Back Stake: €100
• Back Price: 2.50
• Lay Price: 1.90
• Lay Commission: 3%

1️⃣ The Initial Bet (Back Bet):

You bet €100 on an outcome at 2.50 odds.
- If you win, your profit is: €100 × (2.50 - 1) = +€150.
- If you lose, your loss is: -€100.

2️⃣ The Hedging Bet (Lay Bet):

To cover your risk, you must place a Lay bet. The calculator determines the ideal amount:
Lay Stake = (€100 × 2.50) / 1.90 ≈ €131.58.

3️⃣ The Potential Outcomes (before commission):

• If the Back bet wins:
  Profit from Back: +€150.00
  Loss from Lay (Liability): -€118.42 (calculated as €131.58 × (1.90 - 1))
  Gross Profit ≈ +€31.58
• If the Lay bet wins:
  Loss from Back: -€100.00
  Profit from Lay: +€131.58
  Gross Profit ≈ +€31.58

4️⃣ The Final Profit (after commission):

The 3% commission is applied to the gross profit (Market Profit):
Commission = €31.58 × 3% ≈ €0.95
Net Guaranteed Profit = €31.58 - €0.95 ≈ €30.63