Betfair is a betting exchange. A betting exchange is where traders can place bets against other traders. It is not a traditional bookmaker.
On a betting exchange traders can bet on a player winning. They can also bet against the player winning. This is called a lay bet.
Each player has a price that moves up or down depending on what is happening in the match. This is similar to the stock exchange except that rather than the price changing in response to hundreds of different world events the exchange price moves simply in response to what is happening on court.
By anticipating how the match will progress and therefore how the price will move it is possible to place bets at different prices that result in the trader having profit on both players. A common aim is to have no potential loss regardless of the outcome of the match.
Often the trader will leave themselves with a “free bet” which means they win or lose nothing if one player wins and make a profit if the other player wins.
The main difference between trading and betting is that in betting you make your selection of which player you think will win and leave the bet to run until the match is over. In trading we can change or manage our trades during the match.
Once the trader is experienced in managing trades during the match, trading is much less risky than traditional straight betting.