What is a Betting Exchange?
A betting exchange is a site that acts as a brokerage between different punters. Bets are matched and placed by punters on all sorts of sporting events.
 
Generally, if you make a winning bet a small commission is charged by the exchange to pay for the service. If you make a losing bet then no commission is charged.
 
Another feature of betting exchanges is that they offer "in-running" betting on plenty of games, especially if they have wide television coverage.
 
Betting Exchanges will offer all manners of fixed odds and asian handicap bets, but at present that have not found a way to allow accumulators or combo betting.

Advantages of Betting Exchange?
The most striking advantage of an exchange is that you can bet 'for' (back) or 'against' (lay) in a betting event. When you bet against or 'lay' you are offering odds for someone else to take or 'back' - and in effect you are the bookmaker. Another big advantage is that there are no maximum limits as such, you are only governed by your own funds and the liquidity of the relevant market.
 
The betting exchanges generally operate to around a 101 per cent book on most high-profile events, which compares very favourably to a typical 105-110 per cent overround when comparing the best prices on fixed-odds firms on most football matches.
 
The back/lay prices on a particular event are determined by punters themselves - punters can attempt to place a bet at any price they wish so the balance is effectively created by supply and demand.

Last few words...
The exchanges offer terrific advantages to gamblers, who can now hedge bets easily and also make more money through arbitrage. To be able to “hedge” positions mean to benefit or suffer from swings in the market even before a match kicks off.
 
If a punter places a bet on Liverpool at 1.85 and the price moves into 1.75, the person can lay off the bet locking in profit.
 
Of course there is a lot of scope of doing this with LIVE games as betting in-running means that the prices change wildly with the scoring of each goal - or a dismissal of a player.

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