Use one exposure basis
For each position, calculate the maximum cash loss across its settlement states. Then aggregate positions by event and shared outcome. A displayed stake alone can understate risk for lay and multi-part products.
| Bet type | Primary exposure field | Important extra states |
|---|---|---|
| Fixed-odds back | Accepted stake | Void, push, partial win or loss |
| Exchange lay | Liability | Commission on net market winnings |
| Each-way | Total win stake plus place stake | Dead heat, non-runner, place terms |
| Quarter handicap | Total stake split across adjacent lines | Half win, half loss, push |
| Accumulator | Ticket stake | Void legs, dependence, return caps |
| Cash-out position | Original maximum loss and executed cash-out | Partial cash-out and residual position |
Lay liability example
For lay odds 4.00 and lay stake GBP 10:
Liability = (4.00 - 1) * GBP 10 = GBP 30
In this illustrative lay example, GBP 10 is the amount won before commission if the laid selection loses; GBP 30 is the maximum loss if it wins. Stake comparisons should use the GBP 30 liability.
Each-way and split-line examples
An each-way instruction of GBP 5 each way normally creates GBP 10 total stake: GBP 5 win plus GBP 5 place. Place fractions, place counts, dead heats, and non-runner rules control settlement.
A GBP 20 Asian handicap quarter-line stake is commonly split into GBP 10 on each adjacent half-line. Settlement can produce a full win, half win, push component, half loss, or full loss depending on the score and line.
Rules remain product-specific
DraftKings' market rules and Betfair's soccer rules are current first-party examples. They do not establish universal treatment across operators or jurisdictions. Store the rule URL or receipt version that applied when the bet was accepted.
Portfolio aggregation
Sum maximum loss for positions that can lose together. For mutually exclusive positions, calculate scenario-level loss rather than automatically summing every liability. For dependent positions, identify the shared driver and report the worst reasonable scenario.
Expected value is calculated from every payoff state and its probability; OpenStax provides the weighted-outcome principle. Do not force a split product into a binary win/loss shortcut.
Build a payoff-state matrix
For every product that is not a simple binary back bet, list all settlement states and the net cash result in each. Quarter lines need full win, half win, push, half loss, and full loss; each-way bets need win and place components; lay positions need the selected outcome and all alternatives. Verify that state probabilities sum to one under the model.
Use the matrix to calculate expected value, variance, and maximum loss. Then combine matrices for positions that can settle on the same event. This is safer than assigning a generic “two units” label to products with different liabilities. Preserve the operator rule version beside the matrix so a settlement change can be traced rather than corrected manually.
Next step
Use Lay Bet for the next part of this topic.
Continue learning
- Next guide: Stop-Loss Betting Rules
- Related guide: The 1% Betting Rule
Assumptions and limitations
Examples omit commission, taxes, currency conversion, premium charges, dead-heat reductions, and account-specific limits. Product names and settlement rules can change. This page standardizes exposure reporting; it does not recommend opening accounts or taking any position.
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