Choose the price you mean
An exchange market can expose best available back offers, best available lay offers, last traded price, traded volume and deeper ladder levels. Betfair's getting-started guide explains backing, laying and matching, while its historical data specification defines timestamped best-price, traded-price, volume and market-status fields.
| Candidate benchmark | What it represents | Main limitation |
|---|---|---|
| Best back | Current offer a backer may take | Available only up to displayed size |
| Best lay | Current offer a layer may take | Different payoff and liability |
| Back-lay midpoint | Summary of the spread | May not be executable |
| Last traded | Most recent matched price | Can be stale or tiny |
| Volume-weighted price | Summary of matched trades | Mixes times and market states |
Declare one field and a timestamp rule before comparing it with a model or sportsbook.
Illustrative spread calculation
Suppose best back is 2.40 and best lay is 2.46.
- Back raw implied probability = 1 / 2.40 = 0.41667, or 41.667%.
- Lay raw reciprocal = 1 / 2.46 = 0.40650, or 40.650%.
- Reciprocal spread = 41.667% - 40.650% = 1.017 percentage points.
- Decimal midpoint = (2.40 + 2.46) / 2 = 2.43.
The midpoint is descriptive, not guaranteed executable. A benchmark record should retain both sides and their available sizes.
Include commission in a decision
Exchange commission may be charged on net market winnings and varies by account or market; Betfair's current documentation provides one operator example. For a back bet at 2.40 with 5% illustrative commission on positive winnings, net win profit = (2.40 - 1) * (1 - 0.05) = 1.33 units. If p = 0.43, net EV = (0.43 * 1.33) - (0.57 * 1) = 0.0019 units.
Ignoring commission would give EV = (0.43 * 1.40) - (0.57 * 1) = 0.032 units. The cost changes the interpretation materially.
Exchanges are not uniformly the best forecast
A multi-sport study found exchange-derived probabilities were not always the most accurate source, especially in smaller markets, and that conversion method mattered (Štrumbelj, 2014). Treat an exchange as a named market benchmark that must be validated for the relevant sport, market, liquidity and timestamp.
Minimum benchmark record
- Market and selection IDs.
- Regulation or settlement definition.
- Published and retrieval timestamps.
- Best back and lay prices and sizes.
- Last traded price and its time, if used.
- In-play, suspended and complete flags.
- Commission assumption and account basis.
- Method for multi-outcome normalization.
Diagnose a thin exchange market
Suppose best back is 2.40 for only £3, best lay is 2.60 for £4, and the last trade at 2.42 was several hours earlier. A midpoint would conceal a wide spread, tiny executable size, and stale trade. Record the market as thin rather than converting 2.50 into a precise consensus probability.
Betfair's historical feed specification separates best available levels, last traded price, traded volume, published time, and market status. Use those fields to define minimum freshness and depth requirements before analysis. If the requirements fail, retain the row with a quality flag and exclude it under a rule fixed before outcomes are inspected.
Continue learning
- Next guide: Using Pinnacle as a Reference Price
- Related guide: Using xG in Value Betting
Assumptions and limitations
The prices and 5% commission are illustrative. Actual commission and access vary. An exchange quote does not remove model uncertainty or guarantee execution. The exchange odds guide covers mechanics; this page owns probability-benchmark construction.
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