Advice

Fixed Stake Or Fixed Liability Laying

(Last Updated On: October 5, 2012)

When we look at laying horses we have the option to place our bets to a fixed stake or a fixed liability. What is the difference between these two types of staking and is there a benefit to using one or the other?

These are questions that I’m going to answer in todays article. First of all I want to make sure that the process of laying is clear as it can be somewhat confusing. Laying was brought into existence for the normal punter with the advent of betting exchanges. A layer is somebody who offers odds an event. Traditionally this would be only available through bookmakers who offer you odds on an event and take the risk of having to pay you out should the event end in your favour.

Betfair changed the face of betting by creating a market that allowed the normal punter to offer odds on an event, thereby effectively betting on an event to finish unfavourably for the person who is placing the bet with them.

In horse racing, when you lay a horse then you are betting that the horse won’t win the race (or place if you are doing it in the place market). However the odds you are offering (when you take them on Betfair) are what you are prepared to risk that the selection won’t win. For example if you take odds of 5.00 (4/1) to lay on a horse for £1 then if this horse goes on to win, you will have to pay out £4. The punter who matched your 5.00 odds bet £1 at odds of 5.00 so if the horse wins they will be expecting you to pay them out £4 plus their £1 stake back. If the horse loses then you take their £1 stake as your profit.

This is how laying works. You take over the part of the bookmaker and so you have to pay out when the horse wins.

So what is fixed liability and fixed staking?

Let’s begin with fixed staking because it is the simplest of the two forms. Fixed staking means that when you bet you place the amount you want to take should the horse lose. For example, if you laid £50 on a runner then if the horse lost you would get a £50 return (minus Betfair’s commission). However you are going to be liable for a lot more than £50 if the horse should win. If the horse wins at odds of 5.00 then you are going to be liable to pay out £50 x 4 or £200 as this is what the punter who has taken your offer of 5.00 odds would expect to be paid if the horse wins.

This means that using fixed staking for laying means you need to bet a much smaller fraction of your bankroll than you may be used to. It is common to bet no more than 0.5% of your bankroll on each selection when using this type of staking. If you are laying at higher odds then you may want to reduce this to 0.1% of your bankroll. Don’t be fooled by the small figures. If you want to make a profit from betting then money management is absolutely crucial. There is no point in betting bigger stakes and risking your entire bankroll, you should be building slowly but surely.

Using fixed liability staking is the alternative method of lay betting. This is actually a preference for a lot of people because if you bet £10 then this is the maximum you can lose on the selection. Using fixed liability you won’t make your stake in profit though. Using our example of odds of 5.00 then if you were to bet £10 at fixed liability, if the horse lost then your profit would be £2.50. This is because if the horse won you would be paying at 4 times the stake, 5.00 is 4/1, which would be £10 and the maximum liability you wanted to risk.

This method allows you to set you maximum risk which makes it a much better way for new layers to bet. You can set your maximum liability to 1% or 2% of your bankroll and place your bets.

In fact, laying to maximum liability has shown to not only reduce the overall risk but it does not reduce the bankroll growth by any serious amount. The only major problem is that you have to be able to bet to a minimum stake of £2 on Betfair. This means that if you have a maximum liability of £10 and you lay at odds of 11.00 (10/1) then your actual stake would only be £1. A £1 would require you to pay out £10 should the horse win the race. In other words you would not be able to place this bet unless your maximum liability was £20.

You can work out the bankroll you would need by determining the maximum odds you are prepared to lay at and the percentage of your bankroll you would be prepared to risk. If you are going to lay up to odds of 5.00 (4/1) and you only want to risk 1% of your bankroll, then…

  • The minimum stake on Betfair is £2.
  • £2 at odds of 5.00 is a risk of £8 maximum per bet.
  • If £8 is 1% of your bankroll then your bankroll needs to be £800.

You can use this method to calculate the minimum bankroll that you need in order to be able to lay bet to fixed liability.

Michael Wilding

Michael started the Race Advisor in 2009 to help bettors become long-term profitable. After writing hundreds of articles I started to build software that contained my personal ratings. The Race Advisor has more factors for UK horse racing than any other site, and we pride ourselves on creating tools and strategies that are unique, and allow you to make a long-term profit without the need for tipsters. You can also check out my personal blog or my personal Instagram account.

13 Comments

  1. Hi there
    Very informative but I would just like to point out that you can lay on Betfair to any odds for a fixed amount if you take their starting price.
    Roy

  2. On the fixed liability side of things I feel it can encourage one to be happy to take on longer priced horses. Say there was what you felt was a true 30/1 shot trading at 20/1. 20 times stake feels a big risk if working to a fixed stake accepted. If it wins losing just your normal stake on a fixed liability approach is mentally less taxing. Yes £ win for such a horse will be small but 1000 such horses are better laid than walked away from.

    Out of interest I got a decent free spreadsheet from Dave Renham of racingtrends last year that is useful in comparing returns on a bank for fixed liability and fixed stake laying.
    Well it is useful if you have a set of past lay results you want to analyse and finda good staking approach for.
    Not sure if he still has it or not but worth asking about if you are into such stuff.

    1. Well said Dom. Dave may well still have that spreadsheet, I will find out if he is prepared to share it with RA readers.

  3. I regularly use fixed liability for laying.

    If I am using a new system which I want to
    test or a system with odds bigger than 11.00
    I use a Bot.

    This allows me to stake below the £2

  4. Hi,
    New to laying, i have been told that the best way to lay, is to lay 3 or 4 horsese in a race, so you make a book.
    Before i start, do i have the correct idea.
    EG if 3 horses laid total liabillity £200.00 but have £250 in pot. As bookmakers work, profit gross of £50.00 less costs to betfair.

    Please advise befor i start.

    Dave

    1. Unfortunately it’s not quite that simple Dave. Bookmakers work because they are laying every single runner in the race and there is something called an over-round. This means as a backer the book adds up to about 120%, of course there is only a 100% chance of a horse winning so the bookmaker takes the other 20% of the book. If you are laying just three runners then it doesn’t work like this because you are not actually creating a full book. If you lay 3 horse for a liability of £200 then if none of them win you will make the amount you staked (not liability) minus betfair commission.

  5. A small point re minimum lay stakes.

    Whereas the min STAKE for BACK bets is £2 , the min LIABILITY for LAY bets at BSP is £10.

    If laying a 20/1 chance to £10 BSP you would win approx 50p – no need for a bot. Even laying one at 1000 you would win 1p – less commission of course :o)

  6. Is mixing the methods a good idea. Let’s say any lay above 2.0 use a fixed stake and any odds on (under 2.0) use a fixed liability for a better return?

    1. You are unlikely to see a better bankroll growth doing this. However this can certainly be done but you need to be aware of which bet is which in your records so you can record your lay return on investment properly.

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