Have you ever seen a winning bet suddenly turn into a loser because of a late goal? Then you may have wished that there was a way you could take some profits before the final whistle. Well the advent of betting exchanges made it possible to trade ‘in-play’, and therefore lock in profits if the market moved in your favour. Now however, Betfair have gone one step further and simplified the process to just a couple of clicks. Read on to find out about their ‘Cash Out’ option.
The concept of ‘cashing out’ only became a reality when the betting exchanges, such as Betfair, arrived in the betting industry. The exchanges made it possible to ‘trade’ on a position (or bet), as opposed to the more binary traditional bet. This meant that if the prices moved in favour of the punter, there would be an opportunity to ‘lay’, or bet against, the same outcome at a lower price, therefore guaranteeing a profit. Here is an example;
A theoretical £20 bet is struck on Manchester United at evens. So the backer hopes to win £20. In our scenario, all is going well with the bet, and with half an hour to go, United lead by 2-0. Our bettor however is getting nervous, United have been sloppy for the last 10 minutes and our man wants to lock in some profits.
The in-play market now has United as short as 1.25 (1/4) to go on and win the game. In order to take some profits the backer now wants to become a ‘layer’ at this smaller price. He lays United at 1.25 to win £20, which means a liability, or potential loss on this new bet, of £5. So;
If United win. He wins the original bet of £20, plus stake, but loses the second ‘Lay’ bet, which costs £5 – For a net profit of £15.
If United stumble, and fail to win, then he loses the original bet of £20, but the second ‘Lay’ bet “wins”, so he receives the backers stake of £20 – Net result £0 won/lost.
So the second half trade has ensured he cannot lose. Obviously he could amend the second bet to ensure a profit either way; If for example he laid £40 at 1.25, the liability would total £10, eating into more of the £20 potential winnings, but at the same time, he guarantees £20 profit if United slip up. (The original £20 would be lost, but the £40 lay pays out, for a net £20 profit). So a United win means £10 profit, if they fail to win, he nets £20 profit. Some commission will normally apply but the above illustrates the theory of ‘cashing out’.
If that entire explanation was far too complicated to even contemplate applying during a live event where things are changing all the time, fear not. Betfair have moved to simplify the entire process by adding a ‘cash out’ button on many of their major markets.
This feature removes all of the complication, but it should be noted, it also removes some of the flexibility. One click will present the user with a confirmation screen which has calculated the best prices to trade at in order to lock in the most profit there and then. These calculations however, are based on taking the maximum amount of profit regardless of the outcome – this, after all, is what the majority of the users want. There may also be occasions however, where the backer simply wants to ensure the bet is effectively “no lose”, so their initial stake is covered, but the remainder is left “to ride”. In order to do this, the user will need to make the necessary adjustments. Either way, to cash out, the bettor simply needs to confirm the figures shown, and he has ‘closed’ his position and locked in any profit.
The facility is most useful when the market has moved in favour of the bettor, but it can still be used if a bet has turned sour. The cash out function can still be applied to cover the ‘losing’ outcomes so that any loses are mitigated. While this is obviously an admission of defeat by the bettor, it is still a useful tool and a prudent user might be able to extricate themselves from a bet they no longer feel offers value.
The cash out function is extremely helpful and Betfair are to be commended for introducing this new innovation. The strength of the exchanges, is the fact that they do allow this sort of ‘trading’ and in making this easier for punters, Betfair have certainly opened up the option for many bettors who may otherwise have been too intimidated to try and take profits manually.