You have probably seen the pitch. Lay the favourite, wait for the price to drift, back it again, bank a tick or two (the smallest steps in the odds) of profit, and never mind whether the horse wins. The race becomes a spreadsheet and you become a trader.
So does it work? The arithmetic is real, but the figures below do not support laying favourites and waiting for a drift as a blanket template. If favourites are priced about right at the off, any trading edge probably has to come from somewhere narrower.
What is Betfair trading in horse racing?
Betfair trading means backing a horse at one price and laying it at a different price (or laying first and backing later) to lock in a profit before the race finishes. Backing is betting on a horse to win. Laying is betting against it, acting as the bookmaker for another customer.
The core rule is back high, lay low. The edge comes from guessing how the price will move, not from picking the winner. That is why it looks easy on paper and feels harder in practice.
What back high, lay low actually means
Say you back a horse to win at 5.0 with £20. Twenty minutes later the price has shortened to 4.0. You lay the same horse at 4.0 with £25.
If the horse wins, your back bet wins £80 and your lay loses £75. If it loses, you lose £20 on the back and keep £25 from the lay. Either way you are about £5 up, before commission. That is the whole mechanic.
Greening up is the name for spreading a locked-in profit evenly across every outcome. Most exchange screens work out the lay stake for you. The name comes from the colour coding: green means a profit on that outcome, red a loss.
The harder question is one nobody automates. How do you know the price will move the way you need?
Three patterns people try first
Laying the favourite before the off and hoping it drifts. It is cheap to set up and looks good on the back of an envelope. The figures below are why we treat it with caution.
Scalping in-running. This means small backs and small lays at shifting prices while the race is under way. Some people may find an edge here with a quick eye and a fast screen, but the discipline and the swings involved are not casual.
Trading on news. A withdrawal, a jockey switch or ground changing unexpectedly can move a price before everyone has caught up. That takes attention across a whole card, which is hard to keep up.
All three are ideas people use, not methods we have tested.
What the figures say about favourites
Here is the check on the favourite. The figures cover Great Britain and Ireland from 1 July 2013 to 14 October 2026, using Betfair SP (the exchange’s starting price), a 2% commission, level one-point stakes, with fallers and pulled-up horses counted as losers. They describe that stretch of racing and will not repeat exactly.
| Betfair SP favourite | Result |
|---|---|
| Races | 167,257 |
| Win rate | 34.4% |
| A/E ratio | 1.00 |
| Return on stakes | -1.4% |
| Longest losing run | 28 |
A/E means actual against expected: how many winners the group produced compared with how many the prices suggested. An A/E of 1.00 means the two matched. A return of -1.4% means backing every favourite blind at Betfair SP lost a little over a penny per pound staked after commission, which is roughly what you would expect from a market priced about right with commission taken out.
Read it as a description of the sample. It does not say every favourite is priced correctly, and it does not say a trade built on a favourite can never work.
In an earlier analysis of the same kind of favourites, the win rate varied a lot with the type of race. Handicap favourites won 29.0% of the time (over 100,000 races) and non-handicap favourites won 43.1% (over 61,000). Different win rates, but nothing in that earlier work pointed to an obvious mistake in either set of prices.
These are starting-price figures. They do not measure how prices move before the off, so they cannot prove or rule out a drift trade. What they do show is that blind favourite backing at the off is not a bargain, so a blanket favourite template is not supported by this evidence. Particular spots could still differ.
Why many traders lose, and where an edge might sit
If favourites are priced about right at the off, a trader’s edge probably has to come from somewhere narrower. Here are three places it might sit. These are ideas, not tested results.
- Faster information. Spotting a non-runner or a jockey change a few seconds before the rest of the market reacts. This needs watching sources the casual bettor does not watch.
- Reading the race as it runs. A horse breaks well and the in-running price collapses. If you read the picture faster than the market, there may be a tick to take. The swings can be large.
- Small niches. Markets with little money in them (low liquidity), or place prices (for finishing in the first few) that look out of line with the win price. These tend to be small and tend to get competed away.
Costs matter as well. Commission is charged on a net winning market, not on every bet. If your back and lay on the same horse together make a profit, you pay commission on that profit. If the back and lay together make a loss, none is charged. Commission rates vary by account, and the 2% used in our analysis is a modelling choice.
The gap between the back price and the lay price, when you want to trade, is a cost too. The price has to move your way often enough to cover both.
How to test whether trading suits you
Before risking money, keep a paper record for a month. Pick one type of market. Write down every entry and exit, the price you wanted against the price you actually got, and the result after a notional 2% commission on winning markets. How to test a system live covers the habit of recording honestly.
Then ask a plain question. What did you know at the moment you placed the back that made you think the price would move? If the answer is “the system says so”, be cautious. If it is something specific the wider market had not yet absorbed, that may be worth following up.
A different route is to spend your effort on the other side of the game: finding value by understanding form, pace and ratings. If favourites are priced about right at the off, the places where a price looks off are more likely to be found in particular runners than in a trading template. That is a view, not a result. Our post on backing versus laying looks at the two sides in more detail, and how market percentage is calculated explains the cost built into any set of prices.
If you want to look at how a market is priced before you decide, open today’s race cards and compare the favourite’s price with the rest of the field.
