The Difference Between Fixed liability And Fixed Staking When Laying
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?
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.