# What is place betting?

When place betting you are either backing or laying a selection will or will not finish amongst the top places in a sports event. We explain what place betting is, and how to calculate your payout.

Place betting is essentially a bet on a selection performing well, but not necessarily winning - unlike an outright bet. The number of places offered will depend on the sport and the size of the field. You should read the individual sports to place rules before betting.

The number of places you can bet on depends on the size of the field and sport. For example, golf events offer bettors the chance to bet on players finishing inside the top five or ten, while horse racing is commonly the first three - but varies depending on field size.

Place betting is a good bet for traders to reduce their risk when betting on unpredictable events with large fields - such as the Grand National, or one of the golf majors.

## How to calculate your payout for a back bet on a place betting market

There are two stages to calculating your payout for place betting. For our example let’s say you backed Paul Casey to place in the top 5 at the 2016 Masters with a stake of £200 at odds of 14.00

Step 1: Calculate return excluding commission

It’s calculated as:

Odds * Stake = £ return

So in our example: 14.00 * 200 = £2800

As Paul Casey finished tied fourth in the 2016 Masters your bet returned £2800 - including stake, with an overall profit of £2600. If Casey had finished outside of the top 5 you would have lost your £200 stake.

However, because betting exchanges don’t add a margin into the odds - unlike bookmakers - you need to subtract the commission from the profit.

Step 2: Calculate return with commission

It’s calculated as:

((Stake * (Odds -1)) * Commission rate

In our example that would be: ((200 * (14.00 -1)) * 2% = £52 commission

So in our example you would be charged £52 commission, meaning your return would be £2748 - a profit of £2548.

Even when commission is factored in to the odds, you will generally find Smarkets will have the best price - a result of our industry low 2% commission on winning bets only.

Once you have learnt how to calculate betting margins, you can compare margins across bookmakers and exchanges, to find who offers you the best value odds.

## How to calculate your payout for a lay bet on a place betting market

Unlike a bookmaker when betting on a place market, you can also lay the result. As an example let’s say you lay Rory McIlroy to finish in the top 5 at the 2016 Masters with a stake of £100 at odds of 3.40.

Similarly to calculating your payout for a back bet, there are two stages for a lay bet.

Step 1: Calculate return excluding commission

It’s calculated as:

Stake = profit

So in our example: £200 = £200

As McIlroy finished outside the top 5, you would have made a £200 profit (before commission).

Step 2: Calculate return with commission

The next stage is to calculate your lay bet profit, with the exchange commission factored in. At Smarkets - 2% commission - you can use the following calculation:

Stake * 0.98 = profit

In our example that would be: 200 * 0.98 = £196

Therefore you would be charged £4 commission, meaning your profit would be £196.

When laying outcomes on a betting exchange, you should be aware of your liability on a lay bet - the amount you would need to payout if McIlroy had finished inside the top 5. This article explains how to calculate liability on an exchange.

If McIlroy had placed in the top 5, your liability would have been deducted, resulting in a loss of £480.

## Apply this to betting

You now understand what a place betting market is and how to calculate your payout - giving you the best chance to make a profit on this betting market.

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