# How to calculate the liability of a lay bet

Understanding how to calculate the liability of a lay bet is a fundamental skill for any betting exchange user, and something you should learn. Find out how to calculate your lay bet liability and why it’s so important.

## What is liability on a betting exchange

Bet liability refers to the amount you are risking when placing a bet - whether that's backing or laying an outcome. This amount will be deducted from your balance should your bet lose.

When backing an outcome, the liability is your stake - the amount you bet. Unlike back bets where you only lose your stake regardless of the odds, the liability of a lay bet is dependent on the odds.

## How to calculate liability of a lay bet

Calculating the liability of a lay bet can be done with this simple equation:

Liability = (Backers stake * (Lay odds – 1)

As an example, let's say you're going to lay Real Madrid at odds of 1.32 with a £20 stake against Roma:

Liability = £20 * (1.32 - 1) = £6.40

To place a lay bet you would require a minimum of £6.40 available in your exchange account.

When placing a lay bet on Smarkets your liability is displayed as shown below:

Note: Smarkets give users two options for displaying bet liability. If Backer’s stake option is ticked (set as default on your Smarkets account), you would use the calculation above to work out your liability, but if this is unticked in your settings, your liability is your stake.

## Why being able to calculate your lay bet liability is important

Being able to calculate your lay bet liability is vital on a betting exchange, it helps you:

• Know how much you’re liable to payout if the lay bet loses.
• Know whether or not trading out would be worthwhile at the current odds.
• Minimise your losses by sticking to your staking method, and knowing exactly how high you can lay odds within your limits.

## Apply this to betting

Now you understand how to calculate the liability of a lay bet on a betting exchange, you’re in the perfect position to take advantage of a new way of betting - laying outcomes on the exchange.

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