What is net liability?
Net liability refers to your overall exposure incurred on all of your open bets.
When you have multiple lay bets on different outcomes in the same market, your exposure may be less than the sum of your liabilities for each individual bet. This is because it may not be possible for all of your bets to lose.
Your net exposure is the highest amount you can lose, given the worst case scenario for all of your open bets. Your worst case scenario may well include one or more winning bets.
Net liability example
When you lay both the home and away team on a football match only one of your bets can lose.
Therefore, the maximum amount that can be lost on a market will be deducted from your balance as your exposure.
Let’s use a game between Tottenham Hotspur and Manchester City to explain, with the following hypothetical bets:
Tottenham: Layed £10 at 3.15 (Liability £21.50. Potential winnings £10)
Manchester City: Layed £10 at 2.52 (Liability £15.20. Potential winnings £10)
There are three different outcomes for this match, which give varying returns. For the sake of simplicity, we will ignore commission for now.
If Tottenham win, you will lose £21.50 from your bet against Tottenham. You will win your bet against Manchester City, winning £10. Your overall loss is £11.50.
If it’s a draw, you will win both bets. Each bet will win you £10. Your overall profit will be £20.
If Manchester City win, you will lose £15.20 from your bet against Manchester City. You will win your bet against Tottenham Hotspur, winning £10. Your overall loss is £5.20.
In this example, the maximum amount you can lose on this market is £11.50, which occurs should Tottenham Hotspur win.
Therefore only £11.50 is deducted from your available balance as this is your overall net liability for the market.