Over-round Markets

Over-Round and Under-Round Markets

By The UK Horse Racing Tipster

Many people who bet with exchanges such as Betfair do so due to the better prices that are available when compared to normal bookmakers.

Not only do you have the opportunity to put standard win, each way, multiples and other common bets such as forecasts and reverse forecasts but you can also put on place only bets which most high street or online Bookmakers still don’t allow you to do, the nearest thing that they offer being a placepot (a place multiple).

Also with Betfair you have the chance to either bet against the system like a normal bookmakers and take the BSP (Betfair Starting Price) or you can use the exchanges and bet against other people like a proper market.

When you are using the betting exchanges you have the opportunity to set your own prices (however unrealistic) and you also have the chance of “becoming the bookmaker” yourself by “laying” horses.

This means you are taking the opposing bet from someone backing the horse to win. Therefore you have to pay out the liability if the horse wins the race or take the backers stake as your profit if it loses. Read this guide on laying for more information.

When you are dealing with lay betting it is useful to understand the difference between an “under-round” and “over-round” market.

Depending on whether you are laying or backing you might want to look out for an underround market to back all the runners in a race assuring yourself a profit or an overround market if you are laying all the runners to do the same.

Example of a “round” market

The following table shows an example of a “round” market. To keep things simple I am using the same price for each runner but you could imagine in a real market the favourite would have a lower price and the outsiders longer prices.

However in this example of a five horse race, the bookmaker has chosen to price up each horse with odds of 5.0 (4/1).

In this scenario, were he to take an equal amount of money on every runner, he would break even, as each horse would have a 20% chance of winning. Because there are five runners and each runners chance of winning is 20% the combined implied “probabilities” of winning equal 100% (5 * 20% = 100%).

Therefore if the book comes to exactly 100% it is perfectly “round”.

If the book is over 100% it’s “over-round” and if it’s under 100% it’s “under-round”.

Horse Odds Percent
A 5.0 20
B 5.0 20
C 5.0 20
D 5.0 20
E 5.0 20
round - 100

Example of an “overround” market

An over-round market is obviously where the probabilities of all the runners added together total more than 100%.

For example if our bookmaker were to price up each runner at 4.0 (3/1), the implied probability of each runner winning will change from 20% to 25%.

Also if he still took an equal amount on each runner he would receive five units and only have to pay out four. This extra unit amounts to a profitable 25% and 25% x 5 = 125%.

Therefore the book would be “over-round” by 25%.

Horse Odds Percent
A 4.0 25
B 4.0 25
C 4.0 25
D 4.0 25
E 4.0 25
over-round - 125

It is this extra amount built into the book that gives the bookie his advantage over the daily punter.

With an over-round book of 125% the bookmaker will expect to pay out £100 for every £125 he takes in, giving him an expected profit of 20% (£25/£125).

It is only gamblers who are wise to how these books are created and understand when a market is over or under priced that can take advantage of the betting exchanges.

This is because the book is made up from everyday people trading prices with each other and not a bookmaker purposefully creating an over-round book.

For the trader who wants to back or lay a whole market they will search out the over-round and under-round books on Betfair and pounce when the figures are in their favour.

You obviously have more chance of doing this on Betfair than the local bookies where a bookmaker has full control over all the prices in the market.

Example of an “under-round” market

An under-round market is the exact opposite of the over-round market in that the implied probabilities of each runner in the market adds up to less than 100%.

For example if each runner was priced at 6.0 (7/1), the implied probability of each horse winning the race will change to 16%.

If the bookmaker were once again to take an equal amount on each runner, he would receive five units BUT pay out six. There will be no profitable extra unit for him to take advantage of as 16% x 5 = 80%.

Therefore this book would be 20% “under-round”.

Horse Odds Percent
A 6.0 16
B 6.0 16
C 6.0 16
D 6.0 16
E 6.0 16
under-round - 80

If you were able to back every horse in this 20% under-round market at £10 stakes you are basically guaranteed to make a profit of £10.

You would spend £50 on stakes (e.g 5 horses @ £10 stake = £50) and the one horse that wins would return £60 profit. Therefore £60 – £50 = £10.

You can see that getting an under-round book in the local bookies shop is going to be almost impossible as they are never going to allow themselves to be out of pocket but on Betfair with the traders and punters making up the prices as they go it is possible to come across one every so often.

Trading with over and under round markets

Therefore with these examples you can see that if you are a backer you want to look for under-round markets and if you are a layer over-round markets.

By laying or backing the full book when it’s in your favour (under round for backers and over round for layers) you are almost guaranteeing yourself a profit as long as all your bets are matched.

However there is one other thing you will need to take into consideration on Betfair and that is the commission you have to pay out.

Betfair Commission

All users of Betfair should take note that a commission is charged from any profits made on a market. If however you lay and back a horse in the same market and end up even e.g you backed and laid a horse and made no money as each bet cancelled the other out. Then you would not pay any commission.

However if you are searching for over-round or under-round markets to lay and back all the runners in you will need to take your current commission rate into account otherwise an under-round market of 97% could easily become an over-round market of 102%.

The commission you are charged is based on a market base rate of roughly 5% minus your discount rate. This discount rate is based on the number of betting points you have accrued over the month.

You can read more about the Betfair market base rate here and more about how your betting discount rate is calculated here.

However a quick guide is that:

  • Apart from Bulgaria, Poland, Norway and Finland the market base rate is usually 5%.
  • In Bulgaria it’s 7.5%, Poland it’s 6.5% and Norway or Finland 5.5%
  • You can find out the actual market base rate under the “Rules” tab on each market under the “full market view”.
  • If the ‘Market Base Rate‘ on a market is 5%, and your Discount Rate is 10%, you will pay 4.5% commission on any winnings for that market.
  • If the Market Base Rate on a market is 7.5% and your Discount rate is 10% you will pay a 6.75% commission on any winnings for that market.
  • Commission payable is rounded to the nearest two decimal places. If the amount ends in 0.5 it will be rounded up.


This article was written with some examples taken from www.bettingmarket.com. Please visit the site for more information plus other real world examples from past events and the actual Betfair markets and their over-round statuses.

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