Lay the Draw Insurance
For those unfamiliar with what “Lay the Draw” betting and trading is, here is a quick overview of this popular trading strategy. Following that, we will look at how we can use lay the draw insurance, and whether doing so is a smart move.
As no doubt you are aware, one of the benefits of betting exchanges such as Betfair is that they allow us to lay bets as well as placing them. In football betting, one of the lays available to us is to lay the draw. To do so, we identify a football game that we believe to be unlikely to result in a draw, locate it in the match odds market, and lay the draw.
As an example, if we lay the draw for £10 at 4.0, then our liability is £40 – 10 = £30.
Thus, if the match resulted in anything other than a draw, we would have a loss of £30, but if we are correct in our prediction that the game will end with one of the teams winning, we will win £10.
Lay the draw trading is a little different. In the above example, a draw would always result in a loss. However, lay the law trading in play betting provides us with an opportunity to profit even if the game ends in a draw. In this case, our profit stems from how the odds change during play.
Hedging your Lay
Assume that the favourite team scores the first goal making the score 1-0. A draw now seems less likely than when the score was 0-0, and as a result, the odds on a draw will almost certainly rise. By now backing the draw to hedge your initial lay, you can lock in a profit.
Say the odds on a draw increase to 6.0. We now bet £6.67 on a draw so should the game end in a draw we would win £40.2 – 6.67 = £33.53.
With this strategy we have locked in a profit whatever the result:
- The game ends in a draw – win £33.53, lose £30, profit = £3.35
- The game ends in a win – lose £6.67, win £10, profit = £3.37
This is just one strategy; there are many options. For instance, you could adjust your second bet to just cover the liability of the lay, effectively giving you a free bet.
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While the hedge we have described above will result in a profit whatever the outcome of the game, it does rely on the favourite scoring the first goal and the odds changing accordingly. But what if the underdog scored the first goal? Now a draw would seem more likely, and the odds would move against your hedging strategy and your chances of losing £30 would increase.
Go to the correct score market and look at the odds of a correct score of 0-0. These are likely to be considerably higher than the lay draw odds; possibly five times higher. Thus, by placing a small bet in this market, you can protect your lay the draw liability against a 0-0 draw.
While in theory that might seem attractive, in reality it is less so. The downside is that as soon as any side score a goal the insurance is worthless; you are not protected against any other drawing scoreline. The reality is that very few football matches end 0-0. Depending on the league, the percentage of matches in the 2017/18 season ending 0-0 range were from 4.2 to 8.4% – the English Premier were the highest and Dutch Eredivisie the lowest.
To insure lay the draw or not?
It’s up to you and your attitude to risk. Some people do it routinely; others consider it a wasted cost. We can’t decide; it depends on the odds at the time and what other hedging opportunities are available.
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