Glossary / Books & exchanges / Exchange
A ParlayAPI glossary entry

Exchange

A betting exchange is a peer-to-peer marketplace where users bet against each other rather than against the house: one side backs an outcome, the other lays it, and the exchange matches them and takes a small commission on net winnings. Betfair, Smarkets, and Matchbook are the best-known examples.

In practice

Because prices form from user order flow rather than a bookmaker's margin, a liquid exchange market's price - after commission - sits very close to fair value, with no vig baked into the quote. The trade-offs: liquidity concentrates in major markets, commission eats a few percent of winnings, and the lay side requires posting liability up front. Exchanges also enable trading in and out of positions mid-event, like a financial market.

Where it shows up in ParlayAPI

Exchange-style prices are one more reference point when judging fair value alongside the devigged sharp anchor - ParlayAPI's aggregate spans 45+ sportsbooks & sources, and the same implied-probability math applies to any of them (exchange quotes are natively decimal).

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