What Is Market Making in Betting? How Peer-to-Peer Prices Get Set

Market making in betting means posting a price on both sides and standing ready to take either one. Here is how a two-sided quote works in probability terms, why the gap between the two numbers is the whole business, what liquidity really tells you, and why the makers in a peer-to-peer market quote far tighter than a house ever will.

The rundown

• What is market making in betting? Market making in betting is posting a price on both sides of a market and committing to take either side at those prices, which is how a peer-to-peer market sets its odds.
• How do market makers make money? Market makers make money on the gap between the two prices they quote, not by predicting who wins.
• What does liquidity mean on a betting exchange? Liquidity on a betting exchange is how much money is available to be matched at each price, which determines whether you can bet the size you want at the number you see.

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