Why do the lay and back bet not match each other

[Sandy]

So I have built an application where I used the BSP historical data. The application uses both back and lay in the same market. From my understanding, the BSP price is the back and lay price balanced. So if we take to Win Horse Racing market, it the back price quoted just before the race is 1.5 and lay price is 1.6 then the BSP price 1.55. Is this correct? Further to this why isn't the price the same for back and the lay price?

[jabe]

All the prices are merely offers. Some people are offering the odds on the left, along with an amount of money, and therefore hoping to lay the outcome so inviting people to take the offer, or part of the offer, by backing the outcome at those odds. Similar but different with prices on the right. If someone accepts odds for all the money available at those odds, the odds sometimes disappear, until someone else makes a new offer at those odds. The back and lay prices can't be shown the same because when they really are, it means the process of matching offers and acceptances of offers is incomplete.

Don't know much about BSD as it's not really had relevance for me.

[Corvus]

The back price will be the same as the lay price if you go in to both sides of BSP - there is as you say only one price. What you probably haven't spotted is that the stake size is variable for the lay side - so you won't end up with zero P&L. The back bet is scaled as stake, but the lay bet is scaled as liability.

So if you put in a BSP back of £10 and a BSP lay of £10, and the BSP comes in at 2.0, then you stand to win £10 on the back, and lose £10 on the lay, so you will indeed end up with zero P&L whatever the outcome. But if the BSP came in at 3.0, then if it wins you get £20 on the back, bust still only lose £10 on the lay - you have backed £10, but now your lay stake is only £5. If the selection loses you will be down £5. Only half of your bet has netted. Conversely if the BSP was 1.50, then you would end up laying £20 and backing £10.

Hope that helps a bit!

[silver7]

Wow this is all very very complex !