Advanced techniques and terminology-Market Percentages
As explained above, a bookmaker will always set his markets to over 100%, allowing for a profit margin and to manage his risk as the prices change.
When a market stands at 100%, it means every penny going into the market is being paid back to punters - like in a coin toss situation.This is often described as an efficient market - all the money in equals all the money going out, and there is no leakage such as profit margin taken.
The closer the Back market gets to 100%, it means the prices are more and more competitive. When a market first opens, the first people to post offers can ask for whatever price they like. Think of it like having the only shop in a town - you can charge any price you can get away with (it doesn't mean people will buy from you though) until someone else comes along and undercuts your price. As the market becomes more competitive, margins (market percentages) are reduced and more customers are willing to get involved.
If the market % on the Back side goes below 100%, it means every selection in the market could be backed to guarantee a profit regardless of the result. You would need to adjust your stakes so that each bet results in the same payout otherwise you would be left with profit on some and not others. This type of market anomaly does happen daily but you'll need to be lightning quick to get in before everyone else.
So if the bookies want a market above 100% to make a profit, it stands to reason that backers want a market under 100% for their profit. The lay side of the market is backers queuing up to bet - waiting for layers. This side of the market will remain below 100% except on rare occasions. When it does go above 100%, you could theoretically lay all runners to land a profit, but again, this type of market anomaly will be corrected by other customers so quick you probably won't have had a chance to pull out the calculator.