A betting exchange is a platform that allows individuals to bet against each other rather than against a bookmaker. Users can either back a selection to win or lay a selection, meaning they can bet on an outcome not happening. This creates a marketplace where odds can fluctuate based on supply and demand, often resulting in better odds for bettors compared to traditional betting methods. In a betting exchange, users can also trade their bets, similar to trading stocks. This means they can close their positions before an event concludes, potentially locking in profits or minimizing losses. Popular examples of betting exchanges include Betfair and Smarkets.