Betting exchanges have certainly opened my eyes in terms of the sheer value that can be found on practically any given market, both in terms of odds and the flexibility of 'In Play' markets. I have yet to see better odds available at a high street bookmaker when compared to exchanges, and there is a good reason for this.

Bets are always matched at the best price, so there is always competition from other punters to take pole position, with the best odds appearing at the forefront of all the other available bets. Put simply, if someone is offering 5.4 for Liverpool to win the league, you can usurp their position by offering 5.6 to take the top spot. It is vital, as a punter, to attract money by pricing according to the market - something that a newbie will soon learn if he or she wants to take a slice of the action. Still, be sure not to be too generous!

With punters continually trying to outdo each other, markets can move wildly, and there is money to be made once an event gets underway. As an example, if you believe Manchester United will suffer at the hands of local rivals Manchester City in the forthcoming derby, then lump on City to win - odds might be in the region of 8 or 9. Assuming City score first, their odds will drop remarkably, perhaps to around 3 or 4, allowing you to hedge your bets (by laying off City, or backing Manchester United at what will be vastly improved odds).

You simply can't do this via a traditional bookie, and more and more people are realising that to maximise the value of 'fixed odds' betting, exchanges are the only way forward. If a team is 2-0 up, then there are various ways of locking in profits, as we will discover in future articles. This is where the real value lies - after all, how many times have you thought a bet was looking certain to produce a return only for a last minute equaliser to steal your thunder?!

Exchange betting puts a whole new spin on fixed odds betting as it rewards you the more right you are, assuming you concentrate and work the market when it turns 'in-play'. In this respect it is similar to spreadbetting, as it provides you with an exit route at any stage prior to the end of a match, rather than coupon-based betting, where the odds never change regardless of the scoreline. Not all matches become in-play, but as a rule, if it is on the television, you will most likely be able to bet on it right through to the final whistle.

So, there is value to be had right up until the end of play on televised football, cricket, tennis, golf and other events. Another worthy addition is the FTSE and Dow markets, where you can bet in-running throunghout the course of the day, playing the indices rather than chancing your arm on individual shares via a stockbroker. And there are no real economies of scale needed to take part as exchanges take a commission of winnings, rather than imposing a flat-rate fee for the privelidge of getting involved. The smallest bet available on Betfair is £2.

To ultimately highlight the value of betting on exchanges, all you need to do is compare the odds offered by William Hill on the winner of this season's Premiership with Betfair, which claims to be the largest online betting firm in the UK (so does William Hill, for that matter).

William Hill first, Betfair in parentheses:

Arsenal 2.25 (2.55) Liverpool 4.3 (5.4) Newcastle 23 (36) Manchester City 101 (230) Fulham 301 (650)

Next - Exchanges - How to manipulate the odds on 'in-play' markets