How is Betfair liability calculated?

When you lay a bet at Betfair you are required to have enough in your account to cover that bet. This amount, which is known as your liability, can often be much more than your lay stake.

To understand how liability works it can be helpful to think about the role of a bookie in traditional betting. If you place a $10 bet with a bookie at odds of 11, the bookie will have to pay you $110 if you win. Your initial $10 stake will be included in that payout, but the other $100 will have to come out of the bookies pocket. That is his liability. 

When we lay a bet at Betfair we are acting like a bookie. Therefore, we need to have enough in our account to cover the potential payout before we can place the bet.

The calculation for liability is pretty simple. We just multiply the stake amount by the odds - 1.

e.g. $50 at odds of 2.00 would have a liability of 50*(2-1) = $50
       $50 at odds of 5.00 would have a liability of 50*(5-1) = $200

As you can see, the higher the odds, the higher our liability will be.