No such thing as a stupid question, so....!

[iambic_pentameter]

Hello

Stupid question incoming

Can someone explain in very simple terms how Weight of Money works ie:

If there is more money on the lay side, does that mean the price will (in theory) rise or vice versa?

I know that some traders use WOM as an indicator and some don't but any clear explaination would be great.

Thanks,

Iambic

[Euler]

Let us imagine a perfect market where there was equal amounts of money being taken from both sides of the market.

Every 1 sec £500 was removed from the back and lay side.

If you had a market that had back and lay stakes of like this: -

4.00 £750 - £250 4.10

Then the next update £500 is removed from both, leaving

4.00 £250 - (£250) 4.10

Obviously you can't have a negative value in a betting exchange so the odds just move to the next point, in this case new money arrives and gets matched at 4.20.

That's the basic principle on weight of money.

[iambic_pentameter]

Thank you, Euler.

[Euler]

I was asked a question in a quiz this week and by a process of elimination I figured out the answer to be your user name. I now understand exactly what it means!