Racing: One word on the television, a click of the mouse and the market swings

Come on, be honest. Where was your money? We know where it is now, in the bookies' coffers, but where was it before the Grand National started?

Come on, be honest. Where was your money? We know where it is now, in the bookies' coffers, but where was it before the Grand National started? This Blue Riband of steeplechasing, an arduous four miles four furlongs of boggy, strength-sapping ground, is treacherously difficult, with 30 jumps that provide daunting, yet thrilling obstacles. As the horses leaped the nation's breath was collectively held and all those tenners, lunchtime flutters, inched their way closer to the bookies.

The housewives' favourite race always provides heavily backed runners as those with only a passing interest in the sport are swayed by opinion and chatter. This year the money went on Clan Royal, backed in further than the 10-1 he was hovering at in mid-morning, and Hedgehunter. Both worthy horses, the former with A P McCoy on board and the latter a faller at the last fence 12 months ago. But more interesting was the last minute avalanche of money for Forest Gunner. Maybe a bit of sisterly love as the girls backed Carrie Ford, the jockey.

The rain did little to dampen support for them but for some punters the hard work had started when snow was on the ground months ago, about the same time it did for some of the horses. Positions had been taken, reduced, switched - all in the pursuit of having a no-lose book.

"How?" you cry. The answer is the betting exchanges. Betfair, the largest and rumoured to be considering a stock market flotation worth £700m, started in 2001 and before the race started had matched over £3m. On Betfair, punters - that is you and me - can bet against each other and decide exactly what part of the bet we want. Do we want to back a horse, or oppose it, or lay it, just the same as a traditional bookie does.

In fact many of us do both and that is where betting on exchanges resembles buying and selling shares and, just like that business, there is plenty of rumour.

One lucky chappie (OK, it's me) was fortunate to get very strong advice over a glass or two from the editor of Inside Edge magazine during an award ceremony and backed Nil Desperandum one month ago at 33-1 on Betfair for £20, a potential win of £660. Not a bad bet for a horse who was increasingly favoured in the run-up to the race. But just before the start yesterday he was available to lay (oppose) at 20-1. Another bet, this time a lay of £20 left no loss whatever the result and the possibility of a £260 win. The maths are simple really, the money spent backing was £20 and the money received from laying was £20 so they cancel each other out. What remains is the win if Nil Desperandum wins and the liability if it wins, £660 and £400 respectively.

But it would not be the National without a bet on the day and the price movements during the race provide opportunity, mostly inspired by the television commentary.

"Strong Resolve not too good", was heard at the seventh fence and his price went from 10-1 to 13-1 and then 16-1 in a couple of seconds. The next commentator saw it differently and muttered: "Strong Resolve going well now" and the price whiplashed back in to 11-1 and then straight out again to 14-1 as the commentator added: "Hedgehunter travelling well in fourth."

But it was poor old Clan Royal and McCoy who suffered the most. He was cruising with a five-length lead and a price of 3-1 until stray horses did for him at Becher's second time round. The favourite-in-running was gone, the layers were quids in and Hedgehunter assumed his supremacy on the course and in the market as he shortened from 9-1 to 4-1.

The Chair provided drama as usual as Double Honour pitched on landing. At 20-1 to lay it suggested easy money as such poor jumping would surely never win. A couple of clicks of the mouse later the sharp operators had opposed him, and they were celebrating a minute later when the 21st fence claimed him.

But what about Ford and Forest Gunner. She certainly gave them a run and with three fences to jump she was 8-1 and well placed. But the bet of the day was on Hedgehunter, half-way round and scampering past a forlorn Clan Royal. That 9-1, with a depleted field chasing, was a glorious trade and seen as such by so many on Betfair that he plummeted to 3-1 and lower until the end.

With £3m matched on the race someone other than traditional bookies is laughing all the way to the bank, although probably not you and certainly not me.

Iain Fletcher is author of 'Game, Set And Matched', about betting exchanges.