Exchange commission: what it is charged on and when

Commission is charged on net winnings on a market, not on turnover and not on individual bets. Win 100 and lose 40 on the same market and commission applies to the 60, not to the 100. The rate is set per account and can vary with volume.

Charging on net rather than gross is what makes an exchange usable for anybody trading in and out of a position. If each leg were charged separately, a series of offsetting bets that ended level would still cost money, and the venue's whole purpose — letting a price be taken and given back — would be priced out of existence.

It does not apply to losses, which is why a losing market costs exactly the money lost, and it does not usually apply to the stake, which is returned as part of the winnings rather than counted within them.

And that is the trap. Comparing an exchange price to a bookmaker's without subtracting commission overstates it on every selection, and the overstatement is largest exactly where exchanges look most attractive — on long prices, where the winnings commission is charged on are largest.

What to do with it. Do every price comparison on net return after commission, and know your own rate rather than the advertised standard one.