Now you can become bookmaker by offering your own odds! The financial industry has something called "an exchange.
" This is how it works: Companies divide themselves up into stocks and each of those stocks are sold on an exchange.
Buyers of the stocks become partial owners of the company.
As a company does well, other people want to buy the stocks...
but companies can divide themselves up indefinitely.
Each company has a finite amount of shares.
So instead of going to the company for stock, the person who wants to buy into a company has to go to someone who is already a shareholder and offer to buy the shares.
Obviously they need to offer more than the person bought them for or else it wouldn't be worth it.
So when many people do that, the price of the shares in a company trend higher.
When the opposite occurs and people don't want the shares in a company, they are willing to sell them at any price and the prices trend down.
So in effect, an exchange IS the market because the market sets the price on the shares.
As well, an exchange connects buyer and seller without having to go to the company to buy and sell shares.
In the same way a betting exchange is the market because it acts in place of a bookmaker: Rather than you approaching a bookie to place a bet (and the bookie will cover the bet) you go to the exchange.
You place a bet and someone else will cover it.
Therefore, the betting exchange, like the financial exchange, also connects interested parties.