I have been wondering how betting exchanges like Smarkets actually work. If I back or lay a particular outcome, I have to wait until one other individual matches it by doing the opposite. For example, I lay an outcome, I have to wait for someone to back the same outcome. Then it will be fully matched, and if someone partially backs my lay that means my lay bet is partially matched.
Does the platform match users in pairs — a back and a lay?
I am really confused. Could someone please shed some light on the inner workings?