Dutching backs several horses in the same race with stakes weighted so that whichever of them wins, the return is identical. It suits races where you can narrow the field to two or three runners but not to one.
The formula
Stake on each = total stake × (1 ÷ its odds) ÷ Σ(1 ÷ odds)
Return if any wins = total stake ÷ Σ(1 ÷ odds)
Return if any wins = total stake ÷ Σ(1 ÷ odds)
Worked example
£100 across 4.0 and 6.0: Σ = 0.25 + 0.1667 = 0.4167. Stakes £60 and £40. Either winning returns £240, a £140 profit (£133 after commission). If neither wins you lose £100.
The combined book tells you the implied chance that one of your selections wins. If it reaches 100%, dutching those prices cannot make a profit.
Questions
Can I dutch by laying?
Yes, but the maths differs. Laying several runners is usually done by backing the rest of the field or by using a lay-dutching tool that balances liabilities.