When you lay a horse you are acting as the bookmaker: you win the backer's stake if it loses, and pay out the winnings if it wins. The amount you could lose is your liability, and on longer prices it can be many times the stake.
The formula
Liability = lay stake × (lay odds − 1)
Lay stake = liability ÷ (lay odds − 1)
Lay stake = liability ÷ (lay odds − 1)
Worked example
You lay £20 at 6.0. Liability = 20 × 5 = £100. If the horse loses you win £20 (£19 after 5% commission). If it wins you lose £100.
Laying a 21.0 shot for £20 carries a £400 liability, which is why many traders size lays by the liability they are prepared to lose rather than by stake. Switch the calculator to Max liability to do that.
Questions
Why did the exchange take more than my stake?
Exchanges reserve the full liability from your balance when a lay is matched, not the lay stake.
Is laying riskier than backing?
The risk is the same maths from the other side. The difference is where it sits: a backer risks the stake, a layer risks the liability. Always check the liability figure before confirming.