Punters in Asia are looking for a 50/50 bet, and so for a football match they eliminate the draw by giving one team a theoretical handicap to overcome. The other team, therefore, receives a handicap head start. This handicap may be +/- 0, 0.25, 0.5, 0.75, 1, or extensions of that. Basically, add or subtract the handicap from the final result for the team you’ve backed, and that gives you the Asian Handicap result.
Liverpool ( 0 ) v Manchester United ( 0 ) : here the bookies can’t split the teams. Quite simply, if you back Liverpool and they win, then you collect. If you back Manchester United and they win, you collect. If the game finishes in a draw, all stakes are voided and returned.
Liverpool ( -0.5 ) v Manchester United ( +0.5 ) : here, Manchester United are getting a theoretical 0.5 goal head- start, whilst Liverpool must overcome a 0.5 goal deficit. If you back Liverpool, you therefore need them to win in order for you to collect. If Manchester United draw or win, add the handicap head start to the actual result, and if you backed United, you pick up. So, a 1-1 draw becomes 1 v 1.5 in United‘s favour.
Liverpool ( -1 ) v Manchester United ( +1 ) : here if you back Liverpool and they only win by 1, then deduct the handicap head-start they have to give (a result of 2-1 becomes 1-1 for instance ) and the game becomes a handicap draw, is deemed void, and all stakes are returned.
Liverpool ( -0.25 ) v Manchester United ( +0.25 ) : this is the slight complication, and you’ll see it sometimes expressed as Liverpool ( 0, -0.5 ). What happens here is that half of your stake applies to Liverpool ( 0 ) and half of your stake to Liverpool ( -0.5 ). Then you apply the “rules” as per above.
Liverpool ( -0.75 ) v Manchester United ( +0.75 ) : this is the same as above, i.e. it may be shown alternatively as Liverpool ( -0.5, -1 ).
So what can happen here is you get half your stake refunded (for a handicap draw ) while winning or losing with the other half depending upon which team you’ve backed. We’ve accounted for this as half void, half win / lose.
It’s no more complicated than that, and the above applies for handicaps of +/- 1.25, +/- 1.5, +/- 1.75, +/-2 or whatever.
Remember, odds are an expression of the % probability of an outcome occurring. In the UK we use fractional odds such as 2-1, 9-4, etc., whilst almost everyone else uses decimal odds such as 1.95, 2.1, etc.
Asian handicap punters use decimal odds. By eliminating the draw, there are then only two possible outcomes in a football match and the bookies ascribe the theoretical handicap to make both outcomes equally likely. In a pure market, both outcomes would be 50/50, which is expressed as 2.0 in decimals, whereby if you put $1 on a particular outcome, you win your $1 stake and $1 profit, i.e. $2.
The bookies price the game up accordingly at the outset, but give themselves a slight cushion by pricing the two outcomes at 1.975. So for our Liverpool ( -0.5 ) v Manchester United ( +0.5 ), both outcomes would initially be priced at 1.975. Then the market forces come into play. If there is a huge amount of money coming in for Liverpool, the price may shorten to 1.90 and Manchester United lengthen to 2.1, until there is a tipping point where the price is too short and no one wants to back Liverpool anymore.
The bookies, trying to get the game back to a 50/50 scenario, will then adjust the handicap, making Liverpool now overcome a 0.75 deficit and the prices return to 1.975. This then continues, and may fluctuate either way, until the kick off.