An each-way bet consists of two separate bets, consisting of a bet to win and another to place. A return on the bet is determined by the position of the selection. For the win part of the bet to pay out, the selection must win. For the place part of the bet to pay out, the selection must finish in a pre-determined place in the event. This predetermined position is usually first and second, but in larger fields this can be extended to third, fourth or maybe even fifth place.
A £1 “each way” bet would actually cost £2, as it is two bets. Odds can differ across places available and the different betting outlet, so it is important to know more about these placements and odds when betting each way.