Maximum potential pay-off of the wager is known when the bet is taken and as a corollary risk is known beforehand by being limited to the initial stake.
Odds have to be consistent with the real-time pricing of the underlying financial instruments listed on foreign exchange markets or securities exchanges in order to avoid arbitrage opportunities (although this might not be possible because of limitations on shorting, i.e. laying bets).
Implied volatility is forward looking, that is, it can be used to estimate the odds for future price movements using mathematical algorithms.
The fixed odds company will calculate how much has to be bet to win a certain amount upon settlement if the conditions of the prediction become true.
The benefit of leverage to the participant is that it allows a greater percentage change in capital than if it were invested directly in the underlying asset.
This makes financial betting less capital intensive than trading directly on securities exchanges.