good explanation

Each-Way Bet Example
You bet £50EW on Dipsy Discs in the 4.15 at Lingfield at odds of 25-1
The Each Way terms are 1/5 1,2,3
Bookmakers take the £100 stake out of your betting account (£50EW is 2 £50 bets)


There are 3 different outcomes for this bet Horse Fails to Win or Place
If the horse finishes out of the places (1,2,3) such as 4th or worse then you lose your entire stake
A Place but not a Win
If the horse finishes 2nd or 3rd then it has placed, but hasn't won. There is no difference between 2nd and 3rd - they count the same - they are both "a place".
So remembering that your £50EW is TWO bets - £50 win and £50 place.

A) The first thing is that the £50 win bet is a loser.
B) However the £50 place bet is a winner which as we mentioned above is calculated based on the odds (25-1) and the place fraction (1/5th), meaning in this case the place odds are 5-1.

So that bet wins £50 x 5 = £250 + your stake back giving you a total return of £300.

Putting it together:
So on your £50 EW bet (a bet of £100) you ended up getting £300 back in total = a profit of £200, being the net £250 profit on the place bet and £50 loss on the win bet.