What is Spread Betting

August 10, 2010 - by mosesbet · Filed Under betting articles Comments Off on What is Spread Betting 

What is Spreadbetting?

Spreadbetting refers to betting on the markets, as opposed to fixed odds betting which is dependant on the outcome of individual games or events.

Spreadbetting had its origins in the financial markets (where stockbrokers would “buy high” “sell low” etc) but now there are a number of companies who are providing markets for sports betting.  Cantor Sport, IG Index, Sporting Index and Spreadex are the most well known spreadbetting sports markets.

The main advantage of spreadbetting in contrast to fixed odds bets is that you can buy or sell at any time in return for a profit.  This means you can cash in your investment when you think the market has peaked as opposed to relying on the single outcome of a sports game.  Imagine that you bought at 125.5 at £5 per point for Man Utd winning and 75 minutes into the match the offer price is now 127.0.  You could sell cash in your investment now and make £7.50 profit.  Even if Man Utd concedes in the final minutes and the market drops to 120.0 it makes no difference as you have already cashed in on the spread and made profit.  The “spread” is the difference between the buying and selling price (aka margin).

Another advantage to spreadbetting is that you can bet on both sides of the market e.g. a win and loss.  This reduces a lot of the risks plus you can offload your losses by bailing out at any time.  Players can calculate their maximum losses by multiplying the worst case scenario by their unit buying price.  For example, if you buy 2.5 at £1 per unit then the maximum that can be lost is 2.5×1 = £2.50.

There are big risks to spreadbetting and it requires exceptionally risk analysis and judgment of the markets.  Spreadbetting requires foresight on how the market will play out – for example if you believe that the real odds are different to those provided by the bookmakers market then you can exploit this.  Remember that normally the markets heavily cover the favorites because everyone likes betting on a “win”.  This leads to the bookies reducing the odds for a “win” and increasing them for a “lay” in order to balance the books.  If you can forecast this happening beforehand then you should bet wager on the market for the underdogs improving or sell when the market for a big win has hit its peak.

Let’s look at another example of betting in running.  Let’s pretend Newcastle are playing Blackburn an the opening quote on the total goals before the game started was 2.0 – 2.3.  If Liverpool take a 2-0 lead within the first 15 minutes than the revised quote in running would rocket to 4.0 – 4.3 or something.  Anyone who bought at 2.0 could take a profit of 2.3 times their unit stake by selling at the revise figure.