Spread Betting Explained

2005-06-19

Sports spread betting is different to traditional sports betting, in that it has potential for nearly unlimited wins!

Spread betting is a relatively new form of gambling. It's a system where more accurate the gamble, the more is won. The reverse is also true, that is the less accurate one is, then more is lost.

In spread betting, a bet is made against a 'spread' (or index). This is on whether the outcome will be above or below the spread. The amount won or lost will depend on the level of index at the outcome. The spread represents index firm's margin, with the bigger the spread, the more they will collect from the punters. So try to look for the firms with the smallest spreads. Also the spread may be specified in half-point fractions, this is to avoid a tie (called a push in the spreadbetting world).

History

Spread betting's history is in American sports betting. It was imported to the United Kingdom in the 1980s and soon became quite popular.

Example

Let's give an example:
Colombia is playing England in a friendly soccer match so we check SportingIndex for what outcomes/markets we can bet on.

We find one that reads "England/Colombia (h)" with a current spread of 0.3-0.5

The actions we can do are listed Buy and Sell.

What's this mean you ask?
Well this is a bet on what margin England will have over Colombia. For instance:
If you think England will win by more then 0.5 of a goal, you buy.
Or
If you think England's margin will be less then 0.3, then you sell.

Since you can't have 0.5 or 0.3 of a goal, it boils down to:
Buy if you think England will win with 1 goal or more,
or sell if you think it will be a draw, or England will lose.

The amount you will win (or lose) depends on 2 factors; the size of your stake, and the final score.

You can also bet on various other numbers in the game, for example the amount of corners in a match, but as always the amount you win or lose will depend on difference of the outcome compared to your spread index.

For the example, say we have a stake of £10 a point and we choose buy at 0.5

If England won, and the score was 2-0
England's margin would be 2.0
You win £10 for every point above 0.5, so in this case,
2.0 - 0.5 = 1.5 points
£10 * 1.5 points = £15
So you would get a profit of £15

Another Example

Say you choose to sell at 0.3 on the above game because you thought England would not win. To find out how much you lose:

England's margin was 2.0
You have to pay £10 for each point above 0.3
2.0 - 0.3 = 1.7 points
£10 * 1.7 points = £17
So you would of had to pay out £17 to the spread betting firm.

Here are the amounts you would win (or lose) depending on the score, using a stake at £10.

Score	Buy	Sell
3-0	25	-27
2-0	15	-17
1-0	5	-7
0-0	-5	3
0-1	-15	13
0-2	-25	23
0-3	-35	33

As you can see, the amount you win (or lose) can vary greatly depending on how great or small the difference from the spread is. Because of this, spread betting carries great risk, but also great reward, as the amount you can lose can be unlimited, but also the amount you can win.