What is spread betting?
Unlike traditional fixed-odds betting where you are effectively betting on a set win or lose outcome, spread betting is focused more on the movement of the market and how accurate you are in your prediction. Our beginners guide to spread betting is aimed at those who want to understand this alternative way to bet which is a bit like a stock exchange but for sports events. Buy low, sell high…
With spread betting the amount you win or lose on any bet can vary so, basically, the more correct your prediction, the more you can win. However, the more wrong you are, the more you can potentially lose. Unlike with fixed-odds betting, when spread betting you can win or lose multiples of your initial stake.
The main players who specialise in spread betting are SpreadEx.
How to place a spread bet
With spread betting, the spread betting company will quote a spread for the market in question that you either ‘Buy’ or ‘Sell’. If you think the quote is too low, then you would ‘Buy’ at the higher price quoted. If you think the quote is too high, then you would ‘Sell’ at the lower price.
Perhaps the easiest example to use to explain how to place a spread bet is that of a football team’s points total over the course of a season.
Let’s say at the start of a new season that you think that a team would gain more points over the course of the campaign than the higher end of the spread on offer (we’ll use 60 points as an example).
In that scenario, you would ‘Buy’ at the higher price quoted. So, were you stake £2 per point (stakes can of course be higher or lower should you choose) above the 60 point ‘Buy’ price and your selection ended the season with 65 points, you would win £10 (£2 x by the difference between the higher end spread – 60 – and the points actually accrued – 65).
However, were your chosen selection to only secure 50 points over the course of the season, then you would be looking at a loss of £20 (£2 x the difference between the actual points won and the spread).
Were you to favour a lower points total, then you would ‘Sell’ at the lower price quoted (in this instance let’s say 58.5 points). Using a £2 stake as our example again, you would then be looking at a profit of £2 for every point under 58.5 at the season’s end.
So were the team in question to accrue 50 points, your return would be £17 (8.5 points at £2 per point). Were they to reach 65 points, then your loss would be £13.
Opening a spread betting account
Applying to open an online account with a spread betting company is a straightforward process that can usually be completed in minutes.
There is the possibility of having either a credit account or a deposit account, with the former enabling you to bet up to an agreed credit limit that usually requires settlement on either a weekly or fortnightly basis.
Spread betting stop loss explained
You can open a spread betting account with either a ‘Stop Loss’ or ‘No Stop Loss’ option. A Stop Loss provides a safety net that enables you to limit your exposure to losses by automatically applying a pre-set limit on any losses (or profit) from any given bet.
A good example of where a Stop Loss could come in useful is Total Goal Minutes in football spread betting. This market covers the total aggregate time of all the goals scored in a game. For example, if there were goals scored in the 26th, 45th, 54th, 70th, 75th and 90th minutes of a game, the Total Goal Minutes would be 360.
Were the spread to have been 125-135 Total Goal Minutes and you had opted to ‘Sell’ at a stake of £1 in the expectation of a low-scoring game, then you would be looking at a hefty loss of £235. However, the Stop Loss for this market may have been set at 100, so your maximum loss under these circumstances would be £100.
An alternative option would be to close out your bets in-play, which is available for many spread betting markets. This can allow you to cut losses or lock-in profits. The thing to be aware of here is that the market spread moves in-play, based on the state of the game in question.
Sports spread betting options
Spread betting covers most major sports, including football, horse racing, cricket, tennis, golf, rugby union, rugby league, NFL and boxing.
Sports spread betting isn’t recommended for betting novices, but it can be a great option for those who know their chosen sport, do their research and have a full comprehension of the market they are betting on.