What is Spread Betting?
What is Spread Betting? The basic principle is that a bookmaker quotes a spread on a particular market. The spread represents the difference between the buying price and the selling price. The difference in the spread is how the company make their money.
Bettors and traders place a bet on whether the actual outcome will be above or below the spread. The amount of the bet or trade is based on the stake, which is the amount they are willing to risk ‘per point’ of movement in the market.
If the bettor is correct and the market moves in their favour, they will make a profit. However, if the market moves against them, they will incur losses.
Still not clear? Don’t worry, there are plenty of examples to come.
What is Spread Betting on Sports?
Sports spread betting allows punters to bet on the outcome of a game or event but also take advantage of the margin of victory or defeat. One of the advantages of sports spread betting is that it allows for a greater degree of flexibility than traditional sports betting. You can effectively ‘buy’ or ‘sell / short’ an event. You can trade it too, choosing when to enter or exit the position, profiting or cutting losses accordingly. There are also thousands of markets to choose from.
It’s possibly the most exciting form of betting in my opinion, as you get a lot of satisfaction seeing the spread move in your favour.
How to Spread Bet on Sports
There are thousands of sports markets available with spread betting, but in this example we will use the Total Goals market in football. What will be the total goals in the game?
Football Total Goals Market – ‘Buy’
A spread betting company may offer a Total Goals spread of 2.8 – 3.0 for a Premier League match between Liverpool and Tottenham. You think the match will be high scoring, so you ‘buy’ for £10 a point at 3.0 . The game does indeed turn out to be entertaining, with the final result a 3-3 draw.
Total goals = 6
6 (goals) – 3.0 (buy price) = 3
Multiply the ‘3’ by your stake of £10 per point = £30.00 profit (3 x 10)
If the game had ended 2-1 to Liverpool, then your bet would have broken even.
Total goals = 3
3 (goals) – 3.0 (buy price) = 0
The total match goals did not go above or below the price at which you bought.
Multiply the ‘0’ by your stake of £10 per point = £0.00 profit / loss (0 x 10)
If the game had ended 0-1 to Tottenham, then your bet would have lost.
Total goals = 1.
1 (goal) – 3.0 (buy price) = -2
Multiply the -2 by your stake of £10 per point = £20.00 loss (-2 x 10)
Football Total Goals Market – ‘Sell’
The spread on a Champions League game between Porto and Juventus looks to be a tight contest. The spread quoted is 2.1-2.3 . You choose to sell at 2.1 for £10 a point. The game does indeed turn out to be low scoring, with a 1-0 win for Porto.
Total goals = 1.
2.1 (sell price) – 1 (goal) = 1.1
1.1 x £10 (per point) = £11.00 profit (1.1 x 10)
If the game had ended as a 0-0 draw, then you would have made more profit.
Total goals = 0
2.1 (sell price) – 0 (goals) = 2.1.
2.1 x £10 (per point)= £21.00 profit (2.1 x 10)
If the game had ended up at over 2 goals, a 2-2 draw for instance, then you would have lost.
Total goals = 4
2.1 (sell price) – 4 (goals) = -1.9
-1.9 x £10 (per point)= £19.00 loss (1.9 x 10)
Test Your Football Market Knowledge
Get a feel for things with the football Spread Betting widget.
Different market options will appear if you click on the teams / market under ‘Choose a Market’. You can pick the Total Goals market, if you want to complement our Total Goals examples.
Live In-Play Trading
A lot of the enjoyment of spread betting comes from watching sports live in-play. In fact long before traditional bookmakers, betting exchanges and even the internet, spread betting live on sports was available over the phone. Spread Betting firms are the ‘OG’ of in play!
Spreads always move during the live sport or event and you can use this movement to arbitrage and trade out of your position:
Here is an example of what I mean, in a Serie A match between Salernitana and Inter Milan, in the Total Goals market.
In this game Inter scored early, in the 6′. You can see a ‘1’ next to the spread quote meaning one goal has been scored.
The curvy ‘c’ just before the spread quote, stands for ‘coupon’. It will link you to all European games (in this case) that are currently available for Total Goals betting. This is specific to Spreadex.
Place Your Spread Bet In Play
Let’s say the game calms down. You don’t think that there will be any more goals, at least not any time soon. You decide to sell. Your bet slip might look something like this:
The slip itself also offers a bit of information. It tells you that ‘so far’ one goal has been scored. It gives you the minimum stake per point, in this case £0.15. Note also it has an ‘Auto-Cashout’ option (more on this later).
You decide to sell for a stake of £5.00 a point.
The match moves on. Time moves on . The score remains at 0-1. Look at the spread now:
..and later still:
See how the spread has moved in, as the match has stayed 0-1 to Inter Milan?
In either of the above two examples, you could have traded out by ‘buying’ at 1.9 or later on at 1.5, to effectively close out your position. In fact, if you were putting in that order over the phone you would just ask to ‘close out the position’. Online, you can simply cash-out.
Closing at 1.9
2.35 (sell price) – 1.9 (buy price) = 0.45
0.45 x £5 = £2.25 profit
Closing at 1.5
2.35 (sell price) – 1.5 (buy price) = 0.85
0.85 x £5 = £4.25 profit
There was one more goal in this game, with Salernitana scoring in the 90′ minute. The game finished 1-1.
2.35 (sell price) – 2 (goals) = 0.35
0.35 x £5 = £1.75 profit
Trading out in either of the above scenarios, would have given you more profit.
Other football markets often available (example Sevilla v Man Utd).
What is Spread Betting? – More Sports
Let’s have a quick look at a couple of examples for other sports. Horse racing and Cricket.
How to Spread bet on Horse Racing – ‘Buy’
We’ll take a look at the Race Index market. In this race there are 11 runners or less.
This market is 50-25-10. Where 50 points are awarded to the horse that comes first. 25 points to the horse that comes second. 10 points the horse that comes third.
Let’s say the Race index spread is 32-35.
You place a £10 bet on your horse, that you think will win. You buy at 35.
Your horse wins.
50 (win points) – 35 (buy price) = 15.
15 x £10 per point = £150 profit
It’s worth noting that with standard fixed odds betting, had your horse been, say, a short-priced favourite at odds of e.g. 1/2 (1.5 decimal). Your profit would only have been £5.00.
How to Spread bet on Horse Racing – ‘Sell’
If you had wanted to bet against the favourite, then you would have sold at 32.
The horse won in this case.
32 (sell price) – 50 (win points) = -18
18 x £10 per point = £180 loss
If the horse had finished in any other position in the race, then you would have been in profit.
32 (sell price) – 25 (2nd place points) = 7
7 x £10 per point = £70 profit
32 (sell price) – 10 (3rd place points) = 22
22 x £10 per point = £220 profit
Outside the Top Three
32 (sell price) – 0 (points) = 32
32 x £10 per point = £320 profit
Test Your Horse Racing Market Knowledge
Get a feel for things with the Horse Racing Spread Betting widget.
Different market options will appear if you click on the racecourse / market under ‘Choose a Market’. You can then pick the Race Index market, if you want to complement our Race Index examples.
How to Spread Bet on Cricket
Perhaps the most popular cricket market is ‘Batsmen Runs’. What will the total number of runs be that a batsman scores. This might be in a single innings, over a full match, or over the whole series.
The spread quoted is 50-55 runs, for an opening batsman in the first innings.
You decide to sell at 50 for £10 per point. The batsman only manages to score 20 runs. You win.
50 (sell price) – 20 (runs) = 30.
30 x £10 = £300 profit.
If the batsman had scored 70 runs in this case, then you would have lost.
50 (sell price) – 70 (runs) =-20.
20 x £10 per point = £200 loss.
Test Your Cricket Market Knowledge
Get a feel for things with the Cricket Spread Betting widget.
Different market options will appear if you click on the market under ‘Choose a Market’. You can pick the ‘Batsman Runs’ market, if you want to complement our Batsman Runs examples.
Cashing Out and Closing Out
Spread betting companies generally offer flexible ways to cash out bets. In one or two clicks you can usually be completely cashed out or partially cashed out. So effectively you are closing your bet or partially closing it. In this way you can minimise your risks by trading out of an event early.
Auto Cash-Out is also available with some companies. This allows you to automatically close your position if it reaches a certain level of profit.
Auto-Cash Out allows you to place bets that automatically close out if your in-play position reaches a nominated level of profit. This is quite useful if you can’t watch an event live or can’t fully focus on the bet in hand.
You can also set up alerts to let you know when an Auto Cash-Out had been triggered.
What is Spread Betting Risk?
It’s important to remember that with spread betting, you can incur losses greater than your stake. This is a fundamental difference when compared to standard fixed odds betting at a traditional bookmaker. It is, however, is all part of the dynamism of spread betting.
The good news is that you can start slowly, by paper trading or by betting only a few pence per point. Some markets will have higher minimum stakes, but these are still well below a pound. You can also trade out of your positions early in most cases, to manage your profit or loss.
You should always understand the market that you are entering into and work out your maximum likely loss and risk that you are willing to take on.
Your sports spread betting stake, opens you up to much more profit or loss in most cases, when compared the same stake in the fixed odds betting environment.
Winnings from sports betting in the UK are tax free. This also applies to spread betting, which is a real advantage.
How to Spread Bet Successfully
Spread betting can be a profitable way to bet on sports, but it requires careful planning and risk management to be successful. Here are some tips for successful spread betting:
- Understand the basics of spread betting : Before you start spread betting, it’s essential to understand how it works, including the margin requirements, the bid-ask spread, and how to place trades.
- Have a plan : Have a good idea of how you want to bet or trade your market. This doesn’t mean you can’t change your plan but it’s good to know what your goals are before you go in.
- Research : Some research and statistical analysis could benefit your overall view of the event.
- Keep your emotions in check : Emotions can cloud your judgment and lead to poor decision-making in spread betting. You should remain calm and objective, even in volatile markets.
- Paper Trade : Use a demo account if it’s offered, paper trade or use small stakes when you first start. This is a great way to test your strategies and gain experience before betting with real money.
- Keep learning : Spread betting is a dynamic and ever-changing area. Keep up to date by reading books, articles and follow experts in the field to improve your skills.
- Stay Disciplined : Spread betting requires discipline, patience, and a willingness to learn and adapt.
Give Spread Betting a Try
If you are interested in trying your hand at sports spread betting, then there are two companies that I would suggest. Both have been operating since the 1990’s and I can recommend them from personal betting experience.
Also, both firms usually have good offers running, to help you get started with minimal risk.
(If you are more interested in Financials, then read my blog on Financial Spread Betting).
What is Spread Betting? Conclusion
Sports spread betting is a unique and exciting form of betting, that offers sports fans a unique way to enjoy their favourite sports and events. With the potential for high payouts and the ability to bet on a range of different outcomes, spread betting is here to stay. Be sure to approach sports spread betting with a good understanding of the risks involved.