Spread betting on Sport opens up a whole new world of betting opportunities, but the added risk and bewildering array of figures turn many ‘traditional’ bettors away. With a little help however, most punters will be able to spread bet with confidence and with a huge range of markets available, many will find a betting niche that can be profitable long term. Take the first step to spread betting success by reading our beginners guide…
Sports Spread Betting Basics
Sports spread betting will not suit everybody. The reason for this is simple, the initial stake is not the total sum that can be lost in that single bet. In a traditional fixed odds football bet, a £10 bet will cost £10 if it loses. Very clear, very easy to understand. Spread betting however hinges on the bookmakers ‘spread’ and the difference between this and the final real life outcome. If the difference is 4 on a losing bet, then the cost to the bettor will be 4 times the initial stake – continuing our comparison with the fixed odds example above, 4 x £10 = £40. On the flip side, the same amount could be won.
Let’s run through some examples to clearly demonstrate the mechanisms at work. The simplest spread in football is the goal supremacy market – it basically means the difference in goals between the teams come the end of the match. So an actual final score of 3-0 would be settled at 3, 3-1 would be 2 and a draw would be zero for example. The bookmaker will list the teams in order of favouritism (not home then away as on a football coupon), this denotes the direction of the spread, so the odds may appear as;
Manchester United / Arsenal Sell 1.1 – 1.3 Buy
This illustrates that the bookmaker says Manchester United are favourites, and they expect them to win the game by 1.1 to 1.3 goals. Fractions of goals tend to confuse bettors, so let’s work through some sample bets on the above market.
Bettor ‘A’ thinks Arsenal will play well, and are worth a punt. They might force a draw or even sneak a narrow win. He would ‘Sell’ United at 1.1. If Arsenal did force a draw, the market would be settled at zero (The difference in goals between the teams) and the bettor would win his stake times 1.1 (The difference between his ‘sell’ price and the actual outcome).
Bettor ‘B’ thinks United are too classy for the Londoners and sees them winning comfortably. He ‘Buys’ the Red Devils at 1.3 for £10. Arsenal put up a good showing and hold United 1-1. Again, the market is settled at zero, so our better loses 1.3 times his stake – £13.
Let’s look at the same two bets after a thumping 5-0 win for United. For the sake of the example, bettor ‘A’ staked £5. His ‘sell’ of the Reds backfires. 5 goals, minus the sell price of 1.1, equals 3.9, so our man loses 3.9 times his stake, or £19.5
‘B’ fares much better. His buy at 1.3 wins him 3.7 times his stake (5 goals, minus the 1.3 buy price), a handsome win of £37.
A goal supremacy market can be ‘settled’ at a negative figure, this occurs when the team deemed underdogs by the bookmaker (listed second) win the match. If Arsenal sneaked a 1-0 away win, the market effectively settles at ‘-1′. So the ‘Sell’ on Arsenal would win 2.1 times the stake (The difference between -1 and 1.1). Likewise the United ‘Buy’ would cost 2.3 (-1 to 1.3 = 2.3). Spread betting firms will normally flag up any markets where it is possible to have a negative result for the make-up.
In a goal supremacy market the volatility is kept to a fairly low level. Winning margins greater than 4 would be rare so the bettor would have some feel for the maximum amount they might win or lose. Other markets could provide much greater volatility – cricket runs for example.
The bookmaker offers;
England 1st Innings Runs versus India Sell 290 – 320 Buy
A stake of £1 could end up settling at a figure way in excess of £100. Let’s say a gambler thought England would rack up a big total on a flat wicket and ‘bought’ England at 320. He stakes £1. When England finally declare at 710 for 7, he has pocketed a £290 profit. Sounds familiar? This was the score England posted in the 3rd test at Edgbaston this summer – it happens!
Before racing out to back England at every opportunity, they have also been skittled for 46 by the West Indies – the same total would have cost our man 320-46 = £274.
So as we have seen, a spread bettor must be absolutely on the ball when setting his staking levels, and he must judge with a fair degree of accuracy what his best case and worst case scenario is for any bet. It is the only way to both judge value, and to control the level of investment.
The spread itself represents the bookmakers profit, or margin, that is why the bettor ‘sells’ at the lower price and buys at the higher price. Firms are competing against one another for business, and this generally keeps spreads as tight as they can be, the difference will of course, depend on the volatility of the market and potential make-ups (final settlement totals).
While spread betting is high risk, in exactly the same way, it is high reward. There is a whole raft of new markets opened up via spreads, and a disciplined punter can take advantage of them. From bookings indexes, to shirt numbers, the array of options increases exponentially once the bettor has a grasp on spreads. In future articles we will look at specific markets, giving full explanations of how the ‘make-up’ is calculated and also at the best ways to win.