Spread betting is a form of wagering that rewards – or penalises – the accuracy of a prediction, as opposed to traditional fixed odds betting that usually relies on a simple win/lose dynamic. Some firms have sort to simplify spread betting by referring to it as high/low betting and that is a good starting point for us.
If we take football as an example, with a spread bet you are predicting if the actual outcome or result will be higher or lower than a range, or spread, given by the bookmaker. If Stoke are playing against Hull (first, if they are, I won’t be watching) then the bookie might offer a spread of 2.2 to 2.4 for total goals. This relates to the total goals in the game and you can either “buy” at 2.4 – that is say there will be more than 2.4 goals – or “sell” at 2.2 – that is say lower than 2.2 goals in the game.
Disadvantages of Spread Betting
One crucial thing to note with spread betting is that you can lose more than your stake. Assuming you sell goals for £10 in the example above at 2.2, expecting a low scoring game. If the match ends 0-0 the “make-up” is 0, meaning you win 2.2 minus 0 = 2.2 multiplied by your stake, so £22.
However, in the unlikely event that it is a thrilling 3-3 draw the make-up would be six, meaning your calculation would be 2.2 minus 6 = -3.8 – multiplied by £10 this would give you a loss on the bet of £38.
Advantages of Spread Betting
Spread betting is great because unlike with fixed odds betting where your bet can be over very quickly, most spread bets maintain an interest for the full duration of the event, as the number of goals or points or games or the amount a team wins or loses by will make you win more or less. In the example above, assuming you bought goals, that is, went higher than 2.4, even if the game is 0-0 in extra time, any goal will still win you £10, even though you would need three to actually avoid an overall loss.
As said, the main thing to remember is that whilst you can win very big on some events, you can also lose a lot very quickly. Some markets are more volatile than others, for example total goals is a fairly “safe” market as the range cannot go below zero and is unlikely to go much higher than five, although of course even in football you have freak games where 10 or more goals may be scored. However, other bets, such as a batsman’s runs in cricket could reach 100 or more, potentially costing you many, many times your stake if you predicted the batsman would fail.
Regulation of Spread Betting
Partly for this reason, spread betting is regulated by the Financial Conduct Authority rather than the Gambling Commission, although all profits remain tax free as with traditional gambling. The FCA involvement is also due to the popularity of spread betting on financial markets such as shares, currencies and commodities and also means spread betting firms are more likely to allow bets to be made on credit.
Spread betting is relatively new compared to fixed odds betting but is growing in popularity, in part due to the many generous free bets and bonuses offered by spread betting companies. It is very well suited to betting in-play, offers a greater degree of flexibility than standard wagering and also offers a much wider range of specials markets that can make for very exciting gambling. As long as you ensure you understand the mechanics behind it we thoroughly recommend giving spread betting a try. It offers some great opportunities, is simple to follow once you grasp the concept and is great fun.