Understanding Spread Betting
Spread betting on sports is much less common than traditional sports betting, for a variety of reasons. It's not as widely available for one thing, because only a small percentage of sports betting sites offer spread betting. Many people also believe it's a very complex form of betting, which makes them not want to get involved.
There are a lot of people that do enjoy spread betting though, particularly in the United Kingdom and some parts of Europe. We wouldn't say it's easy to understand, but it's really not as complicated as people think. It can be very profitable too, if you know what you're doing, and it's a very exciting way to bet.
If you're interested in trying spread betting, then please take a moment to read through this article. We've explained the basics of how it works and provided some examples to illustrate how wins and losses are calculated. We've also discussed:
You can read more about point spread betting on the following page.
Point Spread Betting
The Basics of Spread Betting
Spread betting is basically betting on whether something will happen before or after a set time, or whether the amount of something will be higher or lower than a set number. In this respect it's similar to totals betting or over/under betting.
The way it works is that a bookmaker will set a spread for a market, such as the number of goals scored in a soccer match, and you bet based on that spread. You place a buy bet if you think the number of goals will be higher than the spread, and you place a sell bet if you think the number of goals will be lower than the spread.
You'll note from the above that the spread is a range and not a single number. In this case, the range is 2-3 goals. When buying, your bet is based on the higher end of the spread. When selling, your bet is based on the lower end of the spread. Therefore you need more than three goals to win if buying, and less than two goals to win when selling.
The fundamental difference between spread betting and totals betting is that there are no odds involved. Your wins or losses are based on how right you are, or how wrong you are. If you are right, then you receive a return of your initial stake multiplied by the difference between the spread and the actual outcome. If you're wrong, you have to pay your initial stake multiplied by that difference.
This sounds a lot more complicated than it really is in practice. We'll now use some examples to show how spread betting works in practice, which should make things easier to understand.
Spread Betting Examples
First, let's look at what would happen based on buying or selling the number of goals scored in a soccer match. We'll use the spread mentioned earlier, of 2-3 goals, and work on an initial stake of $10.
As you can see, it's relatively easy to calculate your wins and losses. They will always be in multiples of $10, as that was your initial stake.
You may have noticed that the potential winnings, or losses, aren't particularly big relative to the initial stake. This is because the number of goals scored in a soccer match is rarely much different to the spread. There are other markets where there's the potential to win, or lose, much more.
Another popular spread betting market is on the time of the first goal in a soccer match. The bookmaker sets a spread on the time, and you have to decide whether you think the first goal will come earlier or later than that spread. You buy if you think it's going to be later, and sell if you think it's going to be earlier.
Let's look at some possible results if you were buying or selling minutes on a spread of 26-28. We'll again work on an initial stake of $10. Wins and losses are calculated in exactly the same way but, as you can see, the amounts can be a lot higher.
Hopefully these examples have highlighted that spread betting is really not as complex as it may seem at first. It's actually quite straightforward once you understand the basics. With that being said, spread betting isn't necessarily right for everyone. You should be familiar with the risks involved, as well as the benefits, before you decide whether to give it a try.
Benefits & Risks of Spread Betting
Spread betting offers the potential for winning large sums of money. In some markets, making the right move can result in massive profits relative to the initial stake. For a lot of people this is the main attraction of spread betting, and it's certainly a significant benefit.
However, it's very important to recognize that this potential for winning doesn't come without risk. In the same way that the right move can be very profitable, the wrong move can be disastrous. You can lose your initial stake many times over if things don't turn out as expected.
This is why we advise caution when trying spread betting. With the right approach it can be very profitable, but you have to be very careful not to expose yourself to a high level of risk. You should start out with small stakes, and employ very strict bankroll management rules.
There are some other benefits of spread betting as well. There are certain markets you can bet on that are simply not possible with traditional sports betting, and this can mean extra opportunities for making money. It's also possible to close a position early, halfway through a match for example. This may allow you to limit your losses if an event isn't going as you expected. It may also allow you to lock in some profit if things are working out well for you.
It's not for us to tell you whether you should get involved with spread betting. That's a decision you'll have to make for yourself. There are definitely some benefits, and it can be an incredibly exciting way to bet, but it can be costly if you make too many mistakes. You must weigh out the benefits and risks to determine whether it's something that appeals to you or not.
Author: Brad Johnson
Updated: March 2015
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