Spread betting means that you can bet on a losing team and win! So you actually foresee the result. A bookmaker will offer a ‘spread’ which is, for example, 5 points. You would bet on the conclusion being either above or below the offered ‘spread’.
It is becoming very popular in the U.K. with over one million punters learning to bet this way even though the result seems to be obvious.
The bookmaker will get a commission, and his earnings will come from that rather than monies wagered and so long as the punters are betting relatively even on both sides of the ‘spread’ the bookie won’t be terribly fearful about the result.
So how the spread works is – for example – 5 points is offered as a spread between the favourite red team and the least favoured blue team.
So if you placed a bet on the blue team and their final score plus the 5 point spread gave them a higher score than the red team, you win, easy.
But you lose the bet if the final score plus the 5 point spread is lower than the red team’s score.
The reverse happens if you back the favourite. The red team’s score minus the 5 point spread is still higher than the blue team’s final score you win.
But if you subtract the 5 point spread and that brings the total red team’s score below the blue team then you lose your bet.
So you get a better chance at collecting a bet with the ‘spread’ system than a simple win or lose scenario.
There is always the possibility that teams are not trying to win by a point spread margin, they just want to win. Although there is little evidence on that theory, not all circumstances are the same because teams need to win by the biggest margin possible because that can affect standings for playoffs and future competitions.
And you are not limited to the final score of your game. A bookmaker can offer a spread on corners. Whereby the spread could be offered at 14-15 corners, so if you believe there will be 17 corners and then bet £5 on that assumption you will win £5 on every corner above the spread. And obviously lose if the corners don’t reach that number.
Spread betting on the financial markets is classified as gambling so therefore it is tax-free.
Spread is named because the market price has been wrapped around by the provider. For example, CMC Markets will always sell slightly below the market price and you will always buy slightly above it. And that is the ‘spread’.
You can bet on either the rise or fall of a particular market, but beware, because if the market changes and goes against you, you could lose more than you gambled.
Spread betting on the moving financial markets is much more flexible than the standard sports bet because it’s not limited to exchange hours.
Because there is no single stake to limit monies won or lost you can discuss a limit to a specified amount to stop the losses automatically or a specific take the return number.
This kind of spread betting you the opportunity be involved in the financial markets without having to buy into it and take ownership.
You are in turn given better buying control which will give you better returns. Because you don’t actually own any shares and you are just gambling on the price going up or down, you can determine how much you lose.
But you have to remember the prices quoted on the financial instrument replicate the ‘real-time’ conditions of the market so therefore can move either way very quickly.
However, you can be betting on the falling market prices as well. And if you are prepared to follow it, you can have quite a bit of fun because you can bet on all sorts of market moves, the price of coffee, or gold, cars or any such thing sold in very high volumes.
Even falling house prices will have spread betting and sometimes based on contracts you could place a bet a year or more ahead.