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Have you ever tried spread betting? If the answer is no, be assured you’re in good company. Because spread betting looks so different to straight forward sports betting, many bettors choose to steer clear. But once you understand a few simple rules, you can take advantage of spread betting to win big.
Let’s use football to see how spread betting can work.
In spread betting, the bookmakers make an estimate of what they expect the exact outcome to be e.g. the exact time of the first goal.
The market would look something like this:
Market | Quote | Action | |
Time of first goal | 22 - 25 | Sell | Buy |
So the bookmakers think that the first goal will occur sometime between the 22nd and 25th minute.
If you think that they are right, you don’t bet. If you think they are wrong, you decide on a stake (the amount you are willing to bet) and then either Buy or Sell.
If you think that the goal will occur in less than 22 minutes, you Sell. If you think that the goal will occur after more than 25 minutes, you Buy.
Here are the different ways this could turn out:
| Sell with £10 stake |
|
|
| Buy with £10 stake |
|
¦ |
|
¦ |
|
¦ |
|
¦ |
Actual result: 1st goal at 16 minutes |
| Actual result: 1st goal at 36 minutes |
| Actual result: 1st goal at 16 minutes |
| Actual result: 1st goal at 36 minutes |
¦ |
| ¦ |
| ¦ |
| ¦ |
Formula for Return: lower end of market quote – final result x stake |
| Formula for Loss: final result – lower end of market quote x stake |
| Formula for Loss: upper end of market quote – final result x stake |
| Formula for Return: final result – upper end of market quote x stake |
¦ |
| ¦ |
| ¦ |
| ¦ |
Return = |
| Loss = |
| Loss = |
| Return = |
So in spread betting, you can win very big but you can also lose much more than your initial stake. In fact, the potential losses can be very high in certain markets. For example, if you chose to sell on a spread bet market regarding the number of runs achieved by a cricket team, you could easily end up losing a very high multiple of your original stake.
For this reason, most spread betting bookmakers offer a Stop Loss account. With a Stop Loss account, the bookmaker limits the maximum stake you can place and also imposes the maximum that can be won or lost e.g. £100. The limit depends on the volatility of the market. This has the benefit of putting a cap on the amount you can lose, but has the downside of also limiting the maximum you can win.
Stop Loss accounts are a particularly good idea if you are just starting out with spread betting but there is still a substantial risk of loss, so do take time to research the market fully, as you would with any bet, before placing a stake.