What is Spread Betting?

What is spread betting, is something I have been asked a lot. Spread betting on sports is basically deciding whether the prediction offered by a particular bookmaker on a certain sports event is either too high or too low. If you think the quote is too low, you would ‘buy’.

The difference between spread betting and a traditional ‘fixed odds’ bet is that the more you are correct, the more you win. Conversely, the more wrong you are, the more you can potentially lose. This is where the skill comes into play, along with the knowledge of the markets you are betting in.

A Worked Example


A typical and easy to understand example of spread betting is as follows.

England are playing South Africa in a test match and you think that Alastair Cook is due a huge score, therefore, you check out the quotes being offered. You see that Sporting Index are offering a quote of 83-90 (for both innings), and as you are confident that Cook will get plenty of runs, you decide to ‘Buy’ at 90 for £5 a point.

You are correct, and Cook goes on to score 175 runs in the test match. That means that your profit is £425 ((175-90)*5).

From this example, you can see the power of spread betting, if you are armed with the knowledge and statistics to make informed decisions.

Please see below for a glossary of some common terms involved in spread betting.

Aggregates

Aggregates are a group of specials whereby we predict the total number of instances (such as goals) across a group of matches.

Buy
To bet high – a trade that the result will be higher than the current market price. The opposite of sell. The higher figure of the two figures quoted in the spread.

Credit Account
An account with a pre-agreed trading credit limit settled at the end of an agreed period.

Deposit Account
An account where sufficient funds have to be deposited before placing a bet.

In-play
Betting once an event is underway on markets that are constantly updated for the duration of the event. Also known as ‘in-running’. See also Live Event Betting.

Limited Risk
A limited risk account ensures that no bet can be placed and accepted without sufficient funds being available in the account to cover the worst possible outcome.

Live Event Betting
The term used to describe when an event is actually in progress and betting is available.

Long-term markets
Markets in which the final result is more than seven days after the date at which the initial bet is placed.

Make-up
The result on completion of an event or series of events. For example, if Manchester Utd beat Liverpool 3-1, total goals would make up at 4. See also Maximum Make-up and Minimum Make-up.

Margin
An additional deposit requested to cover the maximum risk of an open position that is going against you. Hence the expression ‘margin call’ which is a request for a margin payment.

Maximum Make-up
The maximum limit on the potential margin of victory or defeat, applied in certain markets to limit the client’s and the spread firm’s maximum risk.

Maximum Risk
The maximum possible that a client may lose through a bet.

Minimum Make-up
The least amount at which a market could make-up. On a supremacy bet this is, in theory, unlimited, but on a batsman’s runs it’s zero.

Risk
The funds that could be lost from placing the bet. The more volatile a market, the more risk associated with the bet.

Sell
The opposite of buy. The lower figure of the two figures quoted in the spread. See also Short (For example in cricket a client is short of England runs if he has sold England runs.)

Settlement
A bet is settled once that bet has been closed. Can also refer to the final result which dictates the make-up.

Spread
The difference between the higher (buy) and lower (sell) prices quoted by a spread betting bookmaker.

Stake
The amount chosen by the client to bet per point.

Stop Loss / Stop Win
An agreed boundary on a spread bet – no more can be won or lost beyond this agreed level. These will vary according to the volatility of the market.

Supremacy
A market based on the margin of victory separating two competing teams or individuals. One team or player’s dominance over another. For example in rugby union, England/Wales supremacy might be quoted at 7-9 meaning Sporting Index expect England to beat Wales by 8 points.

Tick
When decimals are used to add volatility to a market, a ‘tick’ is each decimal point.

 

If you would like further clarification on the above, or have any questions about Spread Betting in general, please leave a comment below.

9 thoughts on “What is Spread Betting?”

  1. Max,

    A great example of spread betting. My lack of knowledge has kept me from waging many a bet, but your post has changed that for me. Thank you for posting.

    1. Thanks, James, that’s very kind of you to say. We have an excellent group here and are continuing to improve our profits each month.
      Regards
      Max

      1. anthony jackson

        Hi. I have dabbled before. But no sooner I dabbled I quit. You do need someone to help I think. So I think I will give it a go. With the cook match – how much would the loss have been??? Or was there a sell option in case it goes the wrong way.and what about your previous results. Are we able to see proof of 25+ points you are promising. Thanks

        1. Hey Anthony

          Spread betting is definitely something that if you are involved with you need to have the stats to back up your selections. One of my favourite markets is on the national hunt horse racing, and with nearly three years worth of stats is it almost 3,000 points up, and that’s just blindly betting one way. If you are selective like I am, then the returns are even greater.

          With the cricket example, if Cook had scored zero runs in the match (both innings), then the loss would have been 83 points. However, these kind of results are extremely rare and betting on player runs is not something I do, that was just there as an example.

          I can assure you that you won’t be disappointed if you decide to subscribe.

          Kind regards

          Max

          1. anthony jackson

            Hi. Just like to say with response to my earlier mail. Will there be midweek bets. And is it set and forget . So we don’t need to be there for in play.i am on vacation till Monday but rest assured I am looking forward to joining.thanks.

          2. Hey Anthony

            Yes, I will definitely be making selections to trade mid-week, especially as national hunt racing kicks back into action next week The selections I go for will always be on a set and forget basis, as the stats are there for completed matches.

            I look forward to welcoming you aboard, Anthony.

            Have a great weekend!

            Max

  2. Hello Max,

    You mention Sporting Index but no other companies. What are these other companies and can just having Sporting Index account suffice.
    Also you were asked about the size of betting bank but I cannot see any reply to this.
    Yes it will depend on an individual person, but an indication would be very helpful.
    Regards,
    Brian

    1. Hey Brian

      Spreadex and Star Spreads are two other companies that are available to use. I hadn’t mentioned them yet as I am negotiating with them to get an improved sign-up offer.

      A bank of a few hundred pounds would be sufficient to start with (obviously depending on the size of your staking), and this would allow you to build it up from there.

      As mentioned previously, if you haven’t tried Matched Betting before then I definitely recommend that (check out the Matched Betting page on this website), as this will give you a bank of £750-£1,000 in a very short space of time with no risk.

      If I can help with anything further please let me know.

      Regards

      Max

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