Spread Betting

	Spread betting is the nearest thing in gambling to Bruce Forsyth’s Play Your Cards Right.

Twenty years ago, make-up, supremacy and mid-point was a foreign language to most UK sports punters. Nowadays, they are commonly used terms through the widespread business of spread betting.

It was nearly two decades ago that Jonathan Sparke, former boss of City Index, launched sports spread betting to the nation. Sparke was the pioneer for sports spread betting in this country – he launched his new venture in 1986 and it was followed by Sporting Index six years later, in 1992, with IG Sport following in their footsteps in 1993.

In the last six years, City Index has ceased to offer sports spread markets, but three other firms – Spreadex, Cantor Sport and Sports Spreads – have joined the sports spread betting merry-go-round.

If, however, you are a newcomer to spread betting, then you haven’t necessarily missed out. If you have waited almost 20 years to open a spread account, it could prove to be a wise move. In the past, the main criticism aimed at spread betting firms was that they never made their product accessible to the average Joe in the bookies. The spread betting game was a rich man’s game made up of ex-City traders and those who could take the occasional big loss.

Now, finally the spread firms have lowered minimum stakes. In order to attract a wider betting audience many have launched sister websites to accommodate smaller punters. These days spread betting is a choice of punting that many previously unwilling to try it are taking up.

If you, like many, fancy a spread bet but have never quite understood it, remember this: spread betting is the nearest thing in gambling to Bruce Forsyth’s Play Your Cards Right. You, the punter, face one question and the answer is: higher or lower? The more frequently you are right, the more you win; the more often you’re wrong, the more you lose. For sheer adrenaline-charged excitement, it sure beats the straight win/lose scenario of fixed-odds betting.

Sports spread betting basically splits into three groups:

Total Bets

These are decided by the total number of times in a sporting event an eventuality happens, such as corners in a football match, aces served in a tennis game, or runs is a test match.

Chelsea are playing Arsenal and the corners spread is set at 10-11 – this is the bookies’ prediction of how many corners there will be in the match.

You fancy more than the price so you buy (higher) at 11. You are proven correct, because there are 14 corners. You bought at 11, there were 14, so the difference is 3.

Profit at a £10 stake is 3×10=£30

Supremacy and Match Bets

The main point of this bet is not necessarily that your teams wins, but by how many points.

England are playing Scotland in the Six Nations. The bookies price it up at 46-50 – this is their prediction that England will beat Scotland by between 46 and 50 points.

You think the match will be closer than the spread suggests so you sell (go lower) at 46. You still think England will win, but the odds of 1/10 in the high street don’t appeal. However, England are in sublime form and win 60-3.

You sold at 46, the make-up (result) was 57 (the difference between 60 and 3), so you are 11 points ‘wrong’.

Loss at a £10 stake is 11×10=-£110

Performance and Index Bets

These markets award points values to the winner, runner-up, third and sometimes even down to eighth in a football division or positions in a horse race, and so on.

The most common examples come at horse race meetings every day. Spread firms offer a performance index on the favourites for the day and the jockeys competing.

They both work on the same principle. Winner =25pts; runner-up =10pts; third =5pts. If there is a joint favourite, you are on the lowest racecard number.

Frankie Dettori is riding at Ascot and has six rides. The spread on his performances for the day is 46-50.

You think he will collect more points based on the index scoring system than the spread suggests – you buy the spread at 50.

Dettori has two winners, two seconds and the rest of his rides are out of the places. The winners both score 25 points and the seconds score 10. So the make-up (result) is 70. You bought at 50 and the make-up was 70, so the difference is 20.

Profit at a £10 stake is 20×10 = £200

That is basically how it works. It doesn’t explain, though, what the advantages are for a punter. Why open a spread betting account? The excitement – and risk – of big winnings and losses is what appeals to many punters, but this betting medium comes into its own when the favourite on the fixed odds markets are virtually unbackable.

If England play Romania in rugby union, everyone knows England will win, but will they do so by between 98 and 102 points? In a football match when England play the Faroe Islands, England are 1/10 to win the match, but will they win by five goals?

That is where spread betting offers punters the best value. If you research your bets properly you can work out when to buy and when to sell, and it adds interest to betting on an event where the winner is predictable.

Be aware, for example, that more people buy than sell. The spread market makers know there are going to be a lot of buyers – because 65 per cent of all sports spread betters buy rather than sell – so on markets the spread is always inflated too high.

This is useful knowledge. It means the markets are swung in favour of people who sell. In horse racing if, for example, you sell winning lengths at every meeting throughout the season you will make money (lengths are the difference between fi rst and second in each race of a meeting). Also if you sell corners in every live game in the Premiership this season you will make money. Sure, you will walk into the odd disaster but gambling is all about patience and the profits will roll in at the end of the season.

Better spread than dead

Another key rule in spread betting is to go against the norm. In the earlier rugby international example, nearly everybody would back England to beat Romania so the spread on points supremacy moves from 98-102 to 106-110. The dealer thinks the price is worth 102, but as the weight of money has seen it rise, this is the time for you to step in and go against the trend by selling at 106.

In spread betting the in-running service is equally important. Most firms offer betting when the event is in play, allowing you to take a profit or limit a loss at any time. For example, you may buy corners before the game at 11-12, but if there are eight corners in the first-half, the spread will move to 15-16 at half-time. You can close your bet by selling at 15 at half-time, thereby guaranteeing yourself a profit of three points.

The main skill in-running is knowing when to get in and get out. This is a skill in itself, because ever since betting exchanges were introduced a new form of gambler has emerged. People aren’t gamblers any more – they have become traders. They get in and get out as soon as they can make their £100 profit.

High risk, high returns

This can’t happen all the time so you must remember to cut your £100 loss when it goes against you as well. Spread betting is a high-risk form of gambling because for every big winner there is a big loser. When you place a bet with a fixed-odds bookie you know exactly what you are going to win or lose but with spread betting it’s not that straightforward. A £10 buy of the corners is not the same as a £10 buy of the runs in the test match – obviously there will be many more runs in cricket than corners in football, so the volatility of the market is much greater.

Always look at how volatile the market is or ask the trader what the stop-loss is, which limits what you win or lose: corners have a stop loss of 10, so a £10 buy is a £100 maximum bet. Cricket team runs have a stop-loss of 200, so a £10 buy is a £2,000 max bet. Spread betting is still the most fun form of gambling out there but be careful. Spread bets carry a high level of risk to your capital. Only speculate with money that you can afford to lose. Never has a truer word been said.

How to get started

At the time of writing if you open an account with Sporting Index, after five settled bets you will receive a £100 supremacy bet on a football match. After another five settled bets they will give you another £100 free supremacy bet on a football match. Over at IG Sport you will receive a £100 supremacy bet after five settled bets.

Did you know?

Unlike traditional high-street bookies, soccer gives spread firms its biggest revenue, taking more than a 60% share of the business. Horse racing comes in a distant second at around 20% but figures are falling because of the rise in popularity of betting exchanges. The increasingly popular sports are rugby union, rugby league and cricket in particular. There is no real reason why cricket is so popular – the most obvious theory is that of all the hundreds of markets spread firms offer it’s the most simple to explain in terms of cricket. The spread on England runs is 400-420. Will they do better? Buy at 420. Will they do worse? Sell at 400. Job done!