Sports Spread Betting Explained
Spread betting is a completely different animal to the kind of betting that you are probably used to and perhaps more than with any other type of betting, it is important that you know exactly what you are doing before you even think about parting with any of your hard-earned cash.
To begin with and what many punters who get involved with spread betting don’t realise is that when you open a spread betting account, the registration form that you have to complete is about as different to signing up with a sportsbook as it is possible to get so when asked to define spread betting, you get a pretty good idea that it is a little more complex than the kind of betting you are used to.
You have to state your occupation, salary, net worth and all sorts of other personal information and the spread betting company will also carry out a credit check on you before they will even consider allowing you to open an account.
So, it would be fair to say that if your credit record is not all that good, you may struggle to open a spread betting account.
The reason why these extra checks are carried out is because with spread betting if the market moves against you, you will receive the dreaded ‘margin call’ which is where the spread betting firm will contact you and ask you to deposit more funds into your account in order to cover your position.
It should also be noted that if a position moves against you and you don’t have the funds to cover it, the spread betting firm can chase you through the courts in order to recover the funds.
When you open a sportsbook account, it is based on the old-fashioned gentleman’s agreement, and the way that the best sportsbooks work is that you can’t bet more than your available funds anyway.
Even if you are laying a bet on a betting exchange, you still can’t have a liability which is greater than the funds in your account.
Spread betting originated in the financial markets, and you will see that many of the spread betting firms will have both financial sports betting options available for their clients.
The Best Spread Betting Companies
When it comes to opening a sport spread betting account, the two that you should concentrate on are Spreadex and Sporting Index.
They are both extremely friendly when it comes to punters who are new to Spread betting, and that can make a big difference should you have any questions.
There is nothing worse than asking a question and being made stupid for asking the question, customer service like that is unforgivable, but thankfully, Spreadex and Sporting Index are both helpful and friendly.
Some of the more traditional spread betting companies seem to be more used to financial trading and have started a sports section to get a share of the market, and whilst there is absolutely nothing wrong with that, they should realise that some bettors are getting involved for the first time and would sometimes appreciate a little help.
Something to bear in mind with spread betting companies as a whole is that it serves them well if you stay with them for the long term and that will happen if you make regular profits.
Unlike the traditional bookie who is using their judgement against yours in terms of odds setting etc., spread betting firms make their money from the spread (which we will talk about later), so if you win, it won’t really be affecting their overall profits.
What Is Spread Betting?
Spread betting is where two options are given on one of the thousands of sporting markets, and the punter chooses one of these options and either buys or sells it.
Let’s look at an example which will explain the process a little more clearly.
It is the beginning of a football season, and you expect Norwich City to perform well in the Championship this year.
You log into your spread betting account and see that there is a market relating to how many points all of the Championship teams will reach by the end of the season.
You think that Norwich will be looking at 80 points, so your eyes light up when you see that their spread is 65 – 67.
You decide to place a trade of £20 per point, so you buy Norwich on the total points market at 67.
This means that every point that Norwich gain over 67 will be multiplied by your stake of £20.
So, if Norwich racks up 80 points over the course of the season, you will be looking at a profit of £260 (80 – 67 =13) – 13 x £20 = £260.
If Norwich encountered a poor season though and only accumulated 50 points, you would be looking at a loss of £340 (67 – 50 = 17) 17 x 20 = £340.
Just in the same way where a sportsbook offers multiple markets for a single football match, the same is true with spread betting and don’t forget, again just like a traditional sportsbook, they offer betting opportunities on more or less every major sport that you can think of.
Spread Betting Trading
As you can probably imagine, there are multiple opportunities to trade with spread betting, but again, it is imperative that you know exactly how the markets work before you get involved.
If you are interested in sports trading for the first time, it would probably be a far better idea to start off with trading on the betting exchanges and see how you go from there because if you jump straight in with spread betting trading, you will be in for a very steep learning curve.
One of the most popular aspects of spread betting trading is spotting arbitrage opportunities, and they are far more common than you might think but to do this, you will need to open at least two spread betting accounts.
It is also possible to buy a position on a spread betting sporting market and lay it on a betting exchange, but this can prove to be extremely complicated and way beyond the remit of this article.
Always Consider the Worst-Case Scenario
As with any form of betting, it is easy to come to an opinion over the outcome of an event and get a little carried away in terms of how much you stake.
This is always a bad idea, but the difference with betting on spread betting is that if the market moves against you, you could be in big, big trouble.
Let’s look at the Norwich City example again.
You are absolutely convinced that Norwich are going to run away with the Championship title, you have been to all of the pre-season matches where they were outstanding, and you know that the management team are confident that they will do well.
You decide to buy in the total points market at £500 per point at 67, mentally counting your winnings and working out where you are going to go for that luxury holiday, paid for courtesy of Norwich City’s brilliant season.
After the first ten games of the season, though you realise that there is a problem, Norwich have sacked their manager, and they have only two points from a possible thirty.
The market is quickly moving against you, and you get a call from Spreadex informing you that you will have to deposit another £5000 into your account.
You are already looking at a loss of £4500 your bet has gone from something that excited you just by thinking about it to being a complete nightmare.
The moral of this story is to only bet with money that you can afford to lose and be careful that you work this figure out in the correct way in relation to the overall liability if the bet ended up as bad as it possibly could do.
If you start with small stakes, you will be able to learn exactly what is spread betting and what’s more, you will be able to sleep at night.
Should You Consider Getting Involved in Spread Betting UK
If you do decide to get involved with spread betting, realise that there is a learning curve involved and that you would be advised to start off by using small stakes.
The two spread betting companies we have mentioned, Spreadex and Sporting Index both have lots of training available for their customers so take it nice and easy and make the most of this high-quality training because it would cost you if you were accessing this training from the open market.
Understand that your losses can be high if the market moves against you, but at the same time, if you call a sports betting market correctly, you could experience some very large wins.
So, to sum up, tread carefully, and you never know, getting involved with spread betting could be one of the best business decisions that you have ever made.