What is Spread Betting?
Do you love football betting, analysing games and living every moment? If you answered yes, then spread betting could be a great alternative to fixed odds betting for you! If you answered no, well, spread betting could still bring lots of excitement to your betting!
As with fixed odds betting, you win when you guess correctly with spread betting. However, there’s an added extra! The more correct you are, the more you win!
This is how spread betting differs from normal betting
Let’s say you bet on there to be 2 or more goals in a game. With a fixed odds bet, you win once there are 2 goals.
With spread betting,
you win once there are 2 goals,
…but if there are 3, you win more!
If there are 4, you win even more!
If there are 5, you win even more!!
…and so on!
Spread betting is effectively like financial trading – you win with every “unit” increase, be it a goal, booking, corner, or point. You are actually placing your bet on every increase (or decrease), again exactly how you would with stock trading.
What do the odds mean?
This scary expression is what the “odds” typically look like in a spread bet:
This is referred to as the “spread” rather than odds, and again, it’s a bit like trading on financial markets. If you think the outcome is going to be lower, you place your bet on SELL/the lower number. If you think the outcome is going to be higher, you place your bet on BUY/the higher number.
SELL 1.6-1.8 BUY represents a spread you might see for the “2 or more goals” bet we mentioned above. It looks confusing because of the decimals, but don’t let this unsettle you. Simply round the number up or down to see more clearly what outcome you are betting on. 1.6 would mean that you are betting on 1 goals or less. 1.8 would mean that you are betting on 2 goals or more. The spread moves up or down within decimal numbers so that the spread betting company can also make a profit on the bet (more on this later).
Spread betting has many advantages over traditional fixed odds betting. If you’d like to be convinced, jump to our summary bottom of this page.
Simple spread betting example
When you place a bet you are normally placing it with fixed odds, e.g. 1.5 or 1/2. You place this bet on a win or lose outcome and you either win or lose it. Your winnings are calculated from the odds and the amount you stake. So if you bet £10 for Manchester United to win at 1.5 (1/2) and they do, you win 1.5 x £10. If they lose or draw, then you lose your £10 stake.
However, fixed odds often create a market where most people bet for the better team. E.g. if Manchester United played Birmingham, most people would bet on United to win. One of the advantages of football spread betting is that it creates an active market for both sides of a wager by creating bets out of smaller usually less significant events in a game.
An easy example to start with is the following: Imagine that you were asked to guess the weight of your friend Bob. The spread betting company might make a prediction of Bob’s weight as less than 70kg or more than 71kg. This would be expressed as SELL 70-71 BUY. To the spread betting company this is known as the spread. You then decide whether you think Bob is actually heavier or lighter than these values. You will win money on every kg (unit in financial trading) increase from the spread betting company’s predicted spread.
You want to bet £10 and estimate that Bob is around 74kg (more than the predicted spread). In this case, you would BUY, placing your £10 bet on 71kg.
Now let’s say that you were correct and Bob did indeed weigh in at 74kg. You won your bet, so how do we calculate your winnings?
First, you find the difference between the outcome (74kg) and the price that you bought at (71kg). You then multiply this by your stake (£10).
74-71 = 3.
3 x 10 = £30. You have won £30!
At the same time, Bob’s sister thinks he’s much lighter and SELLs at 70kg with a £10 bet.
Unfortunately she guessed incorrectly and lost her bet. In spread betting, it’s possible to lose more than your original bet.
We can work out how much she lost using the same calculation as before:
The difference between the outcome (74kg) and the price she sold at (70kg). Then multiply this by the stake (£10).
74-70 = 4.
4 x £10 = £40.
Bob’s sister has lost £40 on her bet.
The spread betting company pays you your £30 winnings and has made a £10 profit itself! That’s the idea behind spread betting and why a “spread” is used instead of a single fixed number. If the buying and selling price were the same number, the winner would get what the loser lost, and the spread betting company wouldn’t be able to profit from the service.
Buying and selling like we just did with Bob’s weight is often referred to as trading. When dealing with football, the spread range can represent goals, time, points or just arbitrary units given to events in a match.
Popular football spread bets
You can bet on most things with football spread betting. The following are some of the more popular markets.
- TeamA/TeamB supremacy – Winning goal margin.
- Total goals – Total goals in the game.
- Shirt numbers – Aggregate shirt numbers of all scorers.
- Corners – Total corners in a match.
- Bookings – Total bookings points in a match. Yellow given 10 points and red 25 points (SpreadEx)
- Total goal minutes – Aggregate minutes of goals scored in a match.
- Team X to win match – Winning gives the team 100 points. A loss or draw, 0 points. The spread will fall between 1 and 99 (spreadEx).
- Team X to draw match – Drawing gives the team 100 points. A loss or draw, 0 points. The spread will fall between 1 and 99 (spreadEx).
- Team X performance – Points given for win (25), draw (10), goal (15), clean sheet (10), corner (3), yellow card (-5) and red card (-15) (spreadEx).
The points for arbitrary points markets can differ between companies.
Football Spread Betting examples
Supremacy spread bet
One of the most popular football bets is the supremacy bet, seen in the list above. This market is basically asking you to predict one teams dominance over another by predicting the winning goal margin.
When you bet on a winning goal margin. You will see a spread like this:
Liverpool/Swansea >> SELL 0.4 – 0.6 BUY
With this bet, you basically BUY if you think Liverpool will score more goals than Swansea, but SELL if you think it will be the other way around and Swansea will score more goals than Liverpool.
Let’s have a look at how it works out with a £10 bet and theoretical 4-1 win to Liverpool.
Goal difference >> 4-1 = 3 goals difference.
3 goals – 0.6 BUY price = 2.4.
2.4 x £10 = £24 winnings.
3 goals – 0.4 SELL price = 2.6
2.6 x £10 = £26 loss.
Liverpool to win
Betting on whether a team will win in a match is not as popular as in fixed odds betting, but there are still markets for it and it’s usually referred to the win index.
Because winning and losing aren’t results that you can make a spread with, they are assigned points. At SpreadEx, a win gets 100 points, while a draw or loss gets 0.
This is the spread for Liverpool to win their game against Swansea.
SELL 46.6 – 51.1 BUY
With a £10 on a market like this, you can probably already see that it could end in a big win or loss. It’s markets like the Win Index that make it important to understand how to manipulate your stake to not lose out if your bet loses.
If you think Liverpool will win and BUY at 51.1, then they go on to lose, with a £10 bet you will lose big!
Here’s how it works out: 51.1 BUY – 0 points (for losing) = 51.1
51.1 x £10 stake = £511 loss!
It’s for this reason that in a market like the Win Index you should use lower stakes if you can’t afford a big potential loss.
The same example with a £1 bet would work out like this:
If Liverpool don’t win (draw or lose), 51.1 BUY – 0 = 51.1
51.1 x £1 = £51.1 loss.
If Liverpool win, 100 points (for winning) – 51.1 BUY = 48.9
48.9 x £1 = £48.90 win.
As you can see, the loss with a £1 bet is a bit more acceptable, but you should still make sure you can cover any potential loses.
Buying is always safer when spread betting
As we just mentioned, the high profit advantage of spread betting also means that there is a risk of losing more than your initial stake.
Buying is much more popular than selling because it’s considered safer and also more exciting.
You always know how much you could lose when buying
If you BUY, then you know what you could potentially lose by multiplying the number you buy at by your stake. So if the spread was SELL 2 – 3 BUY and you chose to bet £10, then the maximum you could possibly lose would be £30.
3 x 10 = £30 loss.
This makes sense because the minimum possible goals in a match is always going to be 0, so in the worse case scenario, you bought at 3 and there were 0 goals.
3 BUY price – 0 goals = 3 >> 3 x £10 = £30 loss.
However, if you SELL, you don’t know how many goals there could be in a game. In theory there could be an infinite number. Sometimes freak games can end 10-0, although very infrequent! Because of this, when betting on markets like total goals, you will never be certain of your liability when selling. However, with other markets like the Win Index that award points for the outcome, you know that the maximum and minimum number of points will be 0 and 100. This makes it a lot safer.
Buying is more exciting!
As well as being safer on some markets, buying a spread is more exciting than selling. When you choose to SELL on a spread, the result will always be at the furthest point it can get from the selling price at the beginning of the game. Ideally you don’t want any market to move from 0. E.g. For the Total Goals market, you don’t want there to be any goals!. Any increase towards the spread price gets you less winnings, and a potential to move onto the other side of the spread and therefore push you onto the losing side! This means that you will end up hoping for a boring game with no goals when selling, especially on the Total Goals market.
Buying is the complete opposite! When you buy, you won’t be winning your bet straight away. This makes the game much more exciting with you hoping for lots of goals! However, because buying is more popular, you can often finder better value in selling on some markets.
Spread betting risks
As already mentioned, spread betting carries a high level of risk because unlike fixed odds betting, your potential losses or gains from a bet can be far greater than the original money wagered. Big wins can be made from small stakes which makes it attractive to some customers, but you can also lose in the same way.
However if you are sensible about it, then you won’t have any problems. Just as you wouldn’t bet £3,000 for Manchester United to beat Burnley if you know that you can’t afford to lose the bet, you wouldn’t trade risky bets in spread betting.
Our switch from a £10 to £1 stake in the Win Index market above is a good example of how to manage your stakes to make sure you don’t lose too much. Look at the numbers in the spread. If they are big numbers, then your stake can quickly go into big multiples of profit or loss.
A stop loss can help reduce your risk
If you want to give football spread betting a go, but you are at all worried, then you can use a “Stop Loss” on your account. This limits the amount that you can lose, but at the same time also limits the amount you can win. So say that you were betting on a match with a spread of 8-10 corners, and you opted to SELL at 8, then you could use a stop loss on 15 corners, so that you don’t lose any more money after than point. However, using a stop loss here would also stop you winning so much if there were actually only 1 or 2 corners in the game.
Taking your money early
Another great thing about spread betting is that you don’t have to wait until the end of the match, season etc. to win your bet and claim your money. Spread markets are actively changing and the number you bought at may go up or down.
Say that you sold on SELL 2.2 – 2.8 BUY in the total goals market between Liverpool and Swansea with a £50 bet.
At the start of the match both teams take a while to get going and it’s still 0-0 at half time. The spread drops to SELL 1.8 – 2.0 BUY. This means than you can now buy your trade at less than you sold it for.
This gives you an automatic profit of £10 before the game ends. This is referred to as closing your bet early.
You work this out simply by taking the new BUY price (2.0) from the original SELL price (2.2), then multiply it by your stake (£50).
So, 2.2 – 2.0 = 0.2
0.2 x £50 = £10 profit.
Why would you want to do this? Well, if the match suddenly got going and there were 5 goals scored, you would originally lose your SELL bet (5-2.2 = 2.8 x 50 = £140 loss), however you bought when the price dropped at 2.0, so you won this bet (5-2 = 3 x 50 = £150 win). This averages out as a £10 win!
If the game actually ended 0-0, you would still get your £10 win. You work this out as: 2.2 original SELL – 0 goals = 2.2 x 50 = £110, then 2.0 new BUY – 0 goals = 2.0 x 50 = £100 loss. £110- £100 = £10 win!
As you can see, the way this market changed, you make a counter bet on the other side of the spread and it locked in your profit whatever happened in the game. You would have obviously won more if scenario 2 had happened (£110 win), but then you were open to the risk that scenario 1 could have happened (£140 loss). – Try the calculation…Whatever the total goals, your profit always works out as £10 in this example.
Spread bets like this work exceptionally well for longer term bets like the Golden boot. If the player you bet on has a slow start and the spread changes, you can make the opposite trade in the hope he will start banging in the goals soon and you can make a guaranteed profit!
Cut your losses
Closing your bet early can also work if you are losing your bet. If your team is having a dreadful day and you want to cut your losses and not risk losing any more money, you can close your bet early and accept that you have only lost a fraction of what you could have.
Let’s say that in the Liverpool v Swansea game, the score is 0-0 and you bought Total Goals at £50 on a SELL 2.2 – 2.8 BUY spread. It’s 60 minutes in and unless there are 3 goals, you will lose your bet and be liable for £140 (2.8-0 = 2.8 x 50 = £140 loss).
Now, because the game hasn’t gone as expected, the spread has actually gone down to favour lower goals. It’s now at SELL 1.7 – 2.1 BUY.
What you can do now is SELL the bet at 1.7 to cut your loses on the game. Doing this would cut your loses by £55! (1.7 – 0 = 1.7 x £50 = £85. £140 loss – £85 profit = £55 loss instead of £140!)
This is a great way to minimise your losses on a bet.
Another advantage of spread betting is that you also don’t need to have your money tied up in the bet. With fixed odds betting, you bet your stake and wait for the market to finish. If this is a football match then it could be 90 minutes. If it is a season long bet, then it could be 9 months! With spread betting you don’t have to pay the money for the bet up front. Bets are settled when the market is over so you don’t have your money locked up for the whole season. This is a big advantage if for example, you have a long-term bet on who may win the English Premiership.
How do bookies make money from spread betting?
When you work out the winnings and losses from a spread, they will never equal out on each side.
So for example, on a spread of SELL 2 – 3 BUY, with a £50 bet on a result of 4, a SELL bet will lose £100 (2-4 = 2 x £50) and a BUY bet will win £50 (4-3 = 1 x £50). That leaves £50 left over from the bet. This simply goes as profit to the spread betting company to pay for their service.
You can also bet on financial markets
Spread betting is not just for football and other sports. Financial market spread betting is just as popular, if not more! Financial betting this way offers a number of advantages over the real thing. One of the biggest advantages is the fact that not only can you bet on whether a share value will rise or fall, but you can decide what you want to pay for each point change. This means that you are not restricted to paying the market value for each share. This is useful if you are learning, or you see a good market, but can’t afford the shares. Another great advantage of financial spread betting is that because it is classed as betting rather than trading you don’t pay tax on your profits as you would do with real shares. This means that essentially you have tax free investing.
Advantages of spread betting
- Potential of big wins from small stakes.
- The more right you are, the more you win.
- Markets are more equally balanced.
- You can bet on both sides of the market. e.g. you can bet for a player to score (BUY) or not to score (SELL).
- You can take your money when you like. As soon as soon as you are in profit you can take your money and run by closing your trade early. You can do this even before the match or season is over.
- You can cut your losses. If you bet starts to lose, you can bail out at any point by counter trading.
- Spread betting is more exciting than fixed odds betting because your profit can keep going up. For example, on a Total Goals bet when your team keeps scoring!
- You can minimise your risk with a stop loss.
Disadvantages of spread betting
- There are a more numbers involved so it can be harder to understand at first glance.
- There can be bigger losses because of the potential for big wins.