BEGINNER’S GUIDE to SPREAD BETTING

by Alex Deacon of

The Racing and Football Outlook

While never likely to match the popularity of fixed odds betting, or, for that matter the betting exchanges, Spread Betting has since its arrival on the scene a decade or so ago slowly become part of the football betting landscape.

Derived from the spread betting markets that exist within many of the large financial trading companies, football spreads offer a way in which punters can bet on very specific elements of a game such as the total number of goals scored, through to the combined shirt numbers of those players scoring in a game.

They also differ in the way that one actually bets. Whereas with fixed odds betting, the bookie’s quote is a price which works as a factor by which he will multiply your stake if you win, Spread Betting firms quote two figures with represent their view of how often something will occur or how much of something might happen. If you think they have underestimated you “buy”, while if you think their quote is too high, you “sell”.

For example, if you think that there'll be a lot of corners in a game, it is possible to buy the number of corners at the quote offered. Similarly if you don't think there'll be many you can sell the quote. The quote might look something like this; 11-13. What this means is that those wanting to sell will be doing so at 11 (i.e. they think there'll be less than 11). Alternatively those buying will be purchasing at 13 (they think there'll be more than 13).

In the event of there being less than 11 the successful seller's return is calculated by subtracting the actual number of corners, for example six, from the original selling quote 11 and then multiplying by the stake; 11-6 = 5 multiplied by original stake of £10 per corner = £50 profit. However, the seller loses when the number of corners goes above the 11 mark and that loss is multiplied according by the stake value. Thus a game with 15 corners would see the four corner difference resulting in a £40 loss: 15-11 = 4 multiplied by original stake of £10 per corner = £40 loss.

To those first coming to spread betting, many of the conventions are so different from the Fixed Odds format that many simply find it too confusing or alien relative to their usual fare and return to the comfort of 12X betting. However, that is to ignore a form of betting that can be just as profitable as the fixed odds game although one that, given its volatile nature, is best approached having thoroughly acquainted yourself with the way the markets work and with the conventions employed by the firms. The fundamental differences in spread betting are the type of markets offered and the ways that they are not expressed as odds. They are though just as easy to understand.

Some confusion stems from markets such as supremacies, which by their very nature don't make sense at first inspection. Given that football matches don't often result in teams winning by three or four goals, it was necessary to express a supremacy value of the eventual winning margin in terms of tenths of goals. So for a game between two sides, we might see a supremacy quote expressed as 0.3-0.6 (such a “plus” figure is in favour of the home team: -0.3 - 0.6 would be in favour of the away side). Obviously the final score won't be see one team winning by 0.7 of a goal but for the sake of a workable market this is the way it is.

What the 0.3-0.6 quote means is that those wishing to buy the winning margin would do so at the figure of 0.6. If that margin is exceeded, i.e. the team won the game by one goal or more then the punter would win for a one goal victory 0.4 x stake, two goals (0.4+1) x stake and for three goals (0.4+1+1) x stake. Sellers on the other hand in the event of the same result would be losing 0.7 x stake for the one goal defeat, (0.7+1) stake for a two-goal loss and (0.7+1+1) for a three-goal defeat.

Having decided that you wouldn't mind investing a bit of time and money in spread betting, who are the best people to put your money with? Whereas the choice with traditional bookmakers is wide and varied, the number of spread betting firms is markedly smaller. In the UK the market is at present dominated by four companies - IG Index, Sporting Index, Cantor and Spreadex - all of whom offer the same core football markets such as supremacies, total goals and shirt numbers as well as their own variations and specialities. All four also offer help, advice and guidance to newcomers, so check all that out before betting.

With the early spread firms deriving out of financial institutions, the early days of spread betting saw the main concentration of their business done through and with "City types". Consequently, many looking to have a go were put off by the size of the minimum bets that you were allowed to make. For some accounts, a minimum stake per goal on supremacy could be as much as £250, a sum way in excess of the type of figure usually punted on a coupon-by-coupon basis on the High Street and more in line with the financial horizons of someone whose Christmas Bonus is enough to run a small Government Department.

To bring in more customers, spread firms have now introduced all manner of products and promotions and it is possible to have a spread bet through firms like Bethilo (part of Sporting Index) for as little as 1p per bet. There really is no reason for any punter, once armed with the facts, to hold back from exploring the spread-betting world.

A major problem with spread betting for those punters who have been emersed in fixed odds betting is that you can, if you are not careful, lose a hell of a lot of money, the upside being that you can also win a lot. If, for example, you have bought a batsman’s runs at 33 and he’s out first ball, you lose 33 times your stake, but if he goes on to score a double hundred you have landed a return of at least 166/1 in fixed odds terms.

So approaching Spread Betting sensibly means making sure you understand the nature of the bet that you're making plus the extent of the potential risk and staking accordingly. Spread Betting disasters arise out of unlimited make-ups and a misunderstanding as to how to stake a spread bet.

With fixed odds, we decide what we wish to bet on, then how much of our hard-earned we're going to stake on it, never going beyond what we can afford to lose. If the worst comes to the worst, as it sometimes will, all we lose is our stake and we move on to the next punt relatively unharmed and ready for the next battle. The problem for many with spreads is that the stake (in the sense that we are used to in fixed odds) becomes a multiplier by which all manner of financial chaos can be wrought.

For example, we might fancy Team A to beat Team B at even money, stick down £20 and know with cast-iron certainty that, between making the bet and the end of the game, nothing is going to change the fact that we're going to either win or lose £20. With spreads as I've explained above things are different and no more so than in this notion of staking. Assuming in the above bet that we have determined £20 as the maximum we wish to put in jeopardy on a fixed odds bet there is no reason why the same sum shouldn't be set up as the maximum possible loss on a spread bet.

 

While it's likely that a conservative staking plan will reduce potential profit, staying rigid in your staking plan and only betting when you have a clear view of your largest possible loss will significantly reduce the chances of a disaster. The type of market that punters coming fresh into the game should look to avoid if they are in anyway cautious are the more volatile markets. In particular, a wide berth should be given to the likes of multi-corners or shirt numbers.

Multi-corners works, for example, by simply multiplying the number of first half corners by those in the second half. Simple enough, but a cruel market if ever there was one. Take two not untypical games as an example. The first sees ten first half corners and none in the second half which make up a final total zero (10x0=0), while the second game sees five corners in the first half and five in the second making up 25 points (5x5=25). Thus we have the same number of corners but markedly different payouts. Ok, so some punters might like that sort of excitement but excitement isn't what betting is about: making money is.

One aspect where spread betting offers a different proposition to that of the traditional bookmakers is with regard to arbitrage or Arbs, as they are more familiarly known. An arbitrage occurs when a firm makes a price that is significantly out of line with another so that a crossover occurs in the prices that in theory guarantee a small, but certain, profit. For example, if one firm's quote for total corners is 10.5-11.5 and another firm prices it 12-13, one can in theory back corners at 11.5 with one firm and selling at the other at 12 thus ensuring a guaranteed half point profit whatever happens. In theory that is. The truth is that in football at least arbitrages are as extremely rare and when they do occur do so relatively briefly.

The key therefore with spread betting is one of increased caution. There is scope with betting on the spreads to make money but work out any plans you have on paper first before parting with your money. Spread firms are clued up and have large teams of, in the main, clever people working out their quotes. However, in spite of that they also have their weak spots, which someone who has done their homework should be able to identify and profit from.

EDITOR’S NOTE: At the moment, SoccerLotto.com does not offer Spread Betting advice, nor do we have plans to, unless we encounter someone whose expertise matches that of the Racing Post’s Kevin Pullein whose recommended Spread Bets have made a profit, I believe, every season for at least ten years. A key element of Kevin’s armoury though is his “Recommendation: No Bet”. It’s a neat paradox that a form of betting originally devised to help separate what Alex calls “City types” from their £1 million Christmas bonuses and thus make their lives more exciting, poor lambs, should attract as its main guru someone who succeeds by being innately cautious.