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Advantages of Spread Betting and Common Pitfalls


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Advantages of Spread Betting and Common Pitfalls




A Quick Introduction To Spread Betting


Sports spread betting is a relatively new form of gambling which has its origins in financial trading. Betting on commodities has always been popular in the City of London and operators have applied the principles of trading on these markets to sports spread betting.


The basic principle of spread betting is that a customer is betting that the final outcome of an event will be higher or lower than the spread. This spread involves a range of two numbers and customers bet that the result will be higher than the higher number or lower than the lower number. The difference between the two quoted numbers represents the profit margin for spread bookmakers.


Spread betting on sport presents the bettor with the opportunity to bet on a spread of numbers that relate to the outcome of a specific event. The growth of spread betting around the world has been phenomenal. This is largely due to the fact that there seems to be no limit to what can be bet on with spread betting investment


Spread Betting Guide – Popular Sports and Markets


Football is the most popular betting sport globally through any form, whether traditional, exchange or spread betting. Total goals and supremacy markets attract the most business, especially for matches that are televised live.


Horse racing traditionally has been the main betting sport in several countries. Its share of the market has fallen with the onset of more sports-orientated online bookmakers. However, betting on winning distances at a meeting and finishing positions still generate a significant amount of turnover.


Cricket, golf and tennis are other popular spread betting sports. Match spread bets between two teams or players generate plenty of interest in addition to totals markets such as for runs, strokes and points respectively.


Advantages of Spread Betting


The main advantage of spread betting on soccer, for example, over other forms of betting is that the more the customer is right the greater the returns. With a traditional bet the returns are limited by the stake and the price available when the bet was struck.


A customer may think that a soccer team should win a match by several goals. In this case the bet would be to buy or go high. The returns are estimated by comparing the upper level of the spread with the make-up which is the difference in the number of goals scored by each side.


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Once the goals supremacy has exceeded the spread the bet becomes potentially profitable. A goal from the underdog changes the status of the bet but each successive goal scored by the favourite to increase the supremacy results in additional profits.


A spread is in effect a handicap on the favourites. Many soccer matches are potentially uncompetitive when there is a short priced favourite. Most bets are likely to be on the favourite but at restrictive odds.


Once the spread is applied to a match the odds become more attractive for both options. The spread is applied to a market to attract two-way money and the odds available reflect an equal probability of the spread exceeding or being less than the make-up.


Spread betting also lends itself to in-play betting. As a match in soccer develops quotes for many facets of the game are adjusted. This means that a gambler in a strong trading position can close the bet to guarantee a profit. Conversely a bettor in a poor position can close the bet to minimise the loss.


A spread bet can last for the complete duration of a sporting event and can still be active right until the last play. Traditional bets on the correct score, total goals or goalscorers can be over well before the end of a soccer match. However, with a spread bet on total goals, goal minutes or bookings the make-up will not be decided until the end of the match.


In a one sided football match the result of a simple bet on the outcome of the match would become clear early in the game and possibly even before half-time. However, one of the spread bets might be the number of goals to be scored in the match so predicting more than four when the score is 4-0 would maintain an interest until the end of the game.


Potential Pitfalls of Spread Betting


One of the major pitfalls of spread betting is that losses are not determined by the stake unit. It is possible to lose substantially more than the stake especially in markets that have large make-ups. Each successive run in cricket or stroke in golf can increase the losses from a bet.


In cricket betting a wager on the total number of runs in a Test match carries a significant potential loss. Bettors who go high on the total number of runs can have a costly liability if weather interuptions limit the amount of playing time and the potential number of runs in a match.


The potential for substantial losses is controlled in some way when the bookmaker applies stop losses. A stop loss puts a limit on the final losses from a bet. Once the stop loss has been reached no more losses can be incurred and this allows firms to ensure a customer has enough funds to cover the maximum possible liability.


Spread betting companies have some responsibility in the control of problem gambling. As it is possible to have numerous trades in any sporting event and add to the portfolio in running the dangers of compulsive or addictive behaviour are more prevalent in this form of gambling.


In 2009 the Gambling Commission in Great Britain reported that serious problems develop in 15% of spread bettors compared to 1% of other forms of gambling. A respected BusinessSchool also found that 1 in 5 spread bettors end up as winners. However, this corresponds to the same ratio of successful punters in regular betting but is still a low figure and indicates how difficult it can be to win when spread betting.


Interested to learn more and give spread betting a go? Join SpreadEx today and take advantage for their fully loaded test account and when you are ready to go live, the will give you 200GBP in free spread bets!




Have you tried Spread Betting on Soccer? Are you interested but also wary of giving it a try? Let us know your spread betting experiences below


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