What is Spread Betting?
Many people have asked me in the past, ”What is Spread Betting?” The simple way to respond is to explain that in spread betting, accuracy matters. The more right you are the more you win. The more wrong you are, the more you lose.
In spread betting you are given a Buy number and a Sell number, for example let’s take the Total Corners market in a football match. You are presented with the following;
Man City v Burnley
SELL @ 10
BUY @ 11
The Buy number is set at 11, the Sell number at 10 You then decide if you think there will be more than 11 corners, you buy. If you think there will be less than 10, you sell.
Now you decide your stake, this is not a total bet stake. In spread betting you decide your stake based upon (in this case) how much you want to bet on each corner. So if buying corners at 11, you will win your specified stake multiplied by each corner over 11 that happens. Similarly, you will lose your stake multiplied by each corner less than 11.
A practical example of Buying Corners is;
£10 Buy of Corners at 11
Corner count ends at 14
Therefor the count went 3 over your buy number, you win 3 x £10 = £30.
Here is an example of Selling Corners;
£10 Sell of Corners at 10
Corner count ends at 5
Here the count went 5 under your sell number, you win 5 x £10 = £50.
If you made the same sell but the corner count ended at 16. You would lose 6 x £10 = £60.
The spread company’s profit margin kicks in as they have both 10 corners and 11 corners as winning numbers for them, based on equal money being bet on both sides.
If they have £100s worth of Buyers at 11 and £100s worth of Sellers at 10, they have balanced money on both sides. That gives the company the numbers 10 and 11 as winning outcomes. If 10 corners are taken, they take the Buyers @ 11 money and yet don’t have to pay the Sellers @ 10 (they push their bets). If there are 11 corners, it’s just the opposite result for the Buyers and Sellers.
Buy and Sell numbers will not often fall on exact numbers such as 10 and 11 but more often would be 10.7 and 11.3 for example.