Spread betting guide

>> Introduction

Spread betting is a form of gambling on the outcome of any event where the more accurate the gamble, the more is won and conversely the less accurate the more is lost. For example if you bet on a football team to win then the more goals they score the more you win and vice versa.

• With spread betting, the more right you are, the more you win. You don't have to be exactly right either, as long as you are in the right direction, you will make a profit.
  
  
• Unlike with traditional bookmakers, you can back something to do badly (go low or SELL) as well as to to do well (go high or BUY). For example, if you don't fancy the favourite for the big race, you can bet on it to lose.
  
  
• There are a huge number of ways you can bet on a game. On a live football match, for example, you can bet on the number of corners, yellow and red cards, or goals scored in the game, the performance of individual players and much more.
  
  
• You can close your bet at any time until the end of play, so you can take a profit, or cut a loss. Some accounts can be setup to automatically close your bet if you reach a certain threshold so you can limit your losses, while leaving your potential winnings uncapped.

>> How does spread betting works

	Buy if you expect the first goal to be scored after 27 mins
	Sell if you expect the fist goal to be scored before 20 mins

First goal example
You want to bet on the time of the first goal scored...

The spread betting firm will offer you a spread which will consist of a low figure and a high figure. You can bet on whether you think first goal will be scored after the high figure (buy) or below the low figure (sell).

In our example we are offered a spread of 20 - 27mins before the game begins.

Let's say the the game got off to an unexpected flying start and the first goal was scored in 5 mins and you staked £10 per min.

>> How to be luckier at spread betting

Believe it or not there is such a thing as a risk free bet - this is known as arbitraging. The idea of arbitraging can be illustrated as follows:

1. A antiques dealer is at a car boot sale
2. The antiques dealer stumbles across an old watch priced at £6 (the antiques dealer happens to know this watch is a collector's item)
3. The antiques dealer calls his friend who owns a watch shop, who informs him he's willing to buy these watches for £80
4. The antiques dealer buys the watch, knowing he's guaranteed a profit of £74

Take our first goal example from above, let say Firm A offered a spread of 20 - 27 mins and Firm B offered a spread of 35 - 41 mins.

As the the upper spread of Firm A is lower than the lower spread of Firm B - there is a gurannteed profit, whatever the outcome, if you back Firm A to go higher (buy) and back Firm B to go lower (sell). Let's say we staked £10 per min, the results will be:

As you can see when there is an imbalance between spread offers you are guranteed the same profit regardless of the outcome. The reason why we get £80 profit is because there is a 8 min difference between the two spreads.

Such opportunities, however, are relatively rare and tend to be small margins. Only the most dedicated watcher will realistically be able to benefit repeatedly from arbitrage betting with a view to securing a regular income.