Opinion Speculation

What is Spread Betting and How Does It Work?

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Thanks to the US Supreme Court ruling in 2018, sports betting is now available in more than 30 states and counting. Whether you are a seasoned bettor or new to placing a sports bet, there are many options available for you – from placing a wager on who is going to win a basketball match to gambling on who will come out victorious in the Super Bowl. 

What is Spread Betting?

In Stocks

If you are a bit of a financial whizz, you will already know that spread betting in stocks and shares is a bet placed on the direction that a financial market will move. Spread bettors have two prices to consider – the bid and the ask. The spread is the number between these prices. 

Spread betting is an investment in the movement of the market rather than buying or selling the underlying securities, and you can spread bet on a wide variety of financial instruments. 

The bet you make will depend on whether you think the price of the underlying security is going to be lower than the bid or higher than the ask. Playing the financial markets in this way can mean that if you make the right decisions you can profit in both a bull and a bear market. 

In Sports

Spread betting in sports is an alternative to placing a single win bet or other related single outcome bets. Instead of betting that the 49ers will win a match against the Bills in the Super Bowl odds, you could instead bet on the total number of points scored. 

This means that you can stake a relatively small amount and win a larger sum – your stake will be returned to you if you win plus the equivalent of your stake by how correct you are in your assumption. 

In the above example, the sportsbooks have decided that they think there will be between 3.5-5.5 touchdowns scored in the match. If you think that it is going to be higher than that, you’d ‘buy’ on 5.5 or more touchdowns, and as long as the total amount of touchdowns scored is more than 6, you’re onto a winner. 

Spread betting is just another way to gamble on the outcome of a game, and it can be used in almost every sporting event in some way, from the number of holes in one in a golf tournament to the number of faults in a showjumping championship. 

Point Spread Betting

Another way to look at spread betting is to regard point spread betting. Point spreads are particularly popular in the NBA and the NFL.

In these, the point spread is essentially a handicap, which represents the bookmaker’s best guess of what the points difference would be between the teams at the end of the match. 

For example, if one team is likely to win by at least 6 points, the handicap might be 5.5. This would be demonstrated by the stronger team having a -5.5 after their name on the sportsbook, while the underdog team will have +5.5. The point spread can be as little as half a point, or it can be 50 points or more – it all depends on the analysis factors that the bookmakers use to decide. 

This means that if you bet on the underdog, they need to either win the match or not lose by more than 6 points for your bet to pay out. If you bet on the favorite to win, they need to win by at least 6 points for the bet to pay out. 

Tips for Spread Betting

Start Small

If your spread bet doesn’t work out, you may lose the equivalent of your stake for every point. However, you could also win the equivalent of your stake for every point. In the soccer example above, anything over 6 goals would make your bet a winner, but if the total goals scored was 9, you’d win three times your stake (9-6=3). If there were only 3 goals scored in the game, you could lose three times your stake. 

Play Markets You Know Well

Like any sports betting, you should consider the wagers you are placing so that you are following the market sentiment to some extent. The only way to do this properly is through research and familiarity – so if you’ve never watched a darts game, for example, you might not want to bet on the spread of points in the first three darts, for example. 

Watch Your Bankroll

As with all betting, your bankroll is the money you have set aside for sports wagering, so make sure that you are making sensible decisions when spread betting. Mistakes can happen, as can losses – only bet what you can afford to lose. 

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