Spread Betting - Betting With Spreads Explained.....

“Are you sure you want to place this bet?”

“Yes! Absolutely! The Dolphins are going to win, man. I am sure of it.”

“You realize the Dolphins are the underdogs in this game, right?”

“I don’t care about that. We’re going to win. I know it.”

It was Halloween night, and in retrospect this simple fact should have alerted us to the night we were about to endure. The Miami Dolphins were playing the Cincinnati Bengals on Thursday Night Football and the Bengals were boasting an intimidating 6-3 record while riding an impressive win streak. The Dolphins on the other hand, were under .500 with their 3-4 record and riding a 4 game losing skid.

The bookmakers made the Bengals and their high-powered offense a 3 point favorite that night. Their great defense ensured this was a solid bet. My friend on the other hand, “knew” the Dolphins were destined to win that night. Apparently he had inside information that not even the Dolphins were aware existed. I was nervous for him, but appreciated his confidence and faith in his team.

It was a fantastic game to say the least. The Dolphins played an unmatched intensity and effort and actually forced the game into overtime with the score 20 all. On third and ten, with 6 minutes and 38 seconds left in the game, Bengals’ quarterback Andy Dalton retreated to the goal line and was sacked by the Dolphins’ defensive end Cameron Wake in the endzone for only the third overtime safety in NFL history.

The Dolphins won 22-20.

“I won! I won! Can you believe it? I won!”

“What do you mean?” I asked fearing I already knew the answer.

“What do you mean what do I mean? I won the bet, man. The Dolphins won!”

“Yes, the Dolphins won, but they didn’t cover the spread,” I answered sadly.

“What do you mean?”

Unfortunately, this is a pretty common occurrence with inexperienced gamblers. Point spread betting in NFL - and other forms of spread betting you'll come up against in other sports - can be confusing, and if you haven’t done your homework you might end up losing a lot of money like my poor friend.

So if you have ever wondering what spread betting actually entails, this article is for you.

What Is Spread Betting?

Spread betting was reportedly created by the Connecticut mathematician Charles K. McNeail who was growing bored of the tradition way of betting and consequently started giving points to the underdogs in football games. With point spread betting, rather than wagering on the simple “win-lose” outcome, you wager on the accuracy of your prediction of the outcome based on the spread.

In other words, a gambler will wager that the difference between the scores of two teams (similar to Asian Handicap betting on soccer teams) or the total goals scored in a game will be less than or greater than the value specified by the bookmaker. The same theory could be applied to fluctuations in a currency market or the number of winning lengths in a horse race. There are dozens of other examples.

Essentially it can be broken down into two main areas - sports spread betting and trading on financial markets. There are spread firms that supply services in both of these, and some that specialise.

Of course, betting on spreads is similar to any other form of betting. You stand to win or lose money. But with 'traditional' betting (for example fixed odds betting), you're either right (your selection wins or is correct) and you win money, or you make a wrong choice and your bet loses. When you place a spread bet, the more right you are in your decision the more you can win. But the more wrong you are, the more you can lose beyond your initial stake. This presents situations where there are opportunities for wins involving high amounts of cash, but equally opportunities for losing large sums.

Sports Spread Betting

For the sake of this article I'm going to focus mainly on sports spread bets - that's where most of my knowledge lies and to me offers the best chances of winning money. Financial markets just don't grab me, but there is money to be made in them if you know what you're doing. I'll list some links to where you can get info on financial spreads further below.

Sports spread betting has grown in popularity over recent years, and offers the well informed punter that like to bet on sports events another option for how to increase profits. Football and horseracing are the two sports that attract the most spread bettors. Cricket, tennis, and rugby follow on behind.

Spread firms make their own predictions on the likely outcomes of any sporting events and your task is to make a judgement of whether those predictions are too high or too low.

Spread Bet Examples

Let’s look at one example involving, specifically around point spreads in American football. It involves teams A and B.

Let’s say two hypothetical teams are playing tonight, Team A and Team B. The bookmakers set the spread at 4 points and call Team A the underdog, making Team B the favorite. This would mean that Team A is +4 and Team B is -4. You decide to “take the points” and place your wager on Team A. For you to win, the sum of the spread and the amount of points Team A scores would have to be greater than the points scored by the favorite. Let’s look at a few outcomes given this hypothetical situation to further elaborate.

If the final score is Team A:8, Team B:10, then you would win because the points scored by Team A (8) plus the spread (4) are greater than the total points Team B scored (10). In other words, 8+4=12 which is greater than 10.

If the final score is Team A:8, Team B:13, then you would lose because the points scored by Team A (8) plus the spread (4) are less than the total points scored by Team B (13). In other words, 8+4=12 which is less than 13.

Now, let’s flip the script and say you decide to “give the points” and bet on the favorite. Here are a few of the possible outcomes.

If the final score is Team A: 5, Team B:10, then you would win because the points scored by Team B (10) minus the spread (4) are greater than the points scored by Team A. In other words, 10-4=6 which is greater than 5.

If the final score is Teeam A: 8, Team B:10, the you would lose because the points scored by Team B (10) minus the spread (4) are less than the points scored by Team A. In other words, 10-4=6 which is less than 8.

A final possibility is for the game to end in a push, or tie, from the point or goal spread perspective. This occurs when the point differential equals the spread.

In the event of a push, the game is considered “no action” and money is neither lost nor won. Although this might be a decent situation for you, the gambler, since you won’t lose any money, pushes are terrible for bookies since they have to refund every bet.

When you take overhead into consideration, this means that the book has actually lost money simply by taking bets on the event. That is why books generally offer “ties win” or “ties lose” to avoid refunds. The availability of this depends on the gambling laws in your location.

Spreads are usually specified in half-points though, in order to eliminate the possibilities of a tie.

What's Good About Spread Betting?

Placing spread bets is perfect if you are the confident clued-up type who can make a decision with conviction using probability rules. And then monitor it and be prepared to make quick decisions as the event you've chosen unfolds and the spread might change.It can offer a lot of fun, and is a good way of keeping involved with a bet.

One of the big benefits is in how much you can win if you're right. There's also no betting tax involved.

What Are The Risks?

The big risk is of course you are wrong in any bets placed. Depending on how wrong you are. The profits can be high, but equally so the losses.

Where Can I Place Spread Bets?

City Index

Cityindex.co.uk provides spread bet options on a wide range of markets including currencies, sports, commodities and company financial performance. Their site carries a useful section explaining the ins and outs of spread betting in depth.

IG Index

IG Index were one of the forerunners of the spread betting revolution, kicking off as early as 1998. Their site was redesigned and relaunched and now counts as one of the best in appearance, software, and navigation. They cover a strong range of financial related markets. Here's a link to IG's spread betting explained pages.

Tradefair

Tradefair is the spread betting arm of Betfair - the best known betting exchange. As such, you can expect their spread betting platform to be among the best. Tradefair offers opportunities to bet on more than 7,000 markets. Aside from this market range, one of the major benefits of using Tradefair is that they quote very tight spreads, usually around 1 pip.

Tight spreads are very good news for spread bettors. They mean the possibilities for increased profits and higher margins on deals are that much more achievable.

If you're interested is starting up spread betting with Tradefair, you'll also get the option to pick up a £100 start us betting bonus.

You'll even be able to open up a dummy practice account with $50k practice money - a great way to learn about the risks and potential rewards involved.

Summary

If you are going to place a bet, make sure you understand the how spread betting works. Otherwise, you will end up like my friend, thinking he won, only to soon realize he lost. Mistakes can cost you big time with this type of betting.

To end up, if the info we've covered so far hasn't whet your appetite for getting involved, here's a well constructed video on the intricacies of betting with spreads.