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Sports and Spreads
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Spread betting can be applied to a huge range of sporting events and matches. There are three basic categories into which bets fall:
- Total Number Bets
- Supremacy and Match Bets,and
- Performance Index Bets
These are decided by the totals of certain numbers in sporting events from which winners are declared, ie goals in football; runs in cricket; points in rugby; shots in golf. The key idea underpinning all bets is the ‘spread’. That spread represents the difference between the prices at which you can back your selection to do well or to do badly.
Cricket Spread Betting Example
How does it work? Imagine the First Test between England and the West Indies.
How many runs will England score in their first innings? Example:
For Total Runs the spread might be 260 runs – 280 runs.
This means England are expected to score between 260 and 280 runs. If you think the pitch is full of runs, and that a total of 400 is likely, you should BUY at the higher quote ie 280.
If, on the other hand, you think England will get nearer 200, you should SELL at the lower quote of 260.
You specify your stake, ie the amount per run you wish to bet.
(You always buy at the higher quote and sell at the lower quote.).
Ley’s say you think England will do well, and BUY for £2 per run at 280 runs. This means for every run above 280 that England score, you win £2. If they make 400, you win (400 runs – 280 runs) x £2 per run = £240.
But for every run below 280, you lose £2. If they are all out for 200, you lose (280 runs – 200 runs) x £2 = £160.
If, instead, you were confident that England would do badly, you could SELL for £2 per run at 260 runs. So for every run below 260 that England total, you win £2. A final score of 200 nets you a profit of (260 runs – 200 runs) x £2 = £120.
But conversely for every run above 260 loses you £2, and a total of 400 means a loss of (400 - 260) x £2 = £280.
This demonstrates the key difference between spread betting and fixed-odds betting. Profits, and losses, are made in proportion to whatever unit stake you choose, but the stake is not the limit of your financial risk.
With a £10 bet at a High Street bookmaker, that £10 is all that can be lost. A £10 per run bet on cricket can win, or lose, many many times more than the £10 unit stake.
For more examples see:
'Sports and Spreads', article by D. Jones, last update: 21 May 08
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