To most people, a ‘spread bet’ might sound like something out of a science fiction novel. The idea of risking money on a football or a rugby match is one thing. Putting your money on a horse race or a dogfight is something else. But what is a ‘spread bet’ and how does it work?
You might have seen them on the tennis or golf courts. Or maybe you’re a fan of the English Premier League and you’ve noticed that certain football clubs (e.g. Manchester United) have a marked preference for one side of the pitch (i.e. ‘the away strip’) and a clear dislike for the other (‘the home strip’). That’s because, rather than playing each other in what is essentially a heads-up match, the clubs will often schedule their encounters so that they can make a profit from the bets placed on the outcome. It’s a similar situation for teams in the English Football League Championship, which is the second tier of English football; teams will often play each other multiple times during the season in order to maximize revenue generation from bets.
Let’s take a closer look at what exactly a spread bet is and how you know if it’s one that you should avoid.
What is a Spread Betting Transaction?
The first thing you need to know about a ‘spread bet’ is that it is a type of wager that is mostly made available to people who use a service called a ‘bookmaker’. These bookmakers will offer odds on all kinds of different sports events, and you can place bets on the results of football matches, tennis tournaments, and other types of athletic competition. When you make a bet, you are actually making a ‘transfer’ of funds or ‘sporting transaction’ with the bookmaker. Let’s take a look at some of the key terms that you need to know:
Odds:
The odds are the prices that the bookmaker is offering for specific outcomes of a given event. For example, if you want to bet on the result of the England v. Germany World Cup match, you will typically have to search for the best odds offered by a bookmaker for that particular match. You don’t have to take my word for it; you can always click here to see the best odds for the England v. Germany match that you’re going to find anywhere online. When it comes to football, the odds will be in favor of one team or the other, based on which country you back. If you back Germany, for example, you will generally have to pay higher odds (i.e., the bookmaker will have to give you a greater percentage of return on your investment).
But just because the odds are in your favor doesn’t mean that you’ll win. The chances of you hitting it big with a single bet are extremely slim; you’ll need to place a number of bets in order to have any chance of making money. Even then, you’re going to have to be lucky. But that’s why people get into gambling, isn’t it? To have some sort of shot at winning big?
Return On Investment (ROI):
This is how much money you’re going to need to gain back, on average, from your investment. Nowadays, the vast majority of online betting sites will offer their users a free demo account. This is a great way to get a feel for how the site works and what kind of odds they are offering for different sports events without risking any kind of money. Once you’re ready to place a bet, simply transfer the money you’ve got into your account and you’re good to go. The site should then tell you, based on the odds they’ve offered, how much you can gain or lose on your investment. Keep in mind: it’s not always going to be profitable to bet on sporting events. But at least you’ll know what kinds of odds are available and that it’s not necessarily a bad idea.
Payout:
This refers to the amount of money you’ll need to receive, on average, in order to make a profit. The key thing to keep in mind about payout is that it’s not always necessarily about how much you win or lose. Sometimes you might simply break even with a particular bet. But sometimes you might win or lose a lot. To give you an idea of what kind of odds are available and how much you might win or lose on each outcome, the payout for each bet will be displayed directly below the odds, so you can clearly see the percentage chance of you profiting or losing from that particular bet.
Profit:
Profit is, in simple terms, how much money you’ve made from all your betting activity. It’s going to be displayed to you, at the end of each month, as a summary of all your transactions, including winnings and losses. You’re going to need to have a fairly high winning ratio, in other words, in order to generate a decent amount of profit. Even then, it might not be easy; you’re going to have to be smart about placing the right bets, at the right time, if you want to continue making money. But at least you’ll know where you stand. And you can always use leverage, on smaller bets, to increase your chances of winning.
Losses:
This refers, simply, to the money you’ve lost over the course of all your betting activity. It can be a great tool to help you identify areas where you’re risking too much money and to help you cut back or eliminate those areas, if you find them. If you’re looking to cut back on your losses, you might want to consider reducing your exposure to certain sports events or markets; after all, the more you risk, the greater your odds of losing. It’s all about probability; the more you risk, the greater your chances of losing. But rather than seeing your losses as a negative, consider them a learning experience. If you find that certain sports events or markets are simply beyond your means, then it might be best to avoid them altogether.
Risk:
This refers, simply, to the amount of money you’re risking, on average, over the course of all your betting activity. Risk can be a useful tool to help you isolate areas of your game where you’re exposing yourself to unnecessary risk. The main thing to remember about risk is that, although it might feel like a good idea, betting high is generally not a sound strategy. The greater the risk, the greater your chances of losing. But rather than seeing your losses as a negative, consider them, as before, a learning experience. If you find that certain sports events or markets are simply beyond your means, then it might be best to avoid them altogether.
Bookmakers:
Most people are going to lose money on sports betting. The key reason is that the overwhelming majority of bookmakers are going to be offering very high odds (i.e., greater than 1.5 to 1) on most events, which is simply a sign that they’re trying to up their revenue and make a profit from as many bets as possible. The smaller or more obscure the bookmaker, the greater the chance that you will hit it big, but the greater the risk of you losing as well. For the best odds, check out reputable sites that are well-established and have a good reputation; otherwise, you could find yourself taking a big hit, quickly.