To the novice spread betting appears hugely complicated but once the basic principles have been grasped it should become easy to understand. There are currently four spread betting firms – Cantor Sport, IG Index, Sporting Index and Spreadex. This guide attempts to set out the main principles and illustrate them with examples.

Buying and Selling

Spread betting offers a whole host of new betting opportunities and the first principle to become comfortable with is buying and selling. For every bet the backer must either go higher (buy) or lower (sell) on the spread betting firm's prediction of the outcome of a sporting event. The most obvious comparison here is the buying or selling of shares. The price of a specific share may be displayed in a newspaper as being 400 pence - which is the mid-market price. That would equate to a quote of around 398-402. If you wished to buy the shares you would go higher at the larger figure (402) or if you wanted to sell you would do so at the lower figure of 398. The gap in between is the stockbroker's margin - or in the case of spread betting it allows the tax to be absorbed by the firm, meaning there are no deductions. A similar example would be the buying and selling of foreign currency. A spread works exactly the same way. The market makers at the various spread firms come up with their prediction of the result of a sporting event and then offer a quote either side of this number which can either be bought or sold.

Totals

Most sporting events produce a total number of goals, points, shots or runs scored. Here are two examples: Example 1: The first Ashes Test of the summer between England and Australia at Edgbaston. England win the toss and decide to bat and a spread firm quotes the total runs they will score in their first innings as 310-330. They are therefore predicting that England's first innings total will fall within the range of 310 runs to 330 runs. If you feel that the quote is too low - maybe the Edgbaston pitch has been a haven for batsmen in recent seasons and the England top order have been in sparkling form recently - you would buy their runs at the higher quote of 330. The belief here is that they will score more than 330 and the more right you are the more you stand to win - but equally the more wrong you are the more you would lose. The unit stake is decided by the backer (within their credit/debit limit) but for this example let us pretend here that the unit stake is £1 per run. So for every run England score above 330 you win £1 per run but for every run they score below 330 you lose £1 per run. However if you decided to go the other way - feeling that the Australian bowlers will dismiss England for less than 310 - you would sell at the lower figure (310). So for every run England score below 310 you would win £1 per run but for every run England score over 310 you would lose £1 per run. Just to reinforce the principle we are using here - you always buy at the top quoted figure (330) if you think the final total will be bigger or sell at the lower figure (310) if you feel it will be smaller. In our first Test example we will imagine that England were all out for 270 in their first innings. The two bets would work out as follows: Buying at 330 for £1 a run. You were predicting they would score more than 330 but they actually scored 270 so you would lose 330 minus 270 = 60 x £1 stake = £60. Selling at 310 for £1 a run. In this case you correctly predicted they would score less than 310 as their innings finished on 270 so you would win 310 minus 270 = 40 x £1 stake = £40. It should be immediately obvious that this is very different to fixed odds betting when you know exactly how much you can lose (your stake) and how much you can win (providing you take a price) when the bet is struck. Example 2: England are playing a summer football friendly against Bulgaria and a spread firm quotes the total number of goals scored in the match as 2.3-2.6. Obviously the actual result cannot be between that 2.3-2.6 band but the market makers obviously feel that the match is most likely to produce either two or three goals. For this type of bet it does not matter which side scores the goals, simply how many there are altogether in the match. So if you feel it will be an open and attacking match that is likely to be a high scoring affair you would buy at the higher quote (2.6). But on the other hand if you expect the defences to dominate you would sell the total goals at the lower quote (2.3). In this example we will use a unit stake of £10 per whole goal which equates to £1 per tenth of a goal. The match ends up with England winning 3-2, meaning the total goals equals five. The two bets would work out as follows: Buying at 2.6 for £10 a whole goal. You were predicting there would be three goals or more and given that the actual result was five you win 5-2.6 = 2.4 x £10 stake = £24. Selling at 2.3 for £10 a whole goal. In this case you incorrectly felt the two sides would score two or less goals between them so you would lose 5-2.3 = 2.7 x £10 stake = £27. These principles hold firm for any market in which the total is expressed in terms of a spread, be it the winning total in the British Open or the total number of seats the Labour Party win in the General Election.

Supremacies/Match Bets

This is the second main type of spread bet that backers need to understand. All sports involve competition of one sort or another between teams and individuals and this type of bet allows you to predict the superiority of one team or individual over another. In most match bets one of the two rivals will be the favourite and their name will appear first, followed by their opponent's and then the predicted margin of victory. The easiest way to illustrate this is with a couple of examples: Example 1: The British Lions are playing Australia in the first rugby union Test match of the summer. The spread is quoted as follows: Australia/British Lions 10-12 points This `translates' into Australia being the favourites over the British Lions (as it is their name that comes first) by a margin of 10 to 12 points. Australia are also the home team but that is irrelevant as far as the format of this type of spread is concerned. If you expect Australia's winning margin to be greater than 12 points you would buy at the higher figure (12) but if you thought the Lions would put up a bold show and either lose by less than 10 points or actually cause a surprise by winning the match you would sell at the lower figure (10). This is one of the beauties of spread betting in so much as the Lions do not need to win for you to make a profit. To illustrate this example let us imagine the final score was Australia 22 British Lions 16. We will also pretend that the unit stake was £5 per point. The two bets would work out as follows: Buying at 12 for £5 a point. You were predicting that Australia would win by more than 12 points but in actual fact - although they won - it was only by a six point winning margin. Therefore you lose 12-6 = 6 x £5 stake = £30. Selling Australia's superiority at the lower figure (10) for £5 a point. In this case you correctly felt the Lions would not lose by 10 points or more and you would win 10-6 = 4 x £5 stake = £20. Example 2: Horse racing is also a popular medium for supremacies. Our example concerns the Derby with a match bet being offered between Nayef and Tobougg. The spread is quoted as follows: Nayef/Toboug 1-2 lengths This works in much the same way as the rugby example. That is to say that the market makers have Nayef as their favourite, predicting he will beat Toboug by between one and two lengths. If you agreed that Nayef would beat Toboug but by more than two lengths you would buy at the higher figure (2). Remember that Nayef does not have to win the race, but simply finish more than two lengths ahead of his rival. But if you thought that Toboug would finish in front of Nayef you would sell Nayef's superiority at the lower figure (1). We will base the results on a unit stake of £20 per whole length and a one length victory for Nayef. The two bets would work out as follows: Buying at 2 for £20 a length. Nayef did indeed beat Toboug but it was only by a length. Therefore you lose 2-1 = 1 x £20 stake = £20. Selling Nayef's superiority at one means you break even, with 1-1 = 0 x £20 stake = £0 That is because Nayef won by exactly a length, precisely the distance you sold him at, meaning no money changes hands providing the client has a credit account. One of the benefits of this type of betting is that unlike fixed odds you can in effect back a selection to do badly - without having to find another horse to beat it.

Performance Index Bets

This is the third key type of spread bet. With this type of bet, 'mythical' points are awarded to contestants according to their finishing positions. Example 1: Jockey Frankie Dettori returns to the scene of his greatest triumph when he takes part in the Festival of British Racing at Ascot in September. The spread firms quote a performance index for his seven rides. The quote is 50-55 based on the allocation of 25 points for a Dettori winner, 10 points for a Dettori second and 5 points for a Dettori third. A repeat of his 1996 seven-timer would have produced a haul of 175 points and if you expected Dettori to go some way towards staging a repeat of that display you would buy at the higher figure (55). For this bet to win you would need the seven rides to produce a total of over 55 points, for example two winners and a second or six second places - both of which would make a 60 points total. However if you thought Dettori's mounts would struggle in their respective races and felt that the make-up would be less than 50 points you would sell at that lower figure. In this example we will make the unit stake £2 per point and the imaginary make up as three winners, a second and a third. The figure those results produce is 3x25 (for the three winners) + 1x10 (for the second place) + 1x5 (for the third place) = 90 points. The two bets would therefore work out as follows: Buying at 55 for £2 a point. You correctly predicted that Frankie would exceed the 55 points target and would win 90-55 = 35 x £2 stake = £70. Selling at 50 for £2 a point. In this case you were looking for Dettori to have less than two winners and only one or two places. However he scored points in five of the seven races including three winners. You lose 90-50 = 40 x £2 stake = £80. Example 2: Wimbledon provides a galaxy of tennis betting opportunities for the spread betting punter with one of the most popular markets being the 100 index. This is the equivalent of the fixed odds betting on the outright winner of the men's or women's tournament. But whereas your selection probably has to get to the final for you to make a profit in fixed odds betting (even when backing each-way), in spread betting he/she may only need to make the last 16 depending on his/her original quote. And of course there is always the option of selling - effectively backing the selection to make an early exit - to secure a profit. In this example we are working on an index that awards 100 points to the winner of Wimbledon, 70 to the runner-up, 50 to each losing semi-finalist, 33 to the losing quarter-finalists and 20 to those knocked out at the last 16 stage. Britain's Tim Henman is given an initial quote (remember this will change day by day or even match by match) of 23-25. If you feel that Henman will make at least the quarter-finals (33 points) you would buy at the higher figure (25). If however you thought that maybe he was struggling with his form or had a tricky-looking draw you would sell at the lower figure (23). In each case we will make the unit stake £5 and pretend that Henman gets to the semi-finals before being eliminated. The two bets would work out as follows: Buying at 25 for £5 a point. With Henman reaching the semi-finals before he was knocked out he was awarded 50 points, meaning that you would win 50-25 = 25 x £5 stake = £125. Selling at 23 for £5 a point. In this case you would lose 50-23 = 27 x £5 stake = £135.

Betting In-Running

Another principle that the backer needs to be aware of is the chance of taking a profit, or cutting a loss, in running. When most high profile events are in progress the firms will constantly update their prices on certain markets. Let us look at an example to illustrate this point: Liverpool are playing Newcastle and the opening quote on the total goals before the game started was 2.5-2.8. Within the first ten minutes of the match getting underway Liverpool have shot into a 2-0 lead and the revised quote 'in running' rockets to 4.2-4.5. Those who had bought at 2.8 could take a profit of 1.4 times their unit stake simply by selling at the revised lower figure of 4.2. Whatever the eventual score, their profit will remain the same. Say Liverpool go on to win the match 4-3. The original buy at 2.8 makes up at a profit of 7-2.8 = 4.2 x the unit stake. But the sell at the revised quote of 4.2 leads to a loss of 7-4.2 = 2.8 x the unit stake. And the net figure - a profit of 4.2 and a loss of 2.8 - equals an overall profit of 1.4 multiplied by the unit stake. It works out exactly the same had the score remained 2-0 (a loss of 0.8 on the original bet but a profit of 2.2 on the sell at 4.2). This can also work in reverse in that the backer can decide to cut their losses.

Risk Warning

Hopefully the Betting Zone shows just why spread betting is becoming so popular - and the many advantages it holds over traditional fixed odds betting. But it would be wrong of us not to inject a cautionary note. Backers should always be fully aware of the risks involved in that the more wrong you are the more you can lose. There are stop losses and maximum make-ups on certain markets but these vary from firm to firm and punters should be fully aware of what they are before placing a bet. They can be found in the rule books issued by all the spread betting companies on the opening of an account. But whatever the account or bet, the worst case scenario should always be worked out. Certain markets are much more volatile than others (totals goals in a football match are obviously far less volatile than total runs in a Test match). All the spread firms offer clear warnings in their literature and they should be heeded.

Other types of spread bets

Most spread bets are based on the above basic principles. Several sports (mainly racing and football, which dominate the world of spread betting) have bet types which are unique. Below is a list of several of these markets, although such is the pacy nature of spread betting that it is impossible to list all bet types. It is fair to assume that whatever your sport, a spread bet is likely to be available on it.

Racing

Double card numbers: All the firms offer a spread on the total of the winners' doubled racecard number. For example if the winners of a meeting at Newmarket were numbers 1,1,16,12,8 and 3 (a total of 41) the result or make-up would be 82.

Favourites: This is a performance index with 25 points awarded for a winning favourite, 10 if it comes second and 5 for third. If there are joint or co-favourites the horse with the lowest race card number is considered to be the favourite.

Winning SPs: This is a market around the aggregate starting prices for the winners at a particular meeting. The key thing to remember here is that when a starting price is not a whole number (eg. 7/4) the price is rounded up to the nearest first decimal point, halves going up. So 7/4 which is actually 1.75/1 counts as 1.8. Any starting price in excess of 50-1 is treated as 50-1. When no SP is returned the make-up for the race is deemed to be 1. Check the rule books for details of maximum make-ups on the market.

Winning distances: The market is based on the aggregate winning distances at a particular meeting. The official distances are those given by the judge as the horses pass the post. For winning distance settling purposes the maximum make-up for an individual flat race is 12 lengths, with 30 lengths for national hunt races. A short-head equates to 0.1 of a length, a head to 0.2 and a neck to 0.3. All other distances should be obvious. The maximum make-ups for each race on the Flat is 12 lengths and over jumps it is 30 lengths (though that may well change in the near future). Check the rule books of the individual firms for their rulings in more unusual cases such as walkovers.

Football

Totals (Goals, Shirt numbers, Corners etc): All these markets work in the same way. Let's take the total goals one as an example. For a Premiership match between Manchester United and Leeds they may be quoted at 2.7-3.0. If you expected a tight game with not many goals you would sell at the lower figure of 2.7 for, say, £10 a tenth of a goal (£100 a whole goal). If you were proved correct and the match finished 0-0 you would win 27 times your £10 stage (or 2.7 times £100) - £270. But let's pretend that Leeds ran out winners in a 3-2 thriller, you would lose 5-2.7 times your £100 a whole goal stake - £230. The shirt numbers and corners markets work in the same way though obviously the initial quotes are markedly different. A typical quote on corners in a Premiership match might be 11.5-12.5 while shirts can be anything from 24-28 in a Nationwide or international game up to, say, 45-49 for a Premiership game which might feature a player wearing a No 40 shirt. Remember that extra-time does not count for these markets.

Bookings: This market works in the same way as the Totals ones (Goals, Shirts, Corners etc). The key thing here though is that points are awarded for yellow and red cards. Ten points are given per red card and 25 points for each red. Note that a player receiving a red card as a result of receiving a second yellow card will be deemed to have been shown one yellow card and one red card (35 points). Any card shown in extra time or after the full-time whistle has been blown does not count.

Time markets: The markets that come under this header include 1st Goal, 2nd Goal, last goal, 1st home goal, 1st away goal, 1st corner, 1st yellow card - For all these markets the firms will set a quote based in minutes which may vary from 7-10 minutes for the first corner up to 70-73 for the first away goal. In all these examples you would sell at the lower figure if you feel the first goal, corner etc will occur before the market-maker's spread. You buy at the higher figure if you believe it will occur afterwards. In the case of 1st markets if the match is 0-0, the make-up for the first goal is 90. If there isn't a booking in the game for example the time of the first booking is 90. The reverse is true for the last markets - if the match ends 0-0 the time of the last goal is deemed to be zero.

Hotshots: This is a popular market where each firm usually picks four players (often the strikers of each team) and gives a quote based on 25 points (rules vary slightly for each firm) per goal from each of the named players. Points are also built in if any of them fail to take part.

Multi-Corners: With four of the five firms this market usually means first half corners multiplied by second half corners. IG go it alone by settling it as the corners of team A multiplied by the corners of team B.

Team performances: Especially popular in live games, this market has a variety of components including corners, red/yellow cards, goals, clean sheets etc.

Golf

Most tournament see indices priced up as well as finishing positions. Finishing positions are almost unique in spread betting in that of you want a player to do badly you would do badly. This is because a good performance from the player will result in a low number i.e. 1 = winner. Finishing positions normally have a maximum make-up unless specifically stated, with 50 the highest or worst a player can finish. For example if Vijay Singh's finishing position is quoted at 20-23 and you buy for £5 (expecting him to play badly) then a second place finish for the Fijian would mean you lose £5x (23 minus 2) = £105. But even if Singh missed the cut and was quoted out of the top 50 you would still only win £5x (50 minus 23) = £135. Both 18 and 72 hole match bets are also available.