Spread Betting is much easier to understand than some people think. Here we explain spread betting by use of a simple example that will help you grasp the concept. The Spread Betting firm makes a prediction on a particular aspect of a sporting event, such as how many goals will be scored in a game of football. Their spread may be 2.4-2.7 goals on a particular football match. You have the choice of going below 2.4 goals if you think few goals will be scored or above 2.7 if you expect a flood of goals.
Example 1: You go lower than 2.4 goals (called “selling” the goals) for say £10 a goal. If the match ends 0-0 then you have won 2.4 x £10 = £24. However if there were four goals you would lose £16.
Example 2: You go higher than 2.7 goals (called “buying” the goals) for say £10 a goal. If the match ends 2-2 then there have been four goals and you win £13 (4 goals – 2.7 goals = 1.3 goals x £10). However if there were no goals at all you would lose £27.
In short, you just need to decide whether their prediction is too high or too low. The concept is that simple.
Now apply that concept to a volatile market, like how many cricket runs a team (or individual batsman) will score and you can see how profits can quickly mount with spread betting.
The rule of thumb is have bigger stakes on low volatility markets (like goals in a football match) and low stakes on volatile markets (like series cricket runs). Our idea of the best spread betting firm in the world is Sporting Index.