What is Spread Betting?

In spread betting, a prediction is made on various sporting or financial events, and you have the task of deciding whether that prediction has been pitched too high or too low. You don't have to be exactly right - as long as you are in the right direction, you will make a profit. The more right you are, the more you win. Of course, the converse is true - if you guess wrong; the more wrong you are, the more you lose.

Predications are presented in the form of two prices, with the range between them known as the 'spread'. If you think the prediction was too high, you would bet on the first of the prices - the low price. This is also known as a 'Sell'. If you thought the prediction wasn't high enough, you would bet on the second price - the high price. This is known as a 'Buy'. What you win or lose depends on the stake size you choose and how right or wrong you are.

Example

The bookmakers might predict that the first goal in a match between Manchester United and Chelsea will be scored in the 23rd minute, and consequently set a spread of 22 - 24 minutes.

If you believe that a goal will be scored earlier than this, you would go LOW at 22 minutes, whereas if you think a goal will happen later in the game, you would go HIGH at 24 minutes.

If the first goal is scored in the 15th minute, anyone who went LOW at 22 minutes would win the bet, as they correctly predicted that the first goal would happen early. They would win their stake money multiplied by the number of minutes that the goal was scored before the predicted low time. In this case, the goal came 7 minutes (22 - 15) before the LOW prediction. So you would win back 7 times your stake money.

However, if you had gone HIGH, you would lose the bet, as you incorrectly predicted that the first goal would occur later in the game. The amount you would lose would be your stake money multiplied by the number of minutes the goal was scored before the predicted high time. In this case (24 - 15) = 9 times your stake money.

As you can see from this example, spread betting involves a high level of risk and you can lose much more than your original stake.