What is spread betting? Spread betting explained - how it works

What is Spread Betting?

Spread Betting is not complicated. Like driving a car, many people decide that it is too difficult without even giving it a try. In fact, once the simple concept has been grasped, it becomes extremely easy to understand.

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.

You simply decide whether their prediction is too high or too low.

If you think that they are spot on, you don't bet. It's that simple.

Remember the television show, 'Play Your Cards Right'? The basic concept is exactly the same. "Higher Higher! Lower! Lower! The amount you win or lose depends on how right or wrong you are.

With a basic understanding of this concept, spread betting is easy to understand. Never lose sight of that image of the host gesturing to the audience on whether a contestant should go higher or lower. He could say, "The bookmakers reckon England will score 250 runs", 'what do you reckon? "higher or lower?"

Every time the bookmakers make a prediction they are asking you the same question…

How Does it Work?

When you choose to challenge one of their predictions, you must decide the size of your betting stake.

The amount you win or lose depends on the size of your stake multiplied by how correct or how wrong you are.

Let's say that they predict that there will be 3 goals in a football match. You reckon that there will be more so you bet higher with a stake of £10 for every goal above 3.

If there were 5 goals in the game, you would have won (5 - 3) x your stake = 2 x £10 = £20.

If only 2 goals had been scored in the game, you would have lost (3 - 2) x your stake = 1 x £10 = £10.

Before you start Spread Betting for real, try a short free training session in the Spread Betting Training Ground - and if you want to play for real, check out the Sporting Index * site.