My thanks to Bill Blakeman of http://www.web.protipsmembers.com/ for this quick introduction into the world of spread betting
Spread betting has been around for a long time. Its origins though, are very much in the financial market arena – where city traders buy and sell shares, indices, pork bellies etc that they do not own. In other words, they are betting on the future price of an entity – that the value of something will go up or down from when they place the bet.
Spread betting in the UK is currently free from any kind of taxation. As a result of this, many people are looking to financial spread betting as a long-term investment. With no advisors cut, income tax or capital gains tax it’s easy to see how spread betting may be considered attractive!
I consider spread betting an essential weapon in the armoury of any serious punter. Spread Betting is a leveraged product, which basically means that the more right or wrong you are – the more you win or lose. Consider that not so many years ago, you had the choice of backing a horse to win or place.
Betting exchanges now allow you to lay horses as well. Although technically the spread-betting firms offered this service already in the form of ‘selling’ a selection– it was only when Betfair started up, that the concept of betting on a horse to lose really became popular. In order to understand and profit from spread betting – it is essential to understand the mathematics involved in this kind of betting. This can be quite complex. However, if you take the time to fully understand and master even small areas of spread betting – then you will find this an excellent way to increase profits.
Spread betting offers advantages over any other betting medium in that you can not only bet who will win and lose, but also by how much. You can bet who will under-perform or over-perform in terms of their market position and bet on one horse beating another by a wide margin.
As an example, a good strategy to follow would be in a race like this:
At Cheltenham in a novice chase, there is a red hot favorite that is trading at 41-44 on the 50-25-10 market (or Individual Race Index, as it is known). I think the horse will win if he stands up but may well not finish given his inexperience and the stiff fences. If I sell him at 41, then if he falls I have won 41 times my stake. I am risking 9 times my stake if he wins but I think that is worth the risk. I will also win if he finishes second or third. Opportunities like this can be found quite frequently and often offer greater value than fixed odds betting. If this were a flat race, then my bet is not especially good… but in a novice chase; the likelihood of 0 points is much greater.
You might think this is factored in to the prices but it isn’t always. Spread betting firms offer a vast array of markets on many different sports and the prices they offer are largely set by a team of traders – or often a single trader. That means that they are liable to make mistakes like the rest of us (and they do make many!) and this presents us with some good opportunities. One of the problems faced by spread betting firms is that they have a relatively tiny number of active clients and many of them are serious high stakes players. This can mean that prices move one way or another due to weight of money on one outcome, which sometimes means that there is value lurking elsewhere. If you have never tried spread betting then I would suggest that you take a look at what markets are on offer. Just spend a bit of time watching the action unfold and see how the spread quotes shift. My thanks must go to Billy Blakeman from www.web.protipsmembers.com for this insight into how spread betting can offer us returns far in advance of traditional laying.
Do take a look at www.igindex.co.uk and look at the Sports Platform. To get an idea of the 50 index, click on ‘Horse Racing’ under the Sport section, in the drop down box.
Under category, select the meeting in question. Under Event you will have the opportunity to look at specialist bets, but that’s something for another time. We are interested in the actual race and the 50 index. As Bill explained, 50 points are awarded to the winner.
Let’s say we have seen a horse priced 12 – 11 12 TO SELL and 11 TO BUY.
If we fancy that horse will place, we will be given 30 points for 2nd place, 20 points for 3rd and 10 points for 4th place. (Taking away the 11 – so that’s 39 points profit for the win, 19 points for 2nd place and we get 9 points for 3rd place. If the horse finishes 4th what happens? Yes we win 10 points – that is below the 11 points we effectively backed, meaning we lose 1 point.
If we think this is NOT going to be a good day for the horse, we can sell the horse’s performance at 12, meaning if the horse is unplaced, we will profit. It’s far easier seen than explained, so I urge you to take a look at the 50 index especially. As Bill said, the opportunity to leverage returns can be great especially when we have a short priced favourite, in a novice chase, in heavy ground, over 3 miles. Surely selling this horse’s performance, given the factors, is better than buying that horse (effectively backing it!)
Used judiciously, the leveraged aspect of spread betting can prove an ever better alternative to traditional laying.