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Spread Betting Explained

Spread Betting
While the usual form of betting puts you as a winner or loser, there is a form of sports betting that lets you take advantage of your ability to accurately predict the outcome of a match. Spread betting, as it is known, involves a payout based on how accurate you are with regards to the final scores of a given match. Although it may seem rather complex at first glance, looking into the topic more deeply one finds that it is actually not outside the grasp of a newish sports investor.

Spread betting can be done either online or offline. Some of the most popular online spread betting sites in Britain are Cantor Spreadfair, Finspreads, and Sportingindex. The popularity of spread betting has grown dramatically over the last few years, especially after the 2006 World Cup. More than 1 million spread bets are placed each year, with punters drawn in by the potential for limitless profits.

Yes, you read that right - limitless potential. Unlike fixed odds betting, spread betting does not limit gains or losses. Most sports investors focus only on the unlimited profit aspect. Unfortunately, a 2006 paper put out by City University's Cass Business School claimed that a mere one in five spread bets end in profit.

To be sure that you are that one in five, it is critically important to understand your chosen 'market'. Spread betting is not limited to sports, as it is played based on differences in expected outcomes. Thus, if you get bored with betting on football, you can bet on gas prices, election margins, marriage lengths of celebrities, and so forth. However, unlike other kinds of betting, the depth of your knowledge in a particular area can be a key differentiator in your betting performance, so it is best to specialise.

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This specialisation can help maximize profits whilst minimizing losses. For example, if you know that the average match between Federer and Agassi lasts 48 minutes, but that matches on grass take 5 min. longer, you could bet that the match will run 53 minutes with confidence. The bookmaker may put the match at 50 minutes. If you put £10 on the difference and the match run 55 minutes, you would win £50, or £10 for each minute of difference in your favor. However, if the match goes a mere 43 minutes, you would have to pay £70, £10 for each minute against you. Thus, as you can see, whilst spread betting is not inherently complex, it is best to go in to it with a thorough understanding of the potential losses as well as the potential profits.

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