How to profit from sports spread betting

Many people wrongly believe sports spread betting to be too complex or too risky, however in my experience this misapprehension is most often held by newcomers who do not yet fully understand what is involved. Here I will explain exactly what sports spread betting is, and how you can profit from it.

Sports spread betting is similar to financial spread betting – each market has a buy and sell price and the term “spread” refers to the difference between the two. This spread is the range in which the spread betting company thinks the market will finish.

How does sports spread betting work?

Let’s take a fictitious example. Let’s say you’re looking at a cricket Twenty20 World Cup match. One of the markets that the spread betting company offers is “Total Fours” and the quote a SELL price of 28 and a BUY price of 30. This means that they are predicting that there will be between 28 and 30 fours scored in the match.

When you see the buy and sell prices on offer, you need to decide whether you think the prices on offer are too high or too low. If you think there will be more than 30 fours scored, you would BUY the market at 30. If you think there will be less, you would SELL at 28. If you think the quote is about right, you’d leave it alone and move on.

Where spread betting is different to fixed odds betting is that the more right you are, the more you will win.

If we saw that market priced up with a bookmaker, it would be called something like Under/Over 30 Fours. I’d expect to see something like 1.9 on “under 30 fours” and 1.9 on “over 30 fours”. If you bet £10, the most you could win would be £9 and the most you could lose would be your £10 stake.

So let’s say you think that 30 fours is far too low a prediction. As we’ve already said, if you bet on “over 30 fours” with the bookmaker you would win a fixed amount.

With the spread betting company, you would BUY fours at a price of 30 for maybe £2 per point. That means that for every 4 scored in excess of 30, you would make an extra £2. If there were 38 fours scored you would make a profit of £16 (£2 x 8). If there were 45 fours scored you would make £30 (£2 x 15) and so on.

Of course the reverse is also true. If you called the market wrongly, you would lose £2 for every four under 30 that was scored. If the match ended up with only 25 fours scored, you would lose £10.

How to control your risk and reward

You can control your potential loss in two different ways. You could either set up a stop loss account so that you can fix your maximum potential loss on any market, or you could stick to markets like the one in the previous example where there is a finite boundary.

In this example, it’s impossible for there to be less than zero fours scored, so by buying at 30 you know that the most you can possibly lose is 30 x your point stake. This sort of bet gives you a maximum fixed loss but (in theory) a potentially infinite gain.

Remember you choose your point stake and it can be as low as 10p per point in some cases, so you can not only control your risk at all times, you can also get started and practise with very low stakes.

Most spread betting markets are managed in play, with the buy and sell prices updated as the event progresses. Therefore you also have the option to trade out of your position before the event finishes, either cutting your losses if things look like turning against you or locking in guaranteed profits if they go your way.

How to make profits from sports spread betting

There are no mechanical systems that will help you profit from sports spread betting. As with many things in life, there is no substitute for a bit of hard work. However if you’re prepared to put some time in, it can be very lucrative and I know of some spread betting professionals who do very, very well out of it.

The key to making money from spread betting is to specialise. Choose a very narrow niche – something you are interested in and will be prepared to put some time into researching more thoroughly. By focussing on a very specific and narrow range of markets, you can get to know them inside out and gain an advantage which you can profit from.

Why does this work? Well, the spread betting company employs market compilers whose job it is to set accurate price spreads, but consider the number of markets they need to do this for and you’ll understand that it is inevitable that they will make mistakes. They simply don’t have the resources to research every single market to the same degree that you could by specialising.

Let’s say you’re interested in golf. You might want to choose maybe 5-10 players from the PGA Tour card and follow them in detail. Get to know how they perform on certain courses, in certain weather conditions, and at certain times of the year. How do they react to pressure? Have they recently made any changes to their club supplier, or to their practise regime?

This is the sort of really in-depth information that the market compilers will not have the time to collect, and it can be the key to gaining your edge over them. Armed with this knowledge, you may see that in a particular tournament, the spread has significantly over or under estimated one of your player’s chances of doing well, so you could buy or sell their finishing positions in that tournament accordingly.

Maybe football’s your game. You could follow a selection of teams, and a selection of referees, and focus on the total bookings market. How strict or lenient is today’s ref? How petulant or dirty are the players? Is there some late team news that hasn’t been considered? Is a particular player one card away from suspension and therefore likely to be on his best behaviour today?

There is such a wide range of markets available that you should have no problem finding something you are interested in and can focus your attentions on. Best of all, the information you’ll need is more often than not freely available online. All you need to supply is the time and effort, and you will see the rewards.

Remember that you can start with tiny stakes of as little as 10p, so you can work on your niche area with very low risk, and increase stakes as you grown in confidence and ability.

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I hope you have found this article useful and that it has given you some ideas about how to profit from spread betting. Any comments or questions please let me know.