Spread betting, invented by Charles K. McNeil during the era of the 1980’s, has become more and more popular with both seasoned and beginner punters alike. Born and bred in Connecticut, McNeil was a seasoned bookmaker, and taught mathematics at a local high school in his spare time. Since the 1980’s, spread betting has been adopted all over the world; although the two most popular countries that engage in spread betting are the United Kingdom and the United States.
In short, spread betting is where one person, group or organization places a bet on the outcome of an event. The bookmaker usually sets the odds for such wagers. Unlike traditional bets, which often have a small amount of options (such as Win or Lose), spread bets can have numerous options; making them much different from other betting types such as fixed-odds, par mutual and money-line bets.
With spread betting, a bet is placed on whether the outcome (the result) will either be above or below the spread. The spread is considered a range of results. In the United Kingdom in particular, spread betting has exploded exponentially through the years and has been the driving factor of the majority of growth in the betting sector. With over one million gamblers in the UK market, spread betting allows punters to bet on potentially hundreds of potential outcomes. For many punters, the opportunity to earn a large amount of money for a small wager is exciting.
A recent example of a spread bet that gained international news was on Leicester City winning the premier league. In the year 2015, Bookmakers in the UK gave 5000/1 odds on Leicester City winning the premier league. These extremely high odds were due to the fact that just a year before, Leicester were on the brink of relegation. On paper, Leicester’s team value was up to 10-times below other teams such as Manchester United. As such, the possibility of Leicester winning the league was astronomically impossible based solely on statistics. Albeit, Leicester won the league that season in a dramatic turn, and many punters cashed in on their 5000/1 bets. Some punters picked up a £250,000 payday from bets as small as £50.
In Football for example, there is always a difference in odds between the two teams in the bulk of betting markets. Team A may be considered the best in the world, while Team B have lost 5 games in a row. As such, the odds of Team A winning the game will typically be much lower and will deliver lower returns to the punter.
In spread betting, odds are set so that both outcomes of any particular bet are roughly equal in terms of number of bettors. Bookmakers do not want punters betting heavily on one side (such as Team A winning), and much prefer a balance; such as 50% of punters backing Team A, and 50% backing Team B. With equal backers, and an equal amount of money behind both team, bookmakers can cash in on their commission.
While many players in the UK choose to place bets in person, there are numerous online outlets that handle spread betting, and even offer statistics to the player. Websites such as CMC Markets cover spread betting on financial markets such as currencies; whereas traditional bookmakers rarely offer punters the ability to spread bet on currencies. Traditional bookmakers tend to strictly stick to sporting events; while online sites such as CMC Markets delve further into the market and offer their customers a more varied style of betting options; with the ability to spread bet on markets such as Oil, currencies and even Gold.
While spread betting does come with appropriately leveled risks, it is considered a fairer and more open way of betting; because the punter can choose which options they want to bet on. Multiple options can be chosen; such as the price of Gold-to-Oil moving upwards, as well as Gold-to-USD moving up. Should such a spread bet win, the punter is usually given a better cashout price – because the risk the punter assumed was larger than a simple Yes or No bet. All in all, punters have the opportunity to determine their own level of risk and payout with spread betting.
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