Spread Betting Advantages

  

The advantages of forex and how it differs from stocks. Intraday Spread betting strategies for pound sterling, the euro, FTSE100, gold, silver and Brent. Like any financial product Spread Betting comes with advantages and disadvantages. Find out what they are on this page.

Spread Betting Advantages Odds

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Page Summary:
Like any financial product Spread Betting comes with advantages and disadvantages. Find out what they are on this page.
The advantages
  • Tax free profits - Spread betting is classed as gambling so profits are 100% tax-free. Another advantage is that you won't have to fill in any trading related information on your annual tax return.
  • No commissions or Stamp Duty - The spread bet broker makes his profit on the difference between the bid-offer spread, so dealing is not technically free. But if you trade shares on the London stockmarket is not necessary to pay the Stamp Duty at 0.5%. Saving 0.5% might not seem so much but it's a hell of a saving if you regularly short term trade individual stocks. See Secret 3 - The cost of doing business - It's more important than you think - which is one of our 10 Secrets to Successful Spread Betting
  • Leverage - It's both an advantage and disadvantage (see below). The advantage factor is where small movements in the underlying can translate into large profits as a percentage of money risked.
  • Trade with smaller amounts of money - The minimum bet size is usually £1 a point which is great for those starting out as any losses can be kept under control. See Secret 1 - Trade small positions when starting out - which is one of our 10 Secrets to Successful Spread Betting
  • One account - access to all the markets - With one single account you can have access to virtually all the important global markets. Trade Gold today, Vodafone shares tomorrow, the Japanese Nikkei and Google the next.
  • The ability to short sell - Selling short is where profits can be made from lower prices. For example, you could sell short the Dow Jones at 10,000 and buy it back at 9,500 for a 500 point profit. More on short selling here
  • Good liquidity - The spread betting firms will always offer a 2-way dealing price whatever the market conditions. This means traders can always take profits and losses.
  • 24 hour trading - Many of the world's bigger markets now trade 24 hours a day. And whereas you might not want to deal at 11pm, the ability to do so is always welcome.
  • Good internet software - Most spread betting business is done via online software and collectively the brokers have developed outstanding trading platforms. The software can also be used for charting, research, setting price alerts etc. See my review of the 2 best spread bet brokers
  • Plenty of training free offered - Many of the brokers offer their clients complimentary training courses, whether online, in print or informal 1-2 hour meetings. See Secret 10 - Beware of 'marketers' selling expensive trading courses and systems - which is one of our 10 Secrets to Successful Spread Betting
  • Controlled risk bets - Spread bet profits and losses can be open-ended, ie you never know how much you're going to make or lose when the trade is first initiated. But the brokers will also offer controlled risk bets where the potential loss can be fixed. These are more expensive than a normal trade but can offer peace of mind. More information on Controlled Risk bets.
  • Credit offered - Depending on who you are and your credit rating the spread betters can offer a credit account. To some this might be an advantage.
  • No currency risk - All spread bets, even those on non-UK markets can be traded in Sterling so there's never any currency risk or need to change Sterling into Euros or Dollars etc
  • Unique markets - It's not just the big markets available. Spread betting offer markets such as property as well as Binary Bets which are similar to fixed odds bets - more information on Binary Bets

Spread Betting : Advantages

  • Leverage - Leverage is similar to fire - it can be your best friend but also your worst enemy so it must be both respected and used intelligently. Don't forget the streets of Wall Street and the City of London are littered with good traders who lost it all because they used too much leverage..
  • Tax-free - Tax-free is only an advantage if you make profits. But if you lose the losses cannot be offset against capital gains made elsewhere.
  • Unable to bid or offer the market - With most financial products you can often buy at the bid price and sell at the offer. But with spread bets you'll always have to pay the offer or sell the bid and that can be expensive if a lot of trading is done.
  • Bid-offer spreads can be wide - The brokers don't charge commissions as their profit is built into the bid-offer spread. Some punters have previously complained the spreads are often too wide and this may be true. However, bear in mind that wide bid-offer spreads usually do the most damage to short term traders. See Secret 3 - The cost of doing business - It's more important than you think - which is one of our 10 Secrets to Successful Spread Betting
  • Credit is offered - Depending on who you are and if you've got a good credit rating the spread betters can offer credit accounts. To some this might be an advantage but to others it will only cause problems. My advice is simple - only trade with cash you can afford to lose and don't use credit
LearnMoney comment:
Far more advantages and disadvantages and that's obviously good. But pay special attention to leverage as it's like fire - your best friend but it can also be your worst enemy.

For this reason I'd advise anyone who's starting out in the spread betting world to tread carefully and bet the smallest stakes possible until you truly appreciate its power - Disregard this advice at your peril.

  • See Secret 7 - Don't kid yourself, spread betting is a hard nut to crack - which is one of our 10 Secrets to Successful Spread Betting

There are good spread bet brokers and there are bad ones.

Having a good broker won't guarantee you profits but a bad broker will probably lead to losses as a combination of their gamesmanship and suspect software takes its financial toll.

So who do I recommend?

Simple, the 2 brokers I personally use for my own spread betting (and I've used them for years) -

FREE Report : How to Learn Spread Betting and Prosper
How to build the all-important trading experience
Where to get trading help and advice
Which broker to use and why
Simple 2 month training plan to follow
Download the FREE report



5 minute guide to Spread Betting - 10 Secrets of Successful Spread Betting

Spread Bet Tutorials
The BasicsPros & Cons
Order TypesMarkets to trade
Short SellingWho to open an account with
Stop LossesSpread Bet Broker review
Hidden value of stop LossesSpread Betting FAQs
Guaranteed Stop Losses
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Advantages & Disadvantages

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Sports betting is the activity of predicting sports results and placing a wager on the outcome. The general role of the bookmaker is to act as a market maker for sports wagers, most of which have two or three outcomes: win, lose or draw.

Spread

Popular bookmakers

  • Bet365
  • WilliamHill
  • PinnacleSports
  • BWin
  • BetFair
  • LadBrokes
  • Expect
  • EuroBet
  • Betsson
  • SportingBet
  • UniBet

Betting glossary


A

AccountA bettor's bookmaker account.
AccumulatorA bet on two or more selections; all of which must win to gain a return.
ActionA bet/wager of any kind.
AdvantageA bookmaker's commission.
All-upA bet on two or more selections; all of which must win to gain a return.
Ante postThis is a bet that is placed in advance predicting the outcome of a future event.
ArberA punter who manipulates the market and sets a profit by supporting all the results of an event at a collective book of less than 100%
Arbitrage (Arb)Where a variation in odds available allows a bettor to back both sides and guarantee a win.
Asian HandicapThis is the Asian equivalent of the spread and is used to balance two sides and remove the draw from the game

B

Bankroll (BR)Indicates how much credit there is in a bettor's sportsbook account.
BetTo risk something (money) on the outcome of a future event.
Betting taxA tax on a bookmakers turnover.
BettorSomeone that makes a bet.
BonusRewards granted by bookmakers for bettors.
BookieSlang for a bookmaker.
BookmakerA person or establishment that accepts bets on sports competitions or/and horseracing.
Buy(ing) pointsTo pay an additional price on point spread games in order to receive half a point or more in your favor.

C

Closing lineThe final list of point spreads offered before the game.

D

Deposit bettingBetting with money deposited in advance with a bookmaker.
DividendThe payout or return on any bet
DoubleA bet on two selections; both of which must win to gain a return.
DrawA finish to a competition with identical results.
DriftOdds that have lengthened.

E

EdgeA bookmaker's commission.
Even moneyA 2.00 (1/1) odds bet.
EventAnother term for a race, tournament, match or any betting contest.

F

Favored (Favoured)A team (competitor, contestant) that is popular with the bettor.
Favorite (Favourite)The expected winner of a game/race; the entrant with the lowest odds.
First half betA bet solely for the outcome of the first half of a game.
FoldAn indication of the number of selections in an accumulator (e.g. 7-fold - 7 selections).
FutureThis is a bet that is placed in advance predicting the outcome of a future event.

G

GambleTo risk money on the outcome of an event.
GamblerSomeone that makes a bet.
Getting downPlacing a bet or making a wager.

H

Half time betA bet placed only on the second half of a game.
HandicapReferring to the points given to the underdog to level the odds with the favorite.
HandicapperOne, who studies, rates and predicts outcomes of sporting events or races.
HedgingPlacing bets on the opposite side in order to cut losses or guarantee a minimum amount of winnings.
Home team (Home)The team that is playing in their own town/stadium.

I

In-play bettingRefers to live match betting in which it is possible to bet on the outcome or elements of a match while it is still in play.

J

JuiceA bookmaker's commission.

L

Lay a betAn acceptance of a bet by a bettor to the bookmaker.
Lay a priceBetting the favorite by laying money odds.
Lay(ing) the pointsBetting the favorite by giving up points.
Layoff betA wager made by one bookmaker with another to help balance his action and reduces his risk on one side or one horse.
LengthenThe movement by the line maker of odds so that they are made longer.
LimitThe maximum amount a bookmaker will permit a bettor to wager on certain odds (outcome).
LineThe betting proposition - the current odds or point spread on an event.
Line moveA change in the odds on a particular team by the Linemaker.
LinemakerThe person who sets the betting lines for a sportsbook.

M

Money line (ML)Odds expressed in terms of money. If the money line has a minus (-), you lay that amount to win a hundred dollars; If the money line has a plus (+), you get that amount for every hundred dollars wagered.
Move the lineTo pay an additional price on point spread games in order to receive half a point or more in your favor.
MultipleA bet on two or more selections; all of which must win to gain a return.

N

Neutral siteArena, court or field where neither side has a home field advantage.
No actionA bet where no money is lost or won.

O

OddsThe likelihood of the outcome occurring, stated in numbers form. The bookmaker's evaluation of the chance of a team/competitor winning. It is adjusted to include a profit, otherwise known as the bookmaker's edge.
Off the boardThis is the term for a game that a bookmaker refuses to accept any bets.
Open betA bet that has not yet been closed or settled.
Opening lineThe first line posted for an event.
OutcomeAn outcome (result) of event.
Outlaw lineAn early line which is not an official line
OutsiderA long-odds team/competitor that is not one of the favorites and is not expected to win.
OverA wager on whether the total of the match will be over the priced amount.
Over/UnderThe opportunity to bet on the total of the game. A bettor can choose over or under the priced amount.
OverlayWhen the odds on a proposition are in favor of the bettor rather than the house.

P

ParlayA bet on two or more selections; all of which must win to gain a return.
Past postTo make a bet after the event has started.
PayoutA payout is how much a bettor receives from the bookmaker as a consequence of winning the bet.
Pending betA bet that has not yet been closed or settled.
Permutation (Perm)All possible combinations of a particular bet type applied across all selections, is referred to as a perm, or permutation. For example, 3 Doubles can be permed from 3 selections.
PlaceTo wager on the team/competitor/horse to finish in the top two, three, four or five in an event/tournament.
PlayerSomeone that makes bets.
Point spreadThe scoring differential between two opponents predicted by a linemaker. When placing a bet on the spread line, the favorite is represented with a minus (-), and the underdog is represented with a plus (+).
PostponedWhen an event is cancelled and rescheduled for a later date.
PriceBetting term for the Odds or Point spread. A price is decided by the bookmaker to reflect the chances of that particular team/competitor winning or placing in an event field.
ProfitThe profit is simply the return minus the total stake, which if negative indicates a loss.
Proposition bet (Prop)This type of bet is odds set by the bookmaker on unique and various topics (politics, pop music, etc).
Puck lineGiving odds of a goal spread instead of using a Canadian line, which uses both a goal spread and money line.
PunterSlang term for a bettor.
PushA push is when there is no winner or loser in a bet.

R

Rained outA game that is cancelled because of bad weather.
ReturnYour total winnings on a bet.
Risk free betA risk free bet involves covering all possible outcomes on a particular event at the correct odds in order to eliminate any risk
Run lineRefers to baseball when a spread is used instead of a money line.
RunnerA person that places bets on behalf of someone else in an effort to disguise the identity of the true bettor.

S

ScalperSomeone who attempts to profit from the differences in odds from different books by betting both sides of the same game at different prices.
SharpA professional gambler.
ShortenWhen a bookmaker reduces the odds. The opposite to lengthen.
SingleA bet consisting of one selection which must win for you to make a profit.
Special betThis type of bet is odds set by the bookmaker on unique and various topics (politics, pop music, etc).
Sportsbook (Book)A person or establishment that accepts bets on sports competitions or/and horseracing.
SpreadReferring to the points given to the underdog to level the odds with the favorite.
Spread bettingA bet is won or lost according to whether you correctly predict the result of an event. Returns or losses are calculated in proportion to how right or wrong the bettor is, and can lead to huge returns or losses.
StakeAnother term for a wager.
Straight betA bet consisting of one selection which must win for you to make a profit.
SystemA method of betting, usually mathematically based, used by a bettor to try to get an advantage.

T

Taking the pointsTo bet the underdog and take the points advantage.
Taking the priceBetting on the underdog and accepting money odds.
TieA finish to a competition with identical results.
TipsThe selections and predictions of competitor's performance for an event from an expert or observer.
TipsterSomeone that offers tips on events.
TotalThe combined amount of goals, points or runs scored by both (all) teams in a game or event.
Total betA bet in which the bettor speculates that the total score by both teams in a game will be more (Over) or less (Under) than the line posted by a bookmaker.
ToteA system introduced to Britain in 1929 to offer pool betting on racecourses.
TrebleA bet on three selections; all three of which must win to gain a return.
True oddsThe real odds of something happening as opposed to what bookmakers offer.

U

UnderA wager on whether the total of the match will be under the priced amount.
UnderdogThis is the team/competitor that is the least likely to win and has a large price.
UnderlayWhen the odds on a proposition are in favor of the house.

V

ValueThe best odds on a betting proposition - those with the lowest bookmaker's edge.
Value bettingIf you believe the odds taken are better than the mathematical chance which the team involved has of pulling off the outcome, then you have a value bet
Versus (VS)Against
Vigorish (Vig)A bookmaker's commission.

W

WagerTo risk something (money) on the outcome of a future event.
Win onlyA bet on a team/competitor to win an event.
Wise guyA well informed and successful bettor.

Spread Betting Advantages Definition

Page time:
Thursday
03-11-2021
06:29:47 UTC