What Spread Betting is...
Date: Nov 17th, 2009 10:13:55 pm - Subscribe
Mood: geeked
A bet is made against a 'spread' (or index), on whether the outcome will be above or below the spread. The amount won or lost depends on the level of the index at the end of the event. The spread represents the index firms' margin.
The concept has a long history in American sports betting and was exported to the United Kingdom in the 1980s. In North America the bettor usually bets that the difference in the scores of two teams will be less than or greater than a value specified by the bookmaker. For example, if a bettor places a bet on an underdog in an American football game when the spread is 3.5 points, he is said to take the points; he will win his bet if the underdog's score plus 3.5 points is greater than the favorite's score. If he had taken the favorite, he would have been giving the points and would win if the favorite's score less 3.5 points was greater than the underdog's score.
Spreads may be specified in half-point fractions to avoid ties, or pushes. The winner of a North American spread bet wins the amount that he has bet, while a losing bettor loses the amount wagered plus the bookmaker's commission, which is commonly known as the vigorish or vig, and is usually 10 percent of the original wager; in the United Kingdom both sides are held at odds of 9-10. In North American betting a push is treated as if no bet at all had been made, while in the United Kingdom "dead heat" rules apply, resulting in a net loss of ?5 on a ?100 wager due to the 9-10 odds of the proposition.
If a key player on a side is marginally injured and may or may not play, the "sports book" — or establishment that handles the bets — may declare the game off-limits to bettors (by not quoting any spread at all on it), or may "circle" the game; in the latter scenario, lower maximum amounts for each bet are enforced (typically $5,000 instead of the $25,000 limit observed at most Las Vegas sports books) and certain specialty wagers, such as "teasers," are banned on either side in the game. (A "teaser" is a bet that alters the spread in the bettor's favor by a predetermined margin, often six points - for example, if the line is 3.5 points and the bettor wants to place a "teaser" bet on the underdog, he takes 9.5 points instead; a teaser bet on the favourite would mean that the bettor takes 2.5 points instead of having to give the 3.5. In return for the additional points, the payout if the bettor wins is less than even money. At some establishments, the "reverse teaser" also exists, which alters the spread against the bettor, who gets paid off at more than even money if the bet wins.)
Comments: (0)
Create your own Free Aeonity Blog Today
Content Copyrighted spreadbett at Aeonity Blog
