How Spread Betting Differs from Fixed Odds

Range of Payouts

Spread betting has a wide range of different payouts depending on the settlement price (see ‘An Example: Buying ‘Total Points’’), The range of payouts can appeal over fixed odds betting which often has just two payouts (a complete loss of stake, and a return of stake and complete winnings). As an example if you were to place a fixed odds bet of £50 at even money on a team to win a football match then you would effectively wager your stake against the full returns. You will either lose your entire stake, or win all of the available returns. This means that should your team have a last minute penalty with the scores level, the penalty alone would decide a swing of £100 (£50 loss against £50 profit).

Some traditional fixed odds bookmakers may offer markets on total goals, cards, corners and goal minutes however these will always be as an ‘over’ or ‘more than’ against an ‘under or ‘less than’. This means that as in the example given above a single occurrence happening (i.e. one goal, one card, one corner) may swing the result between losing your stake, and winning all the available profit.

With fixed odds betting long odds can be achieved by betting over at the top end of the range, or betting under at the low end of the range. As an example fixed odds of 10/1 might be offered on there being 6 goals or more in football match and therefore as described above you would be able to gain a large profit relative to stake. The spread betting equivalent of this would be to buy goals, let’s suppose this is at an opening price of 3 goals. Image 1 below looks at a couple of the results possible for this and the different payouts between fixed odds and spread betting.

As you can see in image 1 by spread betting you would get a very different return at no goals than you would at 5 goals, with a perceived fairer payout awarded at each. This means the total liability and risk is a lot higher than the fixed odds option which leads to a single stake loss even if there are no goals and the bet was a long way off winning. However in spread betting you would be rewarded at 5 goals whereas on fixed odds 5 goals would be deemed to be unlucky not to win yet still gain a zero payout. Furthermore at 7 goals further profit would be gained from spread betting, whereas fixed odds would still give the same return for winning your bet of 6 goals or more meaning the 7^th goal would go unrewarded.

Betting on Processes

Another main distinction between spread betting and fixed odds betting is that you don’t have to rely on a very specific single event happening in spread betting meaning the risk can be diversified. In fixed odds betting you might bet on a team winning by a correct score, or a certain player to score the first goal of a match. This requires a relatively narrow outcome of events happening compared to if you were to spread bet on the overall performance of a player or of a team in a football match. When doing this you may be rewarded for a wide variety of events such as goals scored, assists, corners, free kicks and even passes completed.

Maximising Returns from Favourites

If you were to bet at fixed odds on something likely to happen (such as a top of the league team to win at home) this will be offered at short odds, meaning a large stake outlay and risk for a moderate profit/return. In spread betting you would be able to make greater returns from backing this team’s performance, provided they performed well and won convincingly. Image 2 shows the supremacy market for a Champions League match between Schalke Vs Olympiakos. Schalke are strongly fancied (1.25-1.45 goals ahead) and would be very short odds in fixed odds betting. In this case if Schalke won by 3 or 4 goals you would be rewarded with high returns by spread betting on their performance.

Market variety

As discussed above (see: ‘Markets Offered’) the variety of bets in spread betting is much greater than traditional fixed odds betting. This is because for any aspect of a game an average outcome can be set by a bookmaker, allowing buying or selling against that price.