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What is the difference between Fixed Odds Betting and Spread Betting?

What is the difference between Fixed Odds Betting and Spread Betting?
Asked by
Curtis Davis categorie-icon time-icon8 months ago
1 Answer Answer Question

Justin Freeman
Answered time-icon8 months ago

Spread betting involves taking a position based on whether you think the price of an asset will go up or down. The size of your profit or loss will be determined by the stake you place and how far the price subsequently moves away from your entry price.

Fixed Odds betting is when you take a position on whether or not a certain event will occur.With fixed odds betting the potential profit or loss is set by the odds that the bookmakeroffers, and you enter into a binary win or lose scenario. If your desired outcome does not materialize you lose the stake you placed. Spread betting involves having a variable range of profit or loss, and your winnings or losses can be numerous multiples of the original stake size.

If you think Real Madrid will win their next match by a score line of 3-1 and you place a £1 stake atfixed odds of 10/1 from a bookmaker; should the result be as you predicted, you will receive £11. That is made up of the original stake £1 and the £10 winnings. If any other score occurs, you lose your £1 stake.

You could place a spread bet on the same match. Again using a £1 stake you Buy goals after being offered a bid/offer price by a broker of 1.5-2.5 goals. Should the scoreline be 3-1 and the total goals number 4 then you’d win £1.50. Calculated as 1.5 points difference between what you bought and what materialized, multiplied by your stake of £1.

The Live Pricing that is associated with Spread Betting introduces a dynamic element. Should all of the goals have been scored in the first ten minutes of the match then the broker offering the spread, anticipating more goals to be scored at some point during the match would increase the bid/offer; for sake of argument let’s say the price offered moves to 5.5-6.5. At that point, with 80 minutes of the match to play you could close out the ‘Buy Goals’ position by selling at 5.5.  Difference between entry and exit price would be 5.5-2.5 = 3. Multiplied by your stake of £1 you would have realizedwinnings of £3 only ten minutes into the game.

Stepping right back to your initial position of Buy goals at 2.5.  If the game had ended goalless then you would have lost 2.5-0 x £1 = £2.5

Whilst fixed-odds betting is more passive in nature the fact that the event is clearly defined allows you to bet on a sequence of events occurring. Multiple bet options such as Accumulators offer odds on two or more events occurring and pay out only if all you correctly predict the outcome of all of the events.

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