Spread bet is one of the different types of bets on the result of an event in which payments are based on betting accuracy, rather than simple "win or lose" results, such as fixed bets -odds (or money-lines) or parimutuel bets.
A spread is the result range and the bet is whether the result will be above or below the spread. Spread betting has been a huge growth market in the UK in recent years, with the number of gamblers heading for one million. Financial spread bets (see below) can carry a high level of risk if there is no "stop". In the UK, betting spreads are regulated by the Financial Conduct Authority rather than the Gambling Commission.
Video Spread betting
Destination
The general purpose of spread betting is to create an active market for both sides of binary bets, even if the results of an event can appear prima facie be biased towards one side or another. In sporting events, strong teams can be matched against historically weaker teams; almost every game has favorites and a oppressed . If the stakes are only "Will it be a favorite win?", A larger bet is likely to be made for favorites, perhaps in such a way that there will be very few bosses willing to take underdogs.
The point is, actually it is a defect against the unseeded. The bet becomes "What is a favorite victory with more than spreading point?" The spreading point can be moved to any level to create the same number of participants on each side of the bet. This allows a dealer to act as a market maker by accepting bets on both sides of the spread. The bet imposes a commission, or spirit , and acts as a counterpart to each participant. As long as the total amount at stake on each side is more or less the same, the bet is not concerned with the actual result; profit even comes from the commission.
Since the spread is meant to create the same amount of bets on both sides, the implied probability is 50% for both sides of the bet. Fortunately, bets must pay one side (or both parties) less than this notional amount. In practice, spreads can be regarded as marginally advantageous on one side, and betting makers often revise their chances to manage the risk of their events.
One important assumption is that to be credited with victory, one team only needs to win with a minimum of game rules, regardless of the margin of victory. This implies that the team in a winning position will not always try to extend their margins - and more importantly, each team just plays to win rather than beat the spread points. This assumption does not always apply in all situations. For example, at the end of the season, the total points scored by the team can affect future events such as nursery playoffs and positioning for amateur designs, and teams can "raise" scores in such situations. In almost all sports, players and other field contributors are prohibited from engaging in sports betting and thus have no incentive to consider spreading points during play; any attempt to manipulate the outcome of a game for gambling purposes would be regarded as a match setting, and the punishment is usually the lifetime exclusion of the sport, such as a lack of tolerance for gambling in sports.
Maps Spread betting
Spread in sports betting (U.S.)
Spread betting was created by Charles K. McNeil, a mathematics teacher from Connecticut who became a city in Chicago in the 1940s. In North America, gamblers usually bet that the difference between the two team scores will be less than or greater than the value determined by the city. An example:
- The bet advertises the distribution of 4 points in certain games; If gamblers bet on "underdog", they are said to take points and will win if the underdog score plus spread is greater than the favorite score. 8 8 10 , so gamblers win;
- The final score is Underdog 8 , Favorites 13 : 8 4 & lt; 13 , so gamblers lose.
- The final score is Underdog 5 , Favorites 10 : 10 - 4 & gt; 5 , so gamblers win;
- The final score is Underdog 8 , Favorites 10 : 10 - 4 & lt; 8 , so gamblers lose.
Spreads are often, though not always, specified in half-point fractions to eliminate the possibility of a tie, known as push . In terms of encouragement, the game is considered no action , and no money is won or lost. However, this is not a desirable outcome for sports books, because they are forced to refund money on every bet, and although both the book and the bettors will be even, if overhead costs are taken into account, the book has actually lost money. by taking a bet on the event. Sports books are generally permitted to declare a "winning bond" or "lost bond" to avoid having to refund money per bet.
Betting on sporting events has long been the most popular form of spread betting. While most bets offer casinos to players having an inbuilt edge at home, betting on spreads offers an opportunity for astute gamblers. When a casino receives a spread bet, it gives players a chance of 10 to 11, or -110. That means that for every 11 dollars players bet, players will win 10, slightly lower than the even money bet. If team A plays team B, the casino does not care who wins the game; they are only concerned with taking the same amount of money from both sides. For example, if one player takes Team A and the other takes Team B and each bet is $ 110 to win $ 100, no matter what team wins; The casinos make money. They take $ 100 out of $ 110 from losing bets and pay the winners, saving extra $ 10 for themselves. This is the edge of the house. The goal of a casino is to establish a line that encourages the same amount of action on both sides, thus ensuring a profit. It also explains how money can be made by clever gamblers. If the casino sets out a path to push the same amount of money on both sides, the casino sets it based on the public perception of the team, not necessarily the real team strength. Many things can affect public perception, which keeps the line from what should be the actual line. The distance between the Vegas line, the real line, and the difference between the line and other sports book spreads is where the value can be found.
A teaser is a bet that turns the gambler's beneficial spread to a predetermined margin - in American football, the teaser margin is often six points. For example, if the line is 3.5 points and the bidder wants to place the decoy bets on the unseeded, they take 9.5 points instead; teaser bets on favorites would mean that gamblers take 2.5 points instead of having to give 3.5. In return for extra points, payouts if the gambler wins less than money, or the gambler has to bet on more than one event and both events must win. This way is very similar to parlay. In some companies, an "inverted teaser" also exists, which changes the spread of the gambler, who is paid more than every time if the bet wins.
Sports spread bet
The sports betting spread began in the UK in the late 1980s to offer an alternative form of sports betting to traditional fixed odds, or fixed risk bets. With a fixed odds bet, a gambler places a fixed-risk bet on a certain fractional or decimal opportunity on the outcome of a sporting event that will provide known returns for a result or known loss if the result does not occur (early betting). With sports betting, gamblers bet on whether the results specified in sporting events will end above or below the 'spreads' offered by sports betting companies, with gains or losses determined by how much above or below the final finished spreads.
Spreads offered will refer to the betting firm's predictions on the range of end results for a particular event in a sporting event, e.g. the total number of goals to be scored in a football match, the number of matches the team will score in a cricket match or the number of matches between the winner and the second place winner in the race race.
Gamblers can choose to 'buy' or 'sell' on spreads depending on whether they think the end result will be higher than the top end of the offered spread, or lower than the lower end of the spread. The more precisely the gambler the more they will win, but the more wrong they are the more they lose.
The rate of profit or loss of the gambler will be determined by the size of the bet chosen for the bet, multiplied by the number of unit points above or below the gamble bet level. This reflects the fundamental difference between sports difference bets and fixed-opportunity sports bets in which the level of winnings and losses is not fixed and can be many multiples of the original selected bet size.
For example, in a cricket match, a scattered sports betting company can list the deployment of a team estimate at 340 - 350. Gamblers can choose to 'buy' at 350 if they think the team will score more than 350 runs in total, or sell at 340 if they think the team will score less than 340. If the gambler chooses to buy at 350 and the total 400 team score runs, the gambler will win 50 unit points multiplied by their starting share. But if the team scores only 300 runs then the gambler will lose 50 unit points multiplied by their initial share.
It is important to note the difference between spreads in sports betting in the US and sports spread betting in the UK. In the US betting on spreads effectively is still a fixed risk bet on the line offered by bets with known returns if the gambler is properly betting with the oppressed or favorites on the offered line and the known losses if the bet is wrong on the phone. In the UK, bets above or below the spread do not have any known final gains or losses, with these figures being determined by the number of unit points, the final rate ends above or below the spread, multiplied by the stock selected by the gambler.
For betting companies scattered across the UK, any end result that ends in the middle of the spread will result in profits from both sides of the book because the buyer and seller will end up making a point unit loss. So, in the example above, if the cricket team finally scored 345 runs the second buyer in 350 and the seller at 340 will end up with a loss of five unit points multiplied by their share.
Total top (bottom/bottom)
In addition to betting spreads, the most common "side bets" on an event are total (commonly called over/under or O/U ) bet. This is a bet on the number of points scored by both teams. Suppose Team A plays a B team and the total is set at 44.5 points. If the final score is team A 24, team B 17, the total is 41 and bettors taking below will win. If the final score is team A 30, team B 31, the total is 61 and the bidder taking more will win. This total is popular because it lets players bet on betting on their overall game perception (eg, a flashy offensive show or a defensive battle) without the need to choose the real winner.
In the UK, this bet is sometimes called a spread bet, but rather than a simple win/lose, the bet pays more or less depending on how far from the final result spreads.
Example: In a football game, the dealer believes that 12 or 13 corner kicks will occur, so the spread is set at 12-13.
- A gambler believes that there will be more than 13 corners, and "buys" on Ã, Â £ 25 points at 13.
- If the angle count is 16, the gambler wins (16-13) = 3 x Ã, Â £ 25.
- If the number of angles is 10, gamblers lose (13-10) = 3 x Ã, Â £ 25.
- A "sell" transaction is similar except that it is made against the value below of the spread.
- Often "direct prices" change the spread during an event, increasing profits or minimizing losses.
In North America many sports bets from this bet will be classified as over-under (or, more commonly today, total ) bets than spread bets. However, this is only for one side or only total, and does not increase the amount won or lost as the actual movement of the betting maker's prediction. In contrast, over-under or total bets are handled as betting on point-spread on the team, with the usual 10/11 (4.55%) commission applied. Many Nevada sports books allow this bet in parlays, just like betting on team spread points. It is possible to bet, for example, team A and more than , and get paid if both team A "includes" spread points and a total score higher than the book's prediction. (Usually, the pay half with 13: 5 odds without commission fees, just like the standard two team parlay.)
Math betting spread
The mathematical analysis of spread and spread betting is a large and growing subject. For example, sports that have a simple 1 point scoring system ( for example, baseball, hockey, and soccer) can be analyzed using Poisson and Skellam statistics.
Financial spread bet
By far the largest share of the official UK market has to do with financial instruments; Leading spread-betting companies get most of their income from financial markets, their sporting operations become less significant. Financial spread spreads in the UK are very similar to futures and options markets, the main difference being
- "bills" occur through a wider bid bid spread;
- spread bets have different tax regimes compared to stock exchange and futures (see below);
- More flexible spread spread bets, not limited to exchange hours or definitions, can make new instruments relatively easy (eg individual stock futures), and may have guaranteed stop loss (see below); and
- trading is off-exchange, with an existing contract directly between the market maker and the client, rather than the exchange-cleared, and thus subject to a lower regulatory level.
Financial spread bets are a way to speculate in financial markets in the same way as trading a number of derivatives. In particular, the Financial Derivatives Contract for Difference (CFD) reflects spread bets in many ways. In fact, some financial derivatives trading companies offer financial spread and CFD bets in parallel using the same trading platform.
Unlike fixed-odds bets, the amount won or lost can be unlimited because there is no single bet to limit losses. However, it is usually possible to negotiate the limit with a bet:
- A stop loss or stop automatically closes the bet if the spread moves against the gambler by the specified amount.
- A stop win , limit take profit closes the bet when the spread moves benefit the gambler for a certain amount.
Spread bets have moved beyond the reach of sports and financial markets (that is, those that deal only with stocks, bonds, and derivatives), to cover various markets, such as home prices. By paying attention to external factors, such as weather and time, those who bet on point spread can be better prepared when it comes to getting profitable results. In addition, by avoiding the favorite bias-longshot, where the expected return on the bet is placed on a shorter odds beyond the bet placed on longer chances, and not betting with one's favorite team, but with a team that has proved better. when playing in certain weather conditions and time of day, the likelihood of arriving at positive results increases.
Tax treatment
In the UK and some other European countries, the benefits of the spread are tax-free. Britain and some other European tax authorities stipulate bets on financial index differences as gambling and not investing, which means free of capital gains taxes and stamp taxes, despite the fact that it is regulated as a financial product by the Financial Conduct Authority in the United Kingdom. Most merchants are also not responsible for income tax unless they rely solely on their profits from financial spread bets to support themselves. The popularity of financial spread spreads in the UK and several other European countries, compared to other speculative financial instruments trading such as CFDs and futures in part due to these tax advantages. However, this also means losses can not be matched by future earnings for tax calculations.
In contrast, in most other countries, the spread of financial spread spreads is considered taxable. For example, the Australian Tax Office issued a decision in March 2010 saying "Yes, the gain on financial difference bet is revenue that can be assessed under section 6-5 or section 15-15 of ITAA 1997". Similarly, the losses on the spread bet contract can be deducted. This has resulted in much lower interest in financial spread bets in those countries.
Example of financial spread bet
Suppose Lloyds Bank trades on the market with a 410p offer, and a 411p offer. The spread-betting company also offers 410-411p. We use certain fixed-rate cash bets, or "daily rolling bets" as the betting companies refer.
If I think the stock price will go up, I might bet Ã, Â £ 10 points ( i.e., Ã, Â £ 10 per cent moving stock) in 411p. We use the offer price because I "bought" the stock (bet on the increase). Note that my total loss (if Lloyds Bank goes to 0p) can reach Ã, £ 4110, so it's equally risky to buy 1000 shares normally.
If the bet goes overnight, the bettor is charged a financing fee (or accepts it, if the boss shortens the stock). This may be set at a certain percentage LIBOR, usually about 2-3%.
So, in the example, if Lloyds Bank is trading at 411p, then for every day I keep my open bet charged [taking the finance charge to 7%] ((411p x 10) * 7%/365) = Ã, Â £ 0.78821 (or 78.8p)
Above this, the bidder needs the amount as collateral in the spread-betting account to cover potential losses. Usually this is 5 or 10% of the total exposure you take but can go up to 100% in illiquid stocks. In this case Ã, Â £ 4110 * 0.1 or 0.05 = Ã, Â £ 411.00 or Ã, Â £ 205.50
If at the end of the bet Lloyds Bank trades at 400-401p, I must cover the difference of £ 4110 - Ã, Â £ 400 * 10 (Ã, Â £ 4000) = Ã, Â £ 110 by adding an additional deposit (or guarantee) to in the account.
Passengers usually receive all dividends and other corporate adjustments in the financial costs every night. For example, suppose Lloyds Bank goes ex-dividend with a dividend of 23.5p. Petters receive that amount. The exact amount received varies depending on the rules and policies of the betting company, and the taxes that are normally charged in the country of origin of the tax of the stock.
Terminology and acronym
- HoD
- High of day (the highest price traded on the market for the day).
- Intraday Trader
- Merchants that operate from within trading time each day.
- LoD
- Day low (the lowest price traded on the market for the day).
- London Turn
- The time when the market subtly changed direction between 12:15 and 13:15 GMT with more regularity than chance.
- Market Session
- The time of day is set largely by regional stock markets. Times vary from broker to broker, but the following are typical: Asian Sessions (22:30 to 8:45 GMT), European session (06:45 to 16:45 GMT), US session (13:00 to 21:30 GMT ).
- Spread
- The difference between the price of demand and supply, which can vary between the market and between brokers substantially.
The danger of financial spread bet
According to an article in The Times dated April 10, 2009, some 30,000 bet accounts spread in the previous year, and that the largest study of gambling in the UK on behalf of the Gambling Commission found that serious problems developed in nearly 15% of spread boss compared to 1% of other gambling. A report from Cass Business School found that only 1 in 5 gamblers end up winning. As noted in the report, this corresponds to the same ratio of successful gamblers in regular trading. Evidence from the spread betting company itself actually puts this closer to 1 in 10 traders as profitable, with the high number of clients suffering from volatility that should be one of the benefits of spread bets.
See also
Note
Further reading
- Malcolm Pryor (2007). Financial Distribution Handbook . Harriman House. ISBN: 1-897597-93-2.
- John Piper (2007). Binary Bets . Harriman House. ISBNÃ, 1-905641-23-0.
- Financial Services Authority, review March 2007, Review of Bread Spread
Source of the article : Wikipedia
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