How does spread betting work?

Spreads in sports betting, also known as lines, serve to balance the odds among two teams that are not evenly matched.

Bookmakers establish a spread in sequence to achieve the same quantity of action on both ends of a game.

Therefore, if the Colts are preferred by -3 points when playing the Texans, the spread may denote by -3 points.

If you bet on the Colts against the spread, you can only win if the Colts win by a maximum of three points.

You could lose the wager if indeed the Colts score by 2 points because they missed the crucial number of three.

‘Covering’ the point spread

Both sides’ point spreads are the same in every game or event.

The sole distinction is that a plus sign (+) indicates an underdog’s spread, while a negative sign (-) indicates the favourite’s:

Tennessee Titans +3.5 (-110)

Indianapolis Colts -3.5 (-110)

So, by betting the Titans on the spread, you’re getting 3.5 points from the start.

You can earn that wager by either the Titans winning the game against the Colts by a score of 1–3, or the Titans losing by that many points.

If you bet on Indianapolis, you are giving 3.5 points. That means that even before the game begins, you are down 3.5 points.

Therefore, the Colts must not only win the match but do so by a score of at least four points.

Tennessee would cover the 3.5-point spread in this case if the final score was Titans 21, Colts 23, or a similar outcome.

However, if the Colts win 27-21, they will cover the spread.

One of the key benefits of spread betting for kiwis is the potential for tax-free profits.

However, tax treatment depends on individual circumstances, and tax regulations can change.

Therefore, United Kingdom spread betting banks are free from UK capital gains tax (CGT) and stamp duty.

Spread betting earnings are not subject to CGT, this means you cannot deduct any losses from your taxable income (aside from CFD trading accounts).

Tax laws can vary and are based on the specifics of each case. The tax laws may vary in other countries than the UK.

There are two distinct bets: the spread and the moneyline. Before placing any bet, you should first ask yourself whom you believe will win.

You can come to the conclusion that is most suitable for you.

Check the moneyline after that. It will still be a more lucrative wager than the spread to back an underdog side to win.

You do believe they will triumph outright, given the greater odds, after all.

However, the spread offers the greatest financial potential if you believe a favourite team will prevail.

Speculation in the form of spread betting means that a trader would open a sale, or short, position if they think the market is heading lower.

Your profit or loss in such a spread-betting trading account depends on how many points the market moves in your favour or against you.

Multiply The trader’s stake size (for instance, £5 per point) by this sum to determine a financial profit or loss.

Good resources if you wish to learn more about spread betting:

https://www.ig.com/uk/spread-betting/what-is-spread-betting-how-does-it-work#information-banner-dismiss
https://www.spreadex.com/sports/get-started/sports-spread-betting/
https://en.wikipedia.org/wiki/Spread_betting