For serious financial spread bettors the markets rarely pose opportunity for what would traditionally be considered ‘fun’. While the thrills and spills of the markets can be exhilarating, it is seldom a relaxed environment in which to spend your time, and the intense research and knowledge burden that goes with each transaction often makes it a labour of love. But the highly flexible instrument spread betting is, it can also be applied to other contexts, including most notable sports and politics. While the fundamentals of trading are the same, the basis changes, presenting traders and sports fans with a fun alternative to getting to grips with the financial markets and the often-complex challenges they pose.
Spread betting on sporting outcomes takes the same structure as spread betting on the financial markets. Prices are quoted on the buy and sell side, pinned to certain outcomes – for example, how many strokes under par a golfer will be at the end of his round, or how many goals will be scored in a football match. The outcomes are quoted with a spread in the middle, and the actual outcome is compared to the bet to calculate the difference (which is then multiplied by the original stake to calculate the profit or loss applicable).
As a means of enjoying spread betting in a less intense, less involved market, spreading on sporting outcomes can deliver returns at the same proportionate rates as financial spread betting, and can still be made to turn a profit. It is of course not without its limitations, and for anyone considering sporting spread betting as an alternative means of trading their capital for profit, the risk analysis simply doesn’t add up to make it financially viable.
The Trouble With Spread Betting Sport
When the line stops with sports spread betting is at entertainment. This is gambling, and as any successful spread bettor will tell you, is not for serious traders looking to invest and generate returns in a measured, calculated way. The trouble with betting on sport is that nothing is predictable, and there are too many unpredictable, incalculable variables that make any forecast nothing more than uninformed speculation.
Firstly, any sporting spread bet usually relies on the performance of an individual or a group of humans you’ve never met and may never know. To stake money as an investment against someone else’s actions (relative to those they are competing against) presents too much theoretical risk for most serious investors to contain.
Unlike markets, people can’t be read to determine their future performance. Today’s world-beating rugby team can win tomorrow’s wooden spoon, and there’s never any guarantee of an outcome. The strongest and best don’t always win, and the elements of chance involved in most sports are too vast to be factored into a risk analysis. While spread betting on sport can be great fun, and might even win you a few pounds here and there, there really is no comparison with financial spread betting when it comes to investment feasibility and long term sustainability.