Martes, Pebrero 19, 2013

Spread Betting

It has been a major growth in the UK in recent years, with the number of gamblers heading towards one million. Can also carry a high level of risk, with potential losses or gains far in excess of the original money wagered. In the UK, Spread Betting is regulated by the Financial Service Authority rather than the Gambling Commission.

Then the  general purpose of Spread Betting is to create an active market for both sides of a binary wager , even if the outcome of an event may appear prima facie to be biased towards one side or the other.

The point spread is essentially a handicap towards the underdog. The wager becomes "Will the favorite win by more than the point spread?" The point spread can be moved to any level to create an equal number of participants on each side of the wager.

Because the spread is intended to create an equal number of wagers on either side, the implied probability is 50% for both sides of the wager. In order to profit, the bookmaker must pay one side (or both sides) less than this notional amount. In practice, spreads may be perceived as slightly favoring one side, and bookmakers will often revise their odds in order to manage their event risk.

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