blonde poker forum

OK, if you already know what you are doing, look away.  I'm just going to write this for readers that have no idea what a spread bet is, I'm not going to write anything advanced, just the basics.  All my pricing is for examples.. not actual prices ofc!

Just like fixed odds bookies, there are some generous sign-up/referral deals out there, so don't rush out and open an account.  I'm going to suggest a system where I refer people and throw 100% of any income generated from that into supporting Blonde, or Fred, or whatever else.  i.e. I won't make a penny from it, but we collectively might as well pick up the free $$ somehow.  I'm fine if someone else active in spread betting wants to do that instead of me.

What's a spread bet
A conventional fixed odds bet with Ladbrokes is one where you write out "£10 win" on a betting slip and then throw it away if it doesn't win, and collect if it does win, an amount pre-determined by the price you took, or by the price you are given, SP.  Your liability is known (£10) and your potential profit is also known.

A spread bet is one where it doesn't just matter if you are right or wrong, but by how much you are right or wrong.  So your liability is not always known at the point where you strike your bet, you have to work out "what is the worst that could possibly happen" and in some markets, "I'll have a tenner on that" could cost you several hundred, and in the blink of an eye.

How are spread bets priced
I'll give an example of a market that easily lends itself to being priced up as a spread, and one that doesn't, so the companies convert the varying possible outcomes into a numerical index so that it can be traded.

Football - time of first goal.  The firm may price that match up as 35-38 (quoted in minutes for this market)  If you think the game will be conducted within the centre circle with little chance of attacking play, you might "buy" (i.e. go higher) than their offer of 38 minutes and you choose a stake of £1 per minute.  If the game ends up 0-0 then the bet settles at 90 minutes, you were right, but more importantly, you were very right and you win (90-38) x £1 = £52.  Lovely.  Of course, they could walk a goal in from the kick off and the market would settle at 1 minute and you would lose (38-1) x £1 = £37.  Not ideal.  Most of the time, someone will score in the 28th minute or the 42nd minute and your wins and losses will be a moderate factor of your chosen stake.  But ALWAYS calculate the cost of the worst thing happening and be prepared to swallow that... because it will before too long.

Note that if you thought the game would be action packed, you would have sold the firm's bid of 35 mins, and if a goal was scored in the first minute, you'd have made £34 and if it ended up 0-0 you'd have lost £55.  The eagle-eyed will notice that every time the spread firm matches a buyer and a seller, they take £3 out the game... that is their over-round.

OJ Simpson trial.  This isn't an obvious numerical market, so they may make a market something like this:

0pts - Not Guilty
10 pts mis-trial
25pts manslaughter
50 pts murder
+10 pts for death penalty.

and then quote 26-28 on that index.  If you think he is getting off, you sell at 26 to your chosen stake, if you think  he is going to fry, you buy at 28.

Volatility
You MUST MUST MUST understand what can happen, so paper trading (writing down some trades for the first month without actually using money) is a good idea, you are going to find yourself in some scary spots if you aren't very very careful and perhaps even if you are.

If you are looking at a market where they are pricing up the number of Man City manager sackings for the course of the season, the quote might be 0.3 - 0.5.  You don't need to be glued to the internet all season, the bet is very likely to settle at 0 or 1, and if Pellegrini does get sacked, you'll get to hear about it and can decide if you need to trade out in plenty of time.  Your stake is likely to be quite a large unit, maybe a couple of hundred a point even for a modest bet.

If you are looking at a market where you are being quoted how many league minutes Aguero is going to play for the season, he could play every minute of every game and play 3420 minutes.  He could get a bad tackle 2 minutes into his next game and be out for the season.  You don't want a couple of hundred quid a point on this bet, coz not only can you be wrong, you can be wrong a couple of thousand times :)

In running or not

Most live matches are updated in running, in other words you can get an updated price quote so if you decide you were a bit wrong, you can close out the bet, by either taking an equal and opposite position, or if the firm has it, clicking on the "cash out in full" button.  This will limit your losses to some extent.  SOme matches (or other markets) are not updated in running, and you need to be comfortable with taking a position and not getting any future opportunity to get out and you have to take the full result on the chin.

stop losses / maximum makeup

Some accounts will allow you to trade with a stop loss.  For example, a bet that could settle anywhere between 0-1000, it is possible to have an account where your stop loss is maximised at 100 x your stake in a particular market.  This saves you from going down the tubes by 1000 x your stake and reduces volatility.  Note that if the market that could settle anywhere between 0-1000 was priced at 10-20, (where 0 is the worst possible outcome, I say that because you have to make sure that a negative settlement isn't a possible outcome) then you definitely wouldn't want to buy on a stop loss account, but you might very well want to sell on a stop loss account.

For other markets, perhaps NH match bets, they will suggest a maximum makeup of +/-15 lengths.  That is fair enough, as if it is a 4 mile race and yours falls at the first, and the other one crosses the line eventually... that's a lot of lengths to pay out on.  Not that for some markets, be very careful what you are staking.  IS it £10 per LENGTH or £10 per TENTH OF A LENGTH.  One bet is obv 10x bigger than the other, so make sure you understand the quote and your max liability.

overround

Flipping a coin type markets, WH might be 10/11 your choice.  You can work out their over-round.  (prolly will be 5/6 yr ch... what can I say...)
a spread firm may have a coin flip outcome on a 25 index.... 0 for "no" and 25 for "yes" priced up as 12-13.5  Obviously the tighter their spread, the less over-round they have.  If you buy the spread, you could win 11.5 or lose 13.5  if you sell the spread you could win 12 or lose 13.  You can convert that into over-round as a 'reader excercise'
Every time you trade, you have to buy their offer, or sell to their bid.  You are paying a fee effectively every time you get in or out of a market.  That's not to say there aren't some ok opportunites, but over trading will definitely kill you in the same way that standing at an fx bureau with $ and asking for £ then changing your mind and giving them £ back and asking for $ does.  (and both examples are relevant as many don't notice these "hidden" fees and the massive tax it is on your bankroll.)

That's enough to start with :)

Very good summary.

Love the spreads.

But also hate the spreads, goes to SPIN now 🙈

Good opening post.  Hopefully Tighty will tell us his Ramprakash story as well.

Very good summary Simon.

I very recently got into spread betting myself. If anyone reading is looking at dipping their toe in the water with low risk, I would suggest buying on the "player goal minutes" markets in football. Usually, a player can be bought between 1 and 20 (minutes). If you buy, let's say Aguero for £1, at 20, and he doesn't score, that's a loss of £20. However, if he were to score two goals, let's say in the 45th and 90th minute, that's a result of £135, which would be a £115 profit.

It should be noted that a player could score a hat-trick, and you could still lose money. To continue the example above, if Aguero scored in the 1st, 7th, and 11th minutes. His goal minutes would be 19, you would then lose £1.

As Simon said, you need to be careful on your bet sizes, but the player goal minutes markets do offer big potential profits for a small-to-modest risk.

It's by no means as apparent as it used to be, but the general rule of thumb was you needed to be a lot more confident in a selection to be a buyer than a seller. It's a psychological thing that people prefer to cheer stuff on rather than hope they don't happen, so the value is more often in the unders as the firms adjust their spread up knowing they'll get buyers even at poor prices.

Great work, Simon, thank you.

Can you tell me how such accounts need to be funded?

Do we need to deposit a meaty sum to be able to trade sensibly, or just show proof of bank liquidity?

If we were betting to the sizes that Fred currently does, what sort of sum would we need to deposit?

How & when is "settlement" of the Account (not an individual bet, just the account).

I know there's no direct correlation, but in Fred, we sort of assume a max bet of around £300, except in exceptional circumstances. How would we come up with what amounts to the same thing, given that in some cases, the Spread might have a far greater potential loss. In a fixed odds bet of £300, our liability is known - exactly £300 - but in Spreads, there is a far greater potential liability.

Presumably, we can close our positions (buy/sell the opposite of our original position) Online? I used to have to phone them up. I don't like ringing people these days, as they sometimes answer. 

My only knowledge of Spreads is about 10 or 15 years out of date, so excuse my hignorance.

opening an account

The old days, a little bit of KYC to go through and you could have a credit account with weekly settlement either direction.  Now you are far more unlikely to be offered a credit account and instead must put up margin to cover the bet liability.  So if a bet can swing 100 pts and you want to bet a £1 of it, you will have to have a balance of £100+ to place the bet.  Likewise with fixed odds season bets, this can gunk up your account.  If Fred wan't any season-long spread action, it would need to be with someone with a functioning credit account.

buyer or seller

What Jamie ^^ said may be true, but what I think is even more relevant is knowing your maximum liability.  For example, a football match where you can bet on the total shirt numbers of scorers.  The quote might be 42-45.  Buyers paying 45 immediately know thier maximum liability, as the worst possible result is 0-0 and they are sunk 45 pts.  Sellers selling at 42 get the opposite.  Their best possible result is 42pts, their worst possible result runs into several hundred, particularly when you have guys running around the pitch with 58 on their shirt.  Don't ever say in markets like that "he can't get a hatrick from midfield" .... at some point those 7-4 games do go in and it is very very painful if you get caught with your pants down.  I haven't worked for a spread firm, but I;d imagine on that quote of 42-45, the majority of punters will be buyers, for this reason.  Knowing this in advance, the firm may decide that true value is 42, but skew their quote to "fair bid, expensive offer" knowing that people will pay up.

arbing

I guess somone else on here might have something to chip in on this :)  In the very old days, for example cricket opening runs, with several companies in the industry, arns were regularly open.  One firm might open 340-360 whilst another firm opens 370-390.  Hopefully even first timers here will quickly work out how to take 10 risk-free points out of the game here.  Naturally, those arbs didn't stay open too long and often firms would limit your stake when they knew there was an overlap and/or mark your account up as an arber.  There are more complicated arbs, probably beyond the scope of this, but just to get your minds whirring a bit... Let's say firm 1 goes 350-370 and firm 2 goes 370-390.  Well obviously if you are selling, you are selling to firm 2 and if you are buying, you are buying from firm 1 and there doesn't look to be an arb there.  But there could well be!  If firm 1 has no stop loss, but firm 2 has a 200 run stop loss, you do have an arb.  In trading parlance, you can buy the 570 call options for free.  How you do this is you buy at 370 from firm 1 and you sell at 370 (with a stop loss) with firm 2.  Most results will see you break perfectly even ofc, and your hassle is to move money around.  However, on the rare occasion where the team plunders 570 runs, notice that you are stopped out of your sell position with firm 2, but still running your long position "for free" with firm 1.  So you will make 1x your unit stake for each run > 570.  Nice when it happens... it doesn't happen a whole lot.  You want a very volatile market and as small as possible stop loss.  And 2 accounts, funnily enough.

This is true.  Also aside from people wanting to cheer, it's only a few hardy souls who want to sell something like total goal minutes in a match.  If you buy at 140 then you know your downside if it's 0-0, but people don't fancy selling and watching a 4-4 unfold!  I reckon total goal mins are always too high in the quotes.

It's not so much a problem when markets trade in running, but if you sell in a non premier league match then strap your seatbelt because you're in for the duration.

"More drama at Portman Road - what's happened now Kammy?"  <seller cries>

An old flaw they used to have many years ago was that they increased test batsmen runs in a straight line - i.e. your guy gets a 4, his quote goes up 4 runs.  This didn't account for players getting "settled" at the crease so a winning strategy (small sample size) was to sell then close out if batsman got to 15.  If you notice now though, I think the quote starts lower and goes up in a steeper curve when the player gets to 10-15 and then goes up linearly after that to account for getting your eye in.

Thanks Simon.

So, for Fred purposes.....

1) We could deposit a reasonably modest account for short term bets  - individual games or events which take place in the near term.

2) For potentially volatile long-term stuff - "Season" football bets, Ashes Series, future Elections, that sort of thing, it would not really work for us, as we'd tie up so much of our Bankroll for too long. 

Have I got that right?

How many spread firms are there these days, is it just Sporting Index?

I don't think the stop loss gives you a risk free arb.  It is a long time since I had a spread account, so this is from memory.  You have and sell at 370 with a stop loss at 570, England are motoring along at 400-4.  The quote can then move above 570 triggering the stop loss on the sell.  England then completely collapse and the final total is 450.  Hence you lose 120 x your stake.

For (2) you're probably best off using my account as I've got an old style account with credit facility.  For example the 3 long term football trades we have at the moment we can just settle either way at the end of the season with no need for margin.    I think a couple of the other guys on TFT have these as well.

For (1) you should open your own account and stick £500 in for short term stuff.  You also get a free bet I think (Peter said it was £100 risk free trading for a week).

For sports I'd only recommend Sporting Index and Spreadex because they are regulated by the FCA and you are protected by Client Money Rules (i.e. if they go bust your money is segregated).

There are many other firms out there outside the UK, but I've heard some horror stories.

Yeah - think you are right.

1) Yes, I think we'll likely go that route, but I'll speak to Tighty first. Simon Galloway offered us some referral incentive, as I recall, so when we do, I'll speak to him.


2) Thank you very much, that's very kind, & most useful.

 

Actually thinking about this it depends how the stop loss works.  I've never used them but do you actually get unwound during the event and left with no position, or do they settle everything and then your losses are capped at £200?  If it's the latter then the strategy works.

It doesn't trigger your stop loss as soon as the market goes 570 bid. It's been a while... But pretty sure it is just done on settlement. If you think about it, it is not like a general market where no-one knows where all the stops are. Sporting know where your stop is and while they probably wouldn't, there would be a shady opportunity to bid up their price where they could to stop you out.

Otoh, if you are buying runs on a stop as a straight bet, you definitely should close out as soon as it goes 570 bid as that is the max you can make, no need to risk a batting collapse thereafter

We have an edge in spread betting?  It is not entirely obvious to me.

Too early to say due to sample size but Fred's 5 early trades all look decent.  Especially the Force India and Mercedes trades.  If it's used sparingly then I think it can be a useful tool for TFT to take views that are hard to capture with fixed odds (eg anti mercedes/pro Watford).  Ths issue will be the temptation to over use it on daily stuff and you get chomped up by bid/offer.

We don't have an edge in spread betting, but it is another string to our bow.

Fred can't get on in many spots, so if nothing else, it's definitely a way to get on.

Next up, spreads can often be compared to fixed odds. For example, on a 50 index, something priced 3-5, buying it can be converted to 9/1 ftw, and some 16/5 and 5/5 for places, assuming 50-25-10-0. Most of the time, the width of the spread means this will never be best price, but once in a while, you get a market perhaps with 2 events to go where the spread price for the next event is more or less best price, plus you get a free event to follow where you might bink a freebie. They don't happen often and they don't stay open for long, tbf

I was not suggesting that, I was addressing 2 matters.

1) I'd like to learn about it, generally, just as Fred had to learn so many things at the outset.

2) We have been using the accounts & kind hospitality of Dung, & Joe Beevers, & I feel a bit as if we are taking liberties in assuming that can continue. If they don't mind continuing "as is", I'm fine with that.


A handful of decent spots were suggested, some of which looked OK, I was just thinking out loud really. Old dogs, new tricks & all that. I'm as far removed from "Insane Hedge" thinking as anyone could be.....

Doobs I was always of the opionion that SPIN and Betfair were kind of similar in that you looked to them for the "correct" price.

But as has been seen this year Peter has found some great spot's, some have been thrown up on the football as well. I do think the margin's in which you can beat them in wont be as great as other market's but 2/3% here and there always helps.

I also think that its a high risk low reward kind of place but with the strict Bankroll management that TFT and others try and follow that should not be an issue also.

After all, they cannot be right ALL the time can they?!

Peter is clearly getting his sizing all wrong, I don't think Simon knows how the stops work and Tikay has previous.  I think it is much harder to spot value as you need to know more about the underlying distribution. Plus it is much easier to do your nuts spreadbetting and I have been there. 

Amen to that.

This is almost like fancying a cigarette after quitting for 5 years.

I have a stop loss account. I've never been stopped out. I have had bets settled as a stop. Whilst I don't bet the free call options with stops, I know someone who does. I've stood on an open outcry futures trading floor for many years and am not unfamiliar with stops, or watching them get triggered, or watching people trying to probe the market to trigger other people's stops.

If you had a short position at 370, when the quote was 565-585, it would be pretty easy for them to just go 570 bid , stop you out without taking any action and then go 565 bid again.

If you can point me to some evidence that it is wrong, that would be great. Regardless, it isn't going to matter too much for anyone unfamiliar with spreads...they still have some greenhorn pain to go through, such as flip-flopping favs in supremacy markets.

Think Simon might be right Doobs:

"Stop Loss limits your exposure to losses (but also to profits because it acts identically as a Stop Win) by automatically applying a maximum level to the trades at the time the bet is struck. Effectively we are placing a pre-set limit on any profit or losses that may arise from any given bet."

I read "pre-set limit" that as you put a bet on and then when the event is complete your losses are capped both ways?  (i.e. no mid event close out)

I've never used stop losses though so just my reading of the rules.

A stop loss will automatically close the bet if the spread moves against the gambler by a specified amount.  (C)Wikipedia

Stop losses are just pissing away equity anyway (c) Doobs

They aren't automatic on bets, you have to set them unless the world has changed since I was involved.

They are automatic on bets when you have a stop-loss spread account. At the time of placing a bet, the stop-loss/win is preset

Don't want this turning into a stop loss thread when it is meant to be a spreads-for-beginners thread. Stop losses don't have to give any equity away at all. As per previous in this thread, you can use a different account when it suits to get unlimited upside with a known and manageable downside. Using a stop-loss account where that doesn't change your upside, but does limit your downside, isn't a bad thing.

And the stop less is still triggered by the spread moving above it?  So you don't have a risk free arb.  

Of course you can get a stop win too, but then you get no profit.  

This all feels really messy.  We can have normal accounts, stop loss accounts, guaranteed stop loss accounts and we have a bunch of newbies not having a clue what they are doing reccing bets.

No, the stop loss is not triggered , think of it as and adjustment to the settlement. If Aus are 150-2 and going strong, your sell@ 370 won't get stopped out because the quote is 580-600.

Tony asked for a dummies guide, and that's what I've put up. Will people make mistakes? Yes. Will most people lose long term? Yes.

I think for the purposes of the thread, we should assume that accounts with no stop losses are in operation at all times.  I read the SPIN rules on this as per Simon's understanding (as in it doesn't work like financial stop outs and is a post event makeup adjustment).  But anyway probably best for illustration to just consider normal vanilla accounts. 

I'll be at Twickenham tomorrow. How best to smash up my Sporting Index account for max degen excitement? ;)

Anybody got any fancies for the rugby world cup spreads?