Spread Betting

   A form of betting that depends on the establishment of a spread, or a buying and selling price, for a particular market or instrument at a certain time. For example, a bookmaker may offer a spread for next week of 120 to 130 on a market index which is now standing at 125. A bullish punter would buy the spread, or accept the offer price of 130, placing an up bet that the market will rise above 130. He would gain additional winnings for every point rise above that level. A bearish punter would sell the spread, or accept the bid price of 120, placing a down bet that the market will fall below 120. He would gain extra profits for every further point fall below that level. Bets can be closed out at any time by making a matching but contrary trade at the current spread. Prices for spread bets are usually set in line with the underlying market, but the advantage to the punter is that there are no commissions or trading taxes to pay, and often no taxes on capital gains. Spread betting also allows highly speculative small investments. The bets are highly geared. Spread betting is offered on sporting events and on almost every underlying financial instrument and market. ► See also Bid, Offer, Spread.

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spread betting UK US noun [U]

► FINANCE, STOCK MARKET the activity of risking money on the price changes of shares, without buying the shares themselves: »

There is no doubt that spread betting is a more expensive way to play the market than dealing through a broker.

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The financial spread betting market is booming.

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a spread betting company/firm/group

► FINANCE a form of gambling in which you try to win money by saying what the result of events such as sports games will be: »

With spread betting, the more right you are, the more you can win. But if you are wrong, you can lose more than your stake.