Spread Betting

There are two major connotations for spread betting.

One applies generally to the gambling world. If you go to a Vegas sportsbook, you will find two ways to bet on the outcome of a game. First, you've got the money line. In that version, you pick a winner. Packers or Lions. Warriors or Rockets. You then get odds based on who is perceived the better team.

The second version is spread betting. In that setup, the odds are equal on both sides. Either side represents a 50/50 bet (usually...and not counting the casino's vig). However, one side will be awarded points. So...you might get Lions +4...meaning that, as far as the bet goes, the Lions get four free points over the Packers. If the Packers win 23-20, you still win your bet. The final score, as it applies to you, was 24-23 in favor of the Lions, since the casino spotted you those points to even the odds. The Packers, then, have to "beat the spread," i.e. win by more than the 4 points given.

That betting system represents the main general use of the term "spread betting." There's also a connotation within the financial world. This application involves betting within the spread between the bid and ask for a particular security. It's like a mix between a casino bet and a Wall Street one. You're not investing in a company or taking a position on a particular economic outcome. Instead, you're making an extremely short-term speculative wager.

This form of spread betting is a little like going down to the airport and betting on which suitcase will come out of the baggage claim carousel first.