Financial Spread Betting is a form of investment which does not limit an investor to a simple, fixed ‘win’ or ’lose’ scenario when speculating on the movement of markets or indices.

Instead, an investor decides whether to BUY or SELL a market ie spread betting on it to move up or down respectively.

For every point that the market moves, in the direction that the trader forecast, a profit is calculated by multiplying the stake per point and the number of points by which the market has moved.

However, if the asset had moved against the investor then a loss would be generated by multiplying the stake per point by the number of points by which the asset had moved in the wrong direction.

If we consider a simplified example this system becomes clearer.

FTSE Spread Betting Example

Financial spread betting is offered by a host of spread betting companies like FinancialSpreads.com and GFT and on a wide range of markets.

For this example, let’s assume that you have gone onto a spread betting website, such as Financial Spreads, and have seen their online quote for the FTSE 100 Index Rolling Daily Market as 5050 – 5051.

If you were to buy this index at 5051, ie bet on the FTSE 100 to go up, then, if the market moves up to 5070 – 5071 you could close you bet by selling at 5070.

If you were risking a stake of £2 per point then your profit = (5070 – 5051) x stake per point = 19 points x £2 per point = £38.

On the other hand, if you had bought the FTSE at 5051 but instead the index had decreased in value to 5040 – 5041 then you may have wanted to close your bet and limit any further losses. You could do so by selling at 5040.

So with the same risk or stake of £2 per point you loss = (5040 – 5051) x stake per point = -9 points x £2 per point = -£18.

Spread Betting Key Points

As no stock is actually exchanged, spread bets are not susceptible to stamp duty, likewise UK spread betting does not incur capital gains tax*

Spread betting usually offers a large variety of markets on which to trade such as indices, foreign exchange, commodities and equities.

Spread betting is a leveraged product. This amplifies your profits on winning trades. However, it also means that you can lose more than your initial investment.

Before you start spread betting note that it carries a high level of risk to your funds. It may not suit all investors. Only speculate with funds that you can afford to lose. Ensure you understand the risks and seek independent financial advice if and when necessary.

*Based on current UK Tax law. If you pay tax in a jurisdiction other than the UK then this may be different.



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Whether you are new to betting on horse racing or not, I hope that you’ll find this article useful as it explains three different channels for betting on horse racing. They are all quite different to each other, and there are nuances that if you’re not sure about them, could mean you don’t win as much as you should.

It will also help you to understand which way is more appropriate to the way you want to bet, because different people prefer different methods. Maybe you’re hoping to interpret a horse racing tipster more effectively or maybe you just want to understand the basics. Whichever you are, the following will give you a grounding in what to look for.

Betting on Horse Racing 101

The three different means of betting on horse racing that we are going to look at are standard or traditional betting, spread betting, and Tote betting which is more frequently referred to as betting on the Tote.

I should also mention that recently, matched betting has also risen in popularity but this is perhaps not as common as the other three and that I will cover it in a separate article.

I would advise that if in particular you’re a beginner, that you do not attempt matched betting unless you have a solid grasp of the standard forms of betting on horse racing, otherwise you are only going to get confused and potentially lose money.

Standard Betting Explained

So, the first form of betting that we’ll look at is standard betting. This is still the most popular way of betting on horse racing and the one that most people tend to use when they start out betting. In fact, it’s still the way I continue to bet today.

Simply put, when you place a standard bet, whether its a bet to win (where the horse must win the race for you to win your bet), or an each way bet (where the horse can finish in the first three or four places), the bookmaker lays out their odds for each horse and these are set in stone, that is to say they cannot be negotiated. Odds do fluctuate and change depending on how much money is being placed on the individual horses, but the prices are always determined by the bookmaker.

To place a bet in this fashion, you simply select your horse, see if the odds appeal to you and if they do, you place your bet. Once you have placed this type of bet, as a punter you know exactly what you are going to win (or lose) right from the start, and so most people are comfortable with this type of bet since you can manage your money more effectively, and this is so very important as a punter.

Why Is Spread Betting Different?

Spread betting has become more popular in horse racing in recent years, although it started out as being more popular in sports such as American football, rugby and cricket; sports where there is potentially a large flexibility in the winning margin. It is also a popular method of betting for those who trade the financial markets.

Using this type of betting for horse racing is definitely not for the beginner, nor the faint hearted, as there is generally the possibility that you do not know how much you stand to lose if you’re unfortunate enough to do so.

To explain this as concisely as possible, spread betting on horse racing is taking either the jockey index, winning distance or the distance of places between individual horses, and so involves a fair amount of guessing on the margin, known as ‘the spread’ between them.

It can be a very lucrative way to bet on horse racing, however the problem that I have with spread betting is that you’re never entirely sure exactly how much you stand to lose, and so can quickly run yourself into massive debt without realising it if you are not careful.

It is also a very technical means of betting on horse racing and as I’ve already mentioned, I do not recommend this if you are a novice. In fact I do not entertain spread betting at all I must admit, it just is not for me.

Betting On The Tote

Betting on the Tote, or Tote betting, is a relatively safe way of betting on horse racing as there are low minimum stakes and your losses are controllable.

In Tote betting, all of the monies from the bets placed on individual races are collected into what is called a ‘pool’. After the cost deduction of the bookmaker (The Tote) is deducted, the remaining amount of money is divided out amongst the total amount of winners for that particular horse.

Just like with standard betting, you know exactly how much you stand to lose if your horse does not win the race, but the Tote is also unique in that you may stand to win more than you would through the ‘traditional’ racecourse bookmakers. Depending on how big the pool is for the race and which horse wins, makes it possible to win more than you think you will.

It is also down to the fact that the Tote calculates their prices differently to the traditional bookmakers and is why the Tote is as popular a way of betting on horse racing today as its always been, particularly for the novice because you can bet with very low stakes and so it is ideal if you are just starting out.



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