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Getting To Grips With Spread Betting


 

Getting to grips with spread betting by David Renham

 

I have spent years avoiding spread betting as it looks extremely volatile. However, having read Dave Nevison’s excellent book “A Bloody Good Winner” I thought I would at least do some paper trading to see if it was worth pursuing with real money. One advantage of spread betting is that there are numerous markets to choose from – this gives horse racing punters far more scope than even the backing and laying scenario on the exchanges. 

 

Here is an example of one of the markets you can play – the description is adapted slightly from the Spreadex website. Please accept my apologies if you are an experienced spread bettor, but the following explanation will be helpful for the majority.

 

Racing Post Favourites: Predict the combined total of points scored by the Racing Post favourites (horses listed as favourites in each race by the Racing Post) at a particular meeting. We award points using the following criteria: Winner (25 points); Second (10); Third (5).    

         

Example:      

         

Sandown Racing Post favourites (7) 64 - 68                 

         

This quote says that the combined points total, using the above criteria, for the Racing Post favourites at the meeting will be between 64 – 68.   

         

If you think the combined total will be more than 68, you go higher (buy).      

         

If you think the combined total will be less than 64, you go lower (sell).

         

Let us assume the following: no Racing Post favourites win, while three finish second, two finish third and the rest are unplaced.   The market therefore settles at 40. (0x25) + (3x10) + (2x5).      

         

If you had bought at 68, you would lose your stake multiplied by 28 (68 - 40) 

         

If you had sold at 64, you would win your stake multiplied by 24 (64 - 40)

 

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As I have done a lot of research into Racing Post favourites over the years, I felt this may be a market to explore further.

 

Tuesday 3rd Feb had just one meeting at Southwell and the quotes for Racing Post favourites were as follows:

 

Spreadex 82-86

Sporting Index 84-88

 

I decided to use my databases to produce an ‘average score over 100 races’ the favourites would accrue race by race. I based the calculations on 100 races as I felt this was a decent enough sample. I won’t bore you with the details of how I made the calculations but suffice to say they should have been reasonably accurate:

 

Race

Average points return for fav over 100 races

1

12.5

2

10

3

6.1

4

7.4

5

11

6

10

7

8.8

8

16.3

 

Adding up my eight average scores gave me a total of 82.1. To calculate the eight race total took me only around 5 minutes and it was interesting to note that my figure was similar to those quoted by the spread firms. As you can see from the table, races 1 and 8 looked the races most likely where the forecast favourite would perform well in, while race 3 looked the least likely.

 

The best betting option based on these initial calculations seemed to be SELL at 84 with Sporting Index – however, the margin looked tight so I then wanted to look at each race individually to see if I agreed with my “scores”.

 

Race 1 – amateur handicap with the forecast favourite trading around 6/4. The horse had not run at Southwell and look vulnerable to me. At 12.5 as my points average I felt that on balance this was on the high side so all in all this was a weakish favourite. Hence, as I was erring on the side of SELLING this was a posivite.

 

Race 2 – the forecast favourite was a non runner so Sporting Index assign 10 points when this happens. As it turns out my points average for the race was 10.

 

Race 3 – the forecast favourite was trading around the 4/1 mark and there were four horses all less than 5/1. This was a lowest scoring favourite on my figures (6.1) and the shape of the race confirmed that the forecast favourite was up against it.

 

Race 4 – the forecast favourite was 3rd favourite around 4/1 in this seller. Again this looked a race to oppose the favourite. My 7.4 points total looked about right.

 

Race 5 – the forecast favourite was IMO one of the two most likely winning favourites on the card. Around 6/4 in a weak looking maiden, the horse had very solid speed figures and it was unlikely anything was going to improve out of recognition. My average points score of 11 looked a little low for comfort.

 

Race 6 – only six runners and quite an open handicap. Forecast favourite looks to hold decent enough claims, but have enough good horses to make me think we can get it beat.

 

Race 7 – favourite looks beatable in this race as well. It actually came up as a selection for one of my value laying systems.

 

Race 8 – odds on favourite in the last looks the most likely winner in terms of price and certainly looks like going very well. However, all the runners have decent speed figures in comparison which gives me some hope.

 

All in all I decided to ‘PLAY’ albeit theoretically with paper money.

 

The results -  Let us work on the theory of £1 per point.

 

Race 1 – the forecast favourite ended 11/8 but was well held in third. That was a good start and it was pleasing that he had been a weak favourite.

 

Race 2 – was a 10pt race due to the non runner.

 

Race 3 – again the forecast favourite finished 3rd so we were looking at 20 points after 3 races. My average score at this point should have been 28.6 so things were looking good.

 

Race 4 – forecast favourite finished 2nd which was an ok result. Better than winning but meant the index had clawed back some points on me.

 

Race 5 – this favourite had been backed into around Evens thanks partly to a non runner, but fortunately he finished 2nd so one of the more solid favourites had got turned over. Although no favourites had won they had scored in every race. The new quote was 75-77 so at this point I still looked more likely to “win” than ”lose”.

 

Race 6 – again a second for the forecast favourite. So worst case scenario was now a total of 100 points.

 

Race 7 – several non runners saw the forecast favourite start at 15/8 but it still proved a weak favourite finishing third.

 

Race 8 – the best looking forecast favourite won easily leaving the total points on 80. Hence I would have made a £4 profit.

 

OK – not a fortune (especially as it was paper money), but a positive first experience. I am currently looking at other markets and will be interested in comments from readers that dabble in spread betting. Anything to say about spread betting please feel free to contact me.

 

  

 

 

                  

 

 

         

 








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