Punters are often caught out as the eventual total often fails to match where the spread was pushed out to

There’s no doubt spread betting has now become an integral part of any serious punter’s armoury. That said, it’s debatable whether it has yet to become truly ‘mainstream’. And more is the pity, because it’s fun, fast, and – even more importantly – can be extremely profitable if approached in the correct way.

Sporting Index are without question the market leader when it comes to sports spread betting, boasting a 70% market share on football alone. But the huge range of other markets shouldn’t be ignored because, with a bit of hard work, astute punters can easily sniff out some profitable opportunities.

Know your enemy

I’ve arranged to see how the guys at Sporting go about an afternoon’s trading on the gee-gees. Surely watching some of the firm’s top spreads compilers practise their horse-racing trading skills will be the perfect chance to pick up some hints that might prove of assistance to those in the opposite trenches - namely us punters.

It takes these dealers years to master the dark arts of odds compiling for a particular sport, so, given that I only have a few hours at Sporting, for the purpose of this article I’ve decided to concentrate on a handful of the most popular markets – the favourites index, match bets and distances. (You’ll find an explanation on the mechanics of these markets in the box on the right of this page.)

Which is how one sunny afternoon I find myself far behind enemy lines, armed only with my notebook and pen, sitting in the middle of the impressively large Sporting Index trading floor. Matt and Guy (seems half of the punting world wants to remain anonymous these days – Ed) turn out to be a friendly foe who’re only too happy to explain what goes into creating the opening spreads for the day. It’s an enlightening process – not least because it soon becomes apparent that the sources used by compilers, initially at least, will be familiar to many punters…

Looking at the favourite’s index onscreen, Guy explains how, after clocking in at around 8am, his first job of the day is usually to go through the Racing Post and obtain an initial feel for the chances of the three or four horses forecast to be at the head of the market for each race. Because every winning favourite is worth 25 points on the index, Guy will be provisionally looking to see how many points he thinks the market leaders are each worth.

All quiet on the Sporting front

If he’s faced with a weak-looking, seven-runner maiden race where the jolly is expected to be 6/4, he might well mark that down for the full 25 points. A horse that’s forecast to be 6/1 favourite in a 15-runner handicap may, on the other hand, only be pencilled in for eight points. Once he’s done his sums, Guy then looks to his Betfair screens for assistance.

Love ’em or hate ’em, there’s no doubting the influence the exchanges have had on punting in the UK. Although their influence has been greatest in the fixed-odds market, the spread betting dealers also use Betfair as an indication of where the money is going. There’s no disgrace in doing so either. After all, the exchange markets are now a free and almost always totally reliable replacement for the ‘tissue prices’ which bookies and spread dealers alike used to pay for.

So, after taking a careful look at where the money is going, Guy firms up his spread prices for the favourites index before putting it up for the punters to shoot at. Outside of the big racing festivals, the first couple of hours each day are quiet – and it’s no different the day I’m here. But then the bets start to come in and, if need be, Guy adjusts his quotes accordingly.

Time on their hands

Sporting Index take bets over the internet, on the telephone, and via their recently installed mobile phone software (you can check it out on www.sportingindex.com). All of the company’s computer trading software is written in-house using .NET technology, whatever that might be – the important thing is that it gives all the dealers instant access to their positions on each market, the firm’s position overall, and, of course, how each individual punter is faring.

Which is all fine and well, but it doesn’t answer the question foremost on your lips right now – does Guy’s method of operation allow punters to find a chink in Sporting’s armour? Well, it does and it doesn’t. In the end, to beat the Sporting Index dealers punters need to use broadly the same methods to form their own prices.

Only it’s not that simple. Most of us will find that we can do exactly the same as Guy does every day – pore over the Racing Post to evaluate market leaders’ chances, log on to Betfair to see where the money’s going, and react to any changes Guy makes to his spreads once the action hots up – and still end up beaten up by Sporting’s finest a minimum five days out of seven. So, why?

According to Guy and Matt’s theory, all but the most serious punters simply don’t have the time to work out the prices in the way they do. For example, while I’m at Sporting I see for myself how it takes Guy two hours just to prepare a favourites index. How many punters spend the same amount of time every day researching a bet? Sure, you could create your own spread using much the same methods and, if it’s higher or lower than Guy’s, betting accordingly, but most punters don’t bet that way, which is where the experts make their money.

How different is the story for the other markets? Well, Guy’s work on the distances is less of a solo effort. Although he still figures out a spread based upon the competitiveness of the racing, he then compares notes with other dealers and more of a common view is arrived at. This collaborative effort is Sporting’s response to plug a chink in its armour – successfully, unfortunately for us. Until around 18 months ago it was far from uncommon for the dealers to overestimate winning distances, especially on National Hunt racing. As a result, a number of regular spread players did very nicely. But now the spreads are set lower and the edge that the shrewdies had has mostly disappeared.

Something interesting about this market does emerge, though. Regular InsideEdge readers will be familiar with the view that punters tend to over-react on the spreads and so value often lies in opposing the majority view. The rule also seems to apply when it comes to distances. Should it suddenly start to sheet with rain at Leicester (the racing meet we’re watching), will Guy and Matt adjust the distances spread upwards to reflect how, if the going changes for the worse, the winning margins could possibly become extended? They both confirm that they will.

They explain how, when the going suddenly changes to softer, especially in the wake of heavy rain, they usually push the distances spread right up in anticipation of a lot of their punters trying to make money with a buy. They then keep a careful eye on the weather, the new spread, and what their punters are doing in case they need to adjust downwards again.

However, this is where punters are often caught out because the eventual total of the winning distances frequently fails to match where the spread was pushed out to. You’d think that would mean some nice profits for anyone prepared to sell at the new spread, but the amount of sellers compared to buyers is always small no matter what the market. This is because punters tend to dislike the generally more open-ended nature of selling compared to that of buying.

Brave betting

So, the message here for aspiring spread players seems pretty clear: if the going changes and the spread on winning distances shoots up, don’t be afraid to come out of the trench with a sell. Okay, chances are there won’t be many others with you, but you’ll be increasing your chances of making money simply through taking the minority view.

When playing distances, though, there is one final point to note. As with all their markets, what the dealers want is the final total to be a figure inside their spread. For example, if they have quoted 8-9, they keep their fingers crossed that the make-up will be 8.5 or thereabouts. In that way they win the most cash. This explains why I see nearly all the horse-racing dealers continually calling ‘Not too far!’ or ‘Photo! Photo!’ as the horses come to the finish of each contest. Any race which has a fairly close finish generally suits the dealers best.

Match me if you can

When it comes to the match-bets market, the dealers are looking for two horses that they believe have a good chance of finishing close to one another – the smaller the distance, the greater Sporting’s profits is the general rule. To which end Guy never goes for horses sporting blinkers, a visor, or wearing a tongue strap for the first time in case they react badly to their extra gear and run a stinker, finishing well behind their matched-up opponent. All the dealers should be wise to this kind of thing, but it’s still worthwhile keeping a close eye on each day’s match-bets just in case a horse has been included that is sporting such headgear for the first time.

Be wise, specialise

Guy and Matt offer up some general tips for spread bettors – the very worst thing punters can do is chase their losses, closely followed by playing on very low-level horse racing, in part because there’s less reliable information upon which to make a sound betting judgement. But their final point is perhaps he most interesting of all.

Spread betting dealers have to work a number of markets, and Sporting’s re no different. This, in urn, can occasionally ive astute punters an dge because a busy ealer can easily verlook something in he heat of the battle. But only punters truly clued into a market can spot such errors, so the best advice would be to concentrate closely upon just one or two markets. Such opportunities don’t happen all the time, but all it takes is one chink in the dealers’ armour to make a killing.

My time at Sporting is almost up. I can’t depart without asking one final thing, though. Throughout the time I’ve been watching the dealing room in action I’ve found it hard not to notice how many times bets were referred for authorisation before either being accepted or, in some cases, knocked back.

Tail wagging the dog

Why, I ask, are so many bets queried first? The answer is simple: Sporting Index’s software allows the accounts of ‘hot’ punters to be flagged. Hot punters, I’m told, are those who are on a significant winning streak, or who are simply known in the industry to be shrewd judges. Indeed, when it comes to shrewd judges, Matt and Guy both openly admit that all dealers sometimes allow themselves to be guided on a spread if a ‘face’ makes a significant bet.

So what have I learned? Mostly that there are no holes big enough to drive a truck through, but then that’s exactly the point – Sporting would’ve gone under long ago if I’d found glaring opportunities within a couple of hours. I didn’t find out anything that might be thought of as truly classified – much of the dealers’ activity is based upon formulas and paying close attention to what the shrewd punters are doing. For the punter, there simply are no guaranteed get-rich-quick systems for the spreads or any kind of betting – as all seasoned bettors know already – but sometimes, just sometimes, you can get one over on the pros by doing your homework.