Later we will look at the different sports and the markets offered by the various firms and how stats are used to produce the prices. But whatever your poison, when it comes to spread betting, there are basic points to bear in mind. The typical market trader has several advantages over the client. The first is an outstanding knowledge of mathematics.
Increasingly, traders are graduates who have a background in mathematics, economics or probability. For example, many people will look at a Manchester United versus Newcastle match and say unscientifically—let’s buy total goals scored; it’s bound to be more than three. A market trader will be able to put into percentage terms what the odds really are and know that there is a pretty decent chance that two, one or even no goals are scored.
The traders also supplement their income by trading themselves and for the most part they are very successful. Although they are not allowed to trade with the firm they work for, most either have accounts with the other firms or have set up accounts in friends’ names to allow them to get a bet on. Their skill is not so much from inside information on a sport or a sudden flash of inspiration, but a precise understanding of the odds and when a quoted price is wrong.