Fixed Odds Betting
The type of betting known as `fixed odds` is the most common and offers a simple `win or lose` scenario. Here, you place a bet on a certain outcome and if you are successful, you win whatever the odds quoted to you at the time of placing your bet. If you are unsuccessful, you lose only your stake invested.
One of the most common ways to express fixed odds is as a fraction, where the numerator is the amount to be won and the denominator the stake wagered. For example, if you place a £10 bet on a horse to win at 5/1, you know you will win £60 if your horse comes in - a £50 profit plus your original £10 stake back - or you will lose £10 should your horse not win the race.
The fraction indicates the likelihood of that particular bet happening. Odds of 100/1 suggest the outcome will only happen once every 101 times, whereas odds of 2/1 suggest the outcome will happen once every three times.
Odds shorten when the chances of winning improve. For instance, on the morning of a race a horse may be listed at 4/1 but it could be backed in to 3/1 or 9/4 if a lot of people decided to back the horse to win.
`Evens` means there is a 50/50 chance of that bet winning. When the odds are shorter than evens, they will be listed as 4/6, 2/5, etc. They can be referred to as "5/2 on" as the horse is odds-on to win. So for a £100 stake at 1/4, you get £125 back if you win. In the case of horse racing, if you take a fixed odds price on the day of the race there may be a Rule 4 deduction in the event of a horse subsequently becoming a non-runner.
Decimal odds
Another system used to express fixed odds is called `decimal odds`, widely used across Europe. The decimal odds indicated by the bookmaker is the total amount that will be returned to the owner of a winning bet - the payout includes the original stake. So the decimal odds are equivalent to the fractional odds plus one. For example, a £100 bet at decimal odds of 4 would pay out £400 (the equivalent of 3/1).
Evens is recorded as decimal odds of 2. Therefore for fractional odds below evens, the decimal equivalent would be between 1.01 and 2. For instance, 4/6 would be 1.66.
Spread betting
With spread betting, it can be argued that you can make better use of your sporting knowledge than with fixed odds. With fixed odds, you know precisely how much you are going to win or lose from the moment you strike your bet. In contrast, with spread betting your winnings are determined by how accurate you are. There are more than just the two win/lose scenarios and profits can end up being many multiples of your stake should the bet be successful. However, there is always the chance you will lose more than your original stake size should the bet not go your way.
For example, if you were to place a £50 spread bet on a favourite to win a football match, buying at 2 on a spread of 1.8 - 2, then you would return a profit of £50 for every goal above the spread. So if the favourite won the game 4-0, you would make £100 ((4-2) x £50 stake).
However, you may end up losing more than your initial £50 stake if the match was a draw ((0-2) x £50 stake resulting in a £100 loss) or if the opposition grabbed a surprise victory by a goal ((-1-2) x £50 stake resulting in a £150 loss).
