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Fixed-odds: A bet for every movement

Created:
1 April 2008
Updated:
19 November 2008
Written by:
Dominic Picarda

Up a lot. Down a little. Up a little, then down a lot. Barely budging. These are just a few of the possible price movements that you can profit from with fixed-odds financial betting. This means there's always a way to make money in the markets, not just if they’re trending up or down strongly.

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To the newcomer, this array of bets can seem bewildering. But there's no need to become an expert in every variety of bet overnight – or indeed ever. As you find your feet as a fixed-odds bettor, you'll figure out which ones are best suited to your trading style.

It's important to remember that you can practise all the bets available on a simulator with the leading companies. This is a great way to get comfortable with the principles behind each one, but without risking a penny of your own money. Start with the basic ones, such as the 'one touch' bet and work your way from there.

So, here, we profile the bets offered by BetOnMarkets. However, this guide should serve you whichever fixed-odds bookie you use, as several of the bets are generic, although they go by slightly different names from company to company.

One Touch Bet

Concept: price to hit a certain level at least once within a certain period.

When you think that an asset is heading in one direction and is likely to hit a particular target, the One Touch bet is the way to play it. Although you get to choose the time period, you don't have to wait until the end to pick up the full prize. As soon as the price of whatever you're betting on hits your stated target, the bet closes and you win.

Let's say you're bullish on gold and your charting analysis tells you that gold is likely to break through the symbolic $1,000 mark within the next two weeks. The precious metal is trading at $984.06. So, you say that you want to win £100 if at some time before the close of trading (23:59 GMT) on 25 March, gold touches $1,000 an ounce.

The computer instantly does the maths and tells you that the cost of this bet is £89.95. In other words, you have to put down that amount in order to get back £100 if your bet is successful. The prize would therefore be £10.05 or an 11 per cent return, when expressed as a proportion of your stake.

If gold soars after just a couple of days to hit your $1,000 target, the bet is over and you've won. Another possibility is that it almost gets there with a few days to spare, allowing you to close the bet earlier for some – but not the full – profit. Likewise, if gold drops quickly to $950, the likelihood of your winning decreases. You can either hang on in the hope that it will bounce up to $1,000 by the end of the bet. Or you can close your bet and salvage whatever's left of your stake.

BetOnMarkets offers this bet on: CAC 40, FTSE 100, DAX 30, Nasdaq, S&P 500, Swiss Index, Dow Jones; A$/¥, A$/$, E/SwFR, E/£, E/¥, E/SEK, E/$, £/¥, £/$, NZ$/$, $/C$, $/SwFR, £/¥; Gold; BSkyB, Barclays, BP, BT, Lloyds TSB; Random Walk Indices

Also available at: BetsForTraders (One Touch) and Click Options (Move-Hi, Move-Lo).

No Touch Bet

Concept: price not to hit a certain level by a certain date.

The No Touch bet is the opposite of the One Touch bet. It's a 'bridge too far' wager. You reckon that a price won't get to a certain level during a fixed period. For example, say an asset is nearing a particular level, but faces potent historic support levels, and is already looking overstretched in terms of momentum. As a result, you bet against it hitting a specific target.

There is a key difference between the No Touch and the One Touch: you can't win the No Touch until the specified expiry date. Whereas you could take out a month-long One Touch and see your target hit after just a day, this clearly can't happen with a No Touch. Only at expiry will it be known for sure whether the asset you backed hasn't hit the specified level in the designated timeframe. That said, you may choose to shut your bet early in order to take a smaller profit or loss.

Also available at: BetsForTraders (No Touch) and Click Options (Stay-Hi, Stay- Lo).

Double Touch

Concept: price to hit two particular levels by a certain date.

The Double Touch is a great way to exploit wild markets such as those we've been experiencing since last summer. It's basically two One Touch bets rolled together. Rather than betting on a price hitting one level, you're punting on it hitting two – one above and one below. The further away the targets that you specify, the bigger the prize if you're proved right.

One might place this bet because periods of stability often give way to volatility in both directions. As with the One Touch, you can win this bet outright before the expiry date if the price hits both your levels. .

Available at: BetOnMarkets, although one could construct this bet oneself on other sites by buying high and low One Touch bets

Barrier range

Concept: price not to hit two particular levels by a certain date.

Markets can often go nowhere for substantial periods. Technical analysts believe that the stock market is trend-less for around one-third of the time. In such an environment, it is handy to be able to bet on sideways action. The Barrier Range lets you do just that. You specify two levels between which you think a certain price will remain over a fixed period. The closer these levels to the current price and the longer the period, the better the odds you’ll be quoted.

Also available at: BetsForTraders (No Touch Range) and ClickOptions (Tunnel).

Up or Down Bet

Concept: price to hit either one of two specified levels within a certain period.

Often after a market has been trading in a range for a while, you get a sense that a change is in the offing. The only problem is you don't have a strong feeling which way it's going to go. No problem: the Up or Down Bet allows you to profit from either eventuality. This is a great tool when an important announcement is imminent. For example, a better- or worse-than-expected US employment report can cause big swings in stocks, bonds, and the dollar.

Also available at: BetsForTraders (One Touch Range) and Click Options (Move-Any).

Double Contra Bet

Concept: price will hit neither or just one of two levels, but not both.

This may sound a little confusing, but the best way to think about it is as a Barrier Range bet that lets you get it half-wrong. In other words, one of your two barriers can get hit, but you still win. Clearly, your prize for this will be smaller for a Barrier Range with the same parameters. And you still win the same amount even if the price hits neither barrier, instead of one.

What ultimately matters here is the number of barriers, not the number of touches. For example, the price may repeatedly penetrate one of your barriers and then drop back. That’s fine, as long as the price doesn’t ever touch the other barrier.

Available at: BetOnMarkets.

Bull and bear bets

Concept: Bull – price will be above certain price at expiry. Bear – price will be below certain level at expiry.

These bets are a bit like One Touches. You are speculating that an asset's price will rise above or fall below a stated level. But whereas you automatically win with a One Touch the moment your stated level is hit, Bull and Bear bets have to be above or below the relevant target at the time the bet expires. What's more, being bang on your specified price at expiry isn't good enough: it must actually be above the relevant level for a Bull bet and below it for a Bear bet.

Also available at: BetsForTraders (binary bet), ClickOptions (Finish-Hi, Finish-Lo), Choice Odds, Cantor Alphabet, Ladbrokes and Paddy Power.

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Expiry Range Bet

Concept: price will be between two specific levels on the day of expiry.

The Expiry Range is a lot like the Barrier Range, but with one crucial difference: with this bet, what you're betting on is where an asset's price will be on the final day of the bet. What happens between now and then doesn't change the ultimate result of your bet. So, the price could spend all of its time outside of the range to one side or zigzagging beyond one boundary to the other. All that matters is that the price ends up within the range at the moment the bet expires.

Also available at: ClickOptions (Target) and BetOnMarkets (Binary Range).

Flash Up and Flash Down Bets

Concept: Double or nothing bets on the market's level between two points in a very short period.

If you're after instant satisfaction, flash bets may well appeal to you. A Flash Up Bet is a simple bet that a market will be higher in up to 15 minutes' time. You can bet over horizons of as little as two minutes. If the market ends up (or down for a Flash Down Bet) even just a fraction higher than the starting price when the bet expires a few minutes later, you win and double your money. If you lose, you get nothing.

To make things even more exciting, you don't actually know the starting level when you enter the bet. That's because the starting price is the next price after you enter the bet. Likewise, the closing price is the first price after the moment of expiry. Flash Bets are really little more than casino-type amusements, as it's very hard to apply any reliable methods to such short-term market movements.

Also available at: Cantor AlphaBet (five-minute moving odds, five-minute static odds), Paddy Power, Ladbrokes and Choice Odds (five-minute bets).

Double Up, Double Down, Intraday Double Up or Intraday Double Down

Concept: Double or nothing bets on the market's level between two points in time.

The clue is in the name as to the nature of these bets. Quite simply, you double your money if you get the direction of the move right. If the price of the asset is higher at expiry, your stake is doubled. This is the same idea as a Flash Bet, although these bets last longer. The Intraday versions start and finish within a day, whereas the straight Doubles can run for a week.

Also available at: Cantor AlphaBet, Paddy Power, Ladbrokes and Choice Odds.

Super Double

Concept: Quadruple or nothing bets on the market's level between four points in time.

The Super Double is simply a turbo-charged Double Bet. Instead of betting that a market will be higher or lower over one stage, you bet on its level over two stages. For example, you could bet that Barclays will be higher by at least 0.1 per cent at 9am today than it will be at 10am, and then higher at 10am that it will be at 11am. If you turn out to be right on both counts, you'd make £7.50 for every £2.50 you bet – quadrupling your money.

Click here to download a Bet Types table (Excel format)

MORE ON FIXED-ODDS FINANCIAL BETTING...

Click on the links below for more guides on fixed-odds betting:

Introduction to fixed-odds betting

The mechanics of fixed-odds betting

Shorting the FTSE

Advanced fixed-odds betting: arbitrage

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