Daily Spread Bets and Daily Funded Bets Guide

Day Trading
Rolling Daily, Rolling Cash and Daily Funded Bets = Useful for Short-term Trades


What is a Rolling Daily Spread Bet / Daily Funded Bet?

A ‘Daily’ spread bet is often called a ‘Rolling Cash’ or ‘Rolling Daily’ spread bet.

These are spread bets that have no closing (expiry) date. I.e. unlike a “futures” bet these trades do not expire.

These bets just stay open until:

  • arrow_forwardYou manually close them, or
  • arrow_forwardThe trade hits an order to close them, e.g. Stop Loss, Guaranteed Stop Loss or Limit order (aka Take Profit) order
  • arrow_forwardYour spread betting / CFD account runs our of money and so your trade is closed (because there’s not enough money to cover your trade)
These have become the standard type of bet in the spread betting industry.

These markets are popular because they often have tighter spreads than Futures trades (aka ‘Forward’ trades).

Therefore, if you want tight spreads and no expiry date, rolling spread bets are a good solution.

The Rollover…

Any trade that is open at the end of the trading session / evening will automatically roll over into the next trading session / day.

When a trade rolls over you are normally charged a small overnight financing fee.

Daily / Rolling Cash / Rolling Daily markets tend to suit day-traders, and short-term traders, as these traders will often avoid overnight fees because they close most of their spread bets before they roll over.

These are common trades on most platforms e.g. the Financial Spreads & Core Spreads platforms.

Also see below re: Costs of Daily Trades.


What is a Daily Funded Bet?

A Daily Funded Bet (DFB) is very similar to Rolling Spread Bet, i.e.:
  • arrow_forwardYou can typically keep the trade open for as long as you want
  • arrow_forwardThe spreads can be tight
The main difference is that these trades have an arbitrary expiry date that is sometimes ten years away. In practice, they work like a Rolling trade and don’t have an expiry date.

(If you want to keep a trade open for years then spread bets and CFDs are probably the wrong products due to the cost of holding the trade for that long).

As with Rolling bets, there is a small overnight financing fee to keep a DFB open, hence the name ‘Daily Funded Bets’.

You normally see Daily Funded Bets on the IG platform where it is the standard (and most popular) type of bet.

Also see below re: Costs of Daily Trades.


Costs of Daily Trades

Daily, Rolling Daily and Daily Funded Bet are useful if you want to speculate on short-term market movements.

The overnight financing fee is the main issue with this type of trade but the cost is low and normally acceptable for any trade that you want to keep open for 1-14 days.

If you want to hold a trade for a longer period of time then you may be better off with the Futures (aka ‘Forward’) spread bet, see below for details.

With a Daily Funded Bet / Rolling Spread Bet, the overnight financing fee is simply interest charged on the size your trade.

The interest rate charge is often = (the base rate of the market you are trading + 2.5%) / 365

E.g. for a FTSE 100 trade charge = (LIBOR + 2.5%) / 365

I.e. a pretty fair borrowing rate and similar to many mortgage rates.

Note that the 2.5% is an extra bit of profit for the spread betting firms but it’s also a pretty industry standard rate amongst the usual platforms. As of 2017, you won’t find much difference if you shop around.


Fully Worked Overnight Financing Fee Examples

We have done the maths and have fully worked overnight financing fee examples:

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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