Rolling Daily Bets versus Quarterly

What would it cost to hold a long position in one of these for say 18 months? Please also suggest which products would enable me to do this most cost effectively? i.e. using rolling/futures bets.

I would suggest you trade the daily rolling cash share as opposed to the future contract. The reason being the spread charge may only be 0.2% going in and 0.2% closing out while a future bet the spread charge may be up to say 1% in and another 1% to close out. Also the margin on a daily rolling cash trade is half that of a future bet. In this case 12.5% on Fayrewood rolling and 30% on the qtly future bet.

Also, on the quarterly contracts you will have to incur roll over charges at expiry. The only difference being is with the two contracts is on the daily rolling contract you get closed out at the close each day and reopened for the following day so realizing the profit or loss for the day. I would like to add that most spread betting providers do not charge an extra spread for rolling each day only once when you open and when you finally close your deal out yourself not in-between. All you do is pay the funding cost daily. An example of this is below.

The example below is based on buying a £100 per point at 90p.
You buy £100 (10000 shares) of Fayrewood at 90p = £9000 consideration.
Funding charge is 2.5% above base rate for the year. So £9000 x 7.5% = £675 per year so for 18 months it will be £1012.5

However, it is important to note if you bought the shares with a stock broker you would have to put up the whole £9000 while with a spread betting provider you would only need to put up 12.5% of that and use the rest to invest in something else or leave in a bank account. Also spread betting is a tax free product free from any stamp duty and capital gains tax.

The spread charge will be current price 90p x 0.2% = 0.18 x stake (£100) = £18.

If you trade the future contract the spread charge will be £90 so as you can see its much more beneficial to trade the daily rolling contract.

Note: If you have a timeframe of a month or two for a trade you’d likely be better off with the shortest contract as opposed to the rolling daily – say March if this is January. Rolling daily incurs open close fee although they only charge one way. March contract incurs a slightly wider spread but that’s it. Most of the times I use 3 month contracts, but I wouldn’t have a problem closing a day later if it rose significantly, then take a new position.