Quarterly (Futures Style) Bets

Quarterly bets, just like rolling daily bets, always have an expiry date but all open bets are settled on the futures expiry date. A quarterly bet, also known as a future or forward price, is derived from the current underlying market price, but adjusted for the cost of funding until the future expiry date.

Funding has two components - financing and dividends:

• Financing - quarterly bets have financing built into the quote i.e. you are not charged any financing on a nightly basis, but the cost of all the anticipated funding up to the expiry date is built into the quote offered.
• Dividends - if the underlying equity is likely to go ex-dividend before the bets expiry date, the value of the estimated net dividend is deducted from the future price since the holder of a spread betting contract is not entitled to any dividends. A spread is then applied around the adjusted future price.

Due to financing and dividends the quote given may be quite different from the price of the underlying instrument or market.

Futures style bets usually expire on a quarterly basis (March, June, September and December) and there are usually up to two quarters open at any point in time- the near quarter (expiring in 0 to 3 months) and the far quarter (expiring in 3 to 6 months), but you need to bear in mind that not all the brokers offer the far quarter but some other brokers offer quarters even further out. Quarterly bets can be closed out at any time before the expiry date as well as being left to cash settle at expiry.

Quarterly (Futures) Bet Example:

Gold is being traded in the commodities market at 1100.0-1100.5. We have one month to go to the next futures expiry day, and the futures style spread bet is at this moment 1100-1101. The 50p difference between futures and rolling daily bet represents borrowing cost which would be incurred by the rolling daily position had it been held until the futures expiry date.