All spread bets have a fixed timescale, which can be from minutes up to several months, or even theoretically years.

The fixed date and time when your bet will end is known as its expiry. This is the maximum time until which you can hold your position, although you can choose to close it before it expires.

Bets fall into two main categories based on their expiries.

Daily funded bets

Daily funded bets (which may be known by various names from different providers) will stay open for as long as you want. They are given a nominal expiry date at some distant point in the future - usually many years away - but you're free to close your position at any time before this, whenever the market is open for trading.

If you want to keep a daily funded bet open overnight, most providers will charge you a fee for doing so. These are called financing costs or overnight funding charges. So, for each day your position remains open you'll have additional costs. This means daily funded bets are generally used to speculate on short-term market movements only.

Quarterly bets

Quarterly bets are bets that expire at a specified date before the end of a given quarter. However, just like a daily funded bet or digital 100, you can close your position at any point before expiry if the market is open. You can roll quarterly bets over into the following quarter if you let your provider know in advance, although there may be a charge for this.

The cost of keeping a quarterly bet running to its expiry date is factored into its quoted price. This means the price for quarterly bets will typically differ from the underlying market value, and the spreads on quarterly bets are often wider than daily funded bets. For this reason they are generally used for longer-term positions.

The cost of spread betting

As well as the overnight funding charges mentioned above, and the spreads we discussed in the last section, there are a few other costs associated with spread betting. These will apply whether you win or lose, although the amount you pay will vary according to your provider and the dealing strategies you use.

Margin

Margin is the amount of money you need as a deposit in your account to open and maintain your positions, so it's a key factor in the affordability of spread betting. We explain how margin works in the orders, execution and leverage course.

Different spread betting providers will require slightly different levels of margin, and rates tend to vary across markets, according to the underlying conditions.

While you have a bet open, your margin payment is assigned to it and can't be used for anything else. However, this money is released as soon as you close the position.

Currency conversion fees

When you place a spread bet, it will be denominated in a particular currency. More often than not this will be in pounds - eg £10 per point - which will usually also be the base currency of your account. If, however, you are able to place a bet in a currency other than your base, you may need to pay an associated conversion fee.

For instance, many spread betting providers give you the option of betting on US shares in US dollars per point. In these cases, before your account can be credited or debited with any profit or loss, the dollar figure needs to be converted back into pounds, which may incur a fee.

Extra charges

Lastly, you may find that your spread betting activity (or lack of it) incurs some other fees, such as:

• Controlled risk premiums - as spread bets can be subject to slippage, you may be able to protect yourself against this risk by paying a small extra fee for a guaranteed stop (explained in the orders, execution and leverage course). Some providers waive this fee if the stop isn't triggered
• Feature subscriptions - your provider may also pass on the cost of providing certain platform features (eg advanced charting packages, live prices), although they may be willing to provide a rebate for more valuable customers