What is a DFB?
DFB is the abbreviation of daily funded bet, a term used in spread betting to describe a position that remains open until you decide to close it. For each day that your bet remains open, an interest adjustment is made to your account to reflect the cost of funding your position – hence the term daily funded bet.
The term DFB differentiates the position from a forward spread bet, which will expire after a set period of time. Instead of paying each day to keep the position open, the entire cost is covered by the spread you pay at the start.
There will be an expiry date attached to each DFB position, but this date is way out in the future. You can opt to close the position whenever you choose, at any point before this expiry date – as opposed to many cash bets, which expire at the end of each day unless you pay a rollover charge.
With daily funded bets, there is an interest rate adjustment made to your account that reflects the cost of extending the position. It is calculated using the current one-month interbank interest rate. For example, for a share DFB, this rate is for the currency of the country in which the share is listed.
Traders will generally use a DFB to speculate on short-term market movements, in the hope that the profit from the position will more than offset the cost of the overnight charges.