Trading CFDs/Margin FX carries risk and is not suitable for everyone. Refer to our PDS and TMD. Pepperstone Group Limited, AFSL 414530.

Perpetual CFDs are high-risk leveraged products and may not be suitable for all investors. Before trading, you should read the relevant Key Information Document, product specifications, margin requirements, costs and charges disclosure, order execution policy and risk disclosure.

Written by: Evan Rouse | Financial Writer

Perpetual (Perp) CFDs are contracts for difference (CFDs) that give you exposure to perpetual futures markets. Like any CFDs, they let you speculate on price movements without owning the underlying asset. This means you can go long or short with leverage, while putting down only a fraction of the position’s full value. Leverage magnifies both potential profits and potential losses, and losses can occur rapidly. 

What sets them apart is what they track. Perpetual futures markets are designed to run indefinitely, without the expiry dates that come with traditional futures. This single difference shapes how perpetual CFDs trade, when they trade and what they cost to hold.

In this guide, we’ll explain how perpetual CFDs work, how they compare to other products, whether they’re right for you, and how to get started.

A perpetual CFD is a contract for difference (CFD) that tracks a perpetual futures market – a market designed to run with no expiry date. Perpetual futures are like traditional futures in one respect – they let you trade on where a price is heading – but unlike traditional futures, they never expire.

Perpetual CFDs bring perpetual futures markets into a CFD environment. So rather than trading a perpetual futures contract directly, you trade an instrument that follows its price. This means you get leveraged exposure in either direction, without owning the underlying asset, which can magnify both potential profits and losses.

As with all CFDs, you also do not receive any ownership rights, voting rights, delivery rights, custody rights or direct claim over the underlying market or asset referenced by the CFD.

Day to day, a perpetual CFD behaves like any other CFD. When you open a position, your profit or loss depends on how the market moves relative to your entry price. If it moves in your favour, you may profit. If it moves against you, you may lose.  

Because perp CFDs are leveraged products, relatively small market movements can have a larger impact on your account balance. You may lose some or all of the money allocated to CFD trading. 

Three things make perpetual CFDs different, and they all come from the fact that the market behind them never expires.  

First, there's no settlement date forcing you out and nothing to roll over. You hold your position for as long as your margin supports it. ¹  

Second, because perpetual markets don't follow standard exchange hours, you can trade them 24/7 – weekends and public holidays included. ² 

The third defining feature is funding. Because a perpetual market never expires, it uses a small recurring charge to stay in line with the price it tracks. On many native perpetual venues, funding passes between long and short traders several times a day, at a rate that keeps moving – making holding costs hard to predict. Perpetual CFDs can handle this more simply.  

With Pepperstone, the funding is translated into a single weekly swap rate, set in advance and posted as daily entries, so you can see your funding cost for the week ahead rather than facing a charge that changes by the hour.

Perpetual CFDs sit alongside several other ways of trading the same markets, and knowing how they differ can help you choose the right one. Here’s how they stack up against four products traders often compare them with: standard CFDs, traditional futures, perpetual futures and RWA CFDs.

Perpetual CFDs and standard CFDs have a lot in common. Both are derivatives that let you speculate on price without owning the underlying asset, and both can be traded with leverage, long or short. The main difference is the market each one tracks: a standard CFD follows a spot or cash market during its normal hours, while a perpetual CFD follows a perpetual futures market that never closes. 

Perpetual CFDs and futures both give you market exposure without ownership, but they’re built differently. A traditional future has a fixed expiry and trades on a futures exchange. As that date approaches, you're forced to close or roll into the next contract, often at a cost.  Whereas a perpetual CFD has no expiry and trades through a broker – so there are no contract rollovers to manage or expiries to track. However, the position remains subject to CFD margin requirements, funding/swap adjustments, close-out rules, liquidity and product availability. 

Perpetual CFDs and perpetual futures track the same kind of market, but they’re not the same product. Perpetual futures are traded directly on a crypto or derivatives venue, whereas a perpetual CFD gives you exposure to that market through a CFD account. You do not trade the underlying perpetual futures contract directly, and you do not own or hold the underlying crypto-asset or any related token.

If you’re coming from a native perpetual exchange, a few things change: there are no wallets or private keys to manage, and if a position goes against you, it’s closed through standard margin-call and stop-out rules. 

That also means no auto-deleveraging. On many native venues, if the exchange can't cover a bankrupt position, it can trim profitable traders on the other side to balance the books, even when they've done nothing wrong. With a perpetual CFD, your position is governed by clear, consistent margin rules instead. 

An RWA is a tokenised version of something real, like a government bond, a bar of gold, or a slice of property, recorded on a blockchain as a claim on the asset behind it. RWA CFDs let you trade the price of a tokenised asset without holding the token yourself.

The real contrast with a perpetual is what sits underneath. An RWA is backed by a genuine, off-chain asset you hold a claim on. A perpetual simply tracks the price of a market that's often synthetic, with nothing physical behind it. Both can trade around the clock, so it's the backing – not the hours – that really sets them apart. However, when trading either product as a CFD, you do not own the token, the underlying asset, the perpetual futures contract or any direct claim over them. 

Some perpetual CFDs track a synthetic market rather than an exchange-traded one. A synthetic market takes its price from a model, a reference price or another methodology, rather than a directly traded asset. In practice, that’s how a perpetual CFD can give you exposure to things like private company valuations or thematic markets you couldn’t easily reach through a traditional exchange. The flip side is that there’s nothing tangible underneath, and a synthetic market can behave differently and less predictably than the real thing – so it’s worth being clear on exactly what you’re trading.

Perp CFDs may only be appropriate for clients who understand leveraged trading, margin close-out, funding/swap charges, 24/7 or extended-hours market risks, pricing methodology and the possibility of rapid losses.  Before trading any Perp CFD, you should consider whether you have read and understood the relevant KID, product specifications, costs and charges, margin requirements and risk disclosures. 

Perpetual CFDs are leveraged products, and that brings real risk. Before you trade, consider the following: 

• Prices can move quickly and sharply.
• Leverage magnifies losses as well as gains.
• Funding costs add up over time.
• Synthetic markets can behave differently from the markets they reference.
• There may be pricing, execution, slippage, platform availability and market disruption risks.
• The underlying perpetual reference market may be less transparent, less liquid, more volatile or subject to different rules than traditional regulated markets.
• You could lose some or all of the money supporting a position. Because there's no expiry, a losing position stays open, and keeps incurring costs, until you close it or your margin runs out.³
• Stop-loss orders and other risk management tools may help manage risk, but they do not guarantee that losses will be limited to a specific amount, especially in fast-moving or gapping markets.
• Perp CFDs are not suitable for all clients and should only be traded by clients who understand CFDs, leverage, margin, funding/swap charges and the risks of the relevant reference market.

There’s no one-size answer, as it comes down to how you like to trade. Perpetual CFDs may suit you if you want to trade around the clock, including weekends, or you’re drawn to markets that don’t fit neatly into exchange hours.  

They can also appeal if you’ve traded perpetuals on a native venue and would rather have a regulated account, predictable funding and standard CFD risk treatment. If you mostly trade traditional markets during their normal hours, a standard CFD may be the simpler fit – and plenty of traders use both, choosing the right tool for each trade.

Getting started is much like trading any other CFD. 

1. Open and fund an account: Choose a provider that offers perpetual CFDs, such as Pepperstone, and complete the account-opening process.
2. Choose your market: Look over the available instruments, trading conditions, margin requirements and any holding costs. Perpetual CFDs are usually labelled with ‘-PERP.’ You should read the relevant KID, product specifications and costs and charges information before trading.
3. Decide whether to buy or sell: Go long if you expect the price to rise, or short if you expect it to fall.  Both long and short positions involve risk. Losses may occur quickly if the market moves against your position.
4. Manage your risk: Use tools such as a stop-loss and size your position to suit your account and risk tolerance – bearing in mind a stop won’t always trigger at your exact price if the market gaps or moves fast.  A stop-loss order does not guarantee execution at your chosen price. In fast-moving, illiquid or gapping markets, execution may occur at a worse price than requested.
5. Monitor your position: Keep an eye on the market, your margin and any holding costs for as long as the trade is open, and close whenever you like. Because Perp CFDs have no fixed expiry, positions can remain open and continue to incur costs until you close them, your position is closed under the applicable margin rules, or the product becomes unavailable.