How do perpetual CFDs work?

The short version, with Pepperstone's contracts

You pick a perpetual such as NAS100, GOLD or NVDA, choose buy or sell, and size the position. Pepperstone Group Limited (AFSL 414530) is the other side of the trade. Nothing expires and nothing rolls over; the position stays open until you close it or your margin runs out. While it is open, a funding adjustment is applied once a day at 5 pm New York time, at the rate Pepperstone set for that week.

One trade, step by step

An illustrative long position of $10,000 in NVDA PERP:

1. Open: buy $10,000 of NVDA PERP. Commission at 0.015% is $1.50.
2. Margin: part of your equity is held against the position. Pepperstone's Australian pages do not publish the perpetual rate; on ordinary share CFDs its retail cap is 1:5, which would mean $2,000 here. Treat that only as a guide.
3. Hold: at each 5 pm New York cut-off the position is adjusted by that week's funding rate applied to its value.
4. Close: the price has risen 4%, so the position is worth $10,400. The gross gain is $400, less $1.56 closing commission (0.015% of $10,400) and the funding paid while you held it.
5. Had the price fallen 4%, the $400 would be a loss, with the same costs on top.

Why it never expires, and what funding does

A dated futures contract is pulled toward the cash price as expiry approaches. A perpetual has nothing pulling it, so the provider uses funding instead: a periodic payment that makes it more expensive to hold the side that has drifted away from the market. For you, it behaves much like an overnight financing charge. Pepperstone's version differs from most crypto exchanges in one useful way: the rate is published for the week ahead, so a short hold can be costed before you place it.

What Pepperstone lists in Australia

• Indices: NAS100 and US500.
• Commodities: GOLD, WTOIL and BRENTOIL (GOLD carries 0.03% commission).
• Shares: AMD, CXMT.CN, DRAM, GOOGL, MSTR (0.03%), MU, NVDA, SKHYNIX.KR, SMSN.KR, SNDK, SPCX and TSLA.
• Platforms: TradingView, MT5, cTrader and the Pepperstone app.

Risks built into the design

• Weekend gaps: the contract trades while you sleep and while the underlying exchange is shut.
• Leverage cuts both ways, and a small move against you can consume your margin.
• Funding accumulates: a position held for weeks pays it every day.
• No ownership: you get price exposure only, without shareholder rights.
• No guaranteed stop-loss at Pepperstone, so a stop can fill beyond its level in a fast market.
• Eligibility: Pepperstone's Australian pages do not say whether retail clients may trade perpetuals.

Sources

Mechanics and costs as Pepperstone describes them.

• Pepperstone Australia: perpetual CFDs
• Pepperstone Australia: perpetual commission