How does funding work on perpetual CFDs?
Verdict
- On Pepperstone's perpetual CFDs, funding is a daily charge or credit on open positions, at a rate Pepperstone publishes a week in advance and applies at 5 pm New York time.
- Because the contract never expires, funding is what keeps its price tied to the underlying market and what pays for holding the position, in place of an overnight swap.
- Your holding cost is commission (0.015% per side on most of Pepperstone's perpetuals, 0.03% on gold and MSTR) plus the funding on each day the position is open.
- Since the weekly rate is known in advance, you can work out a hold's funding before you open it.
Futures expire and roll; perpetual contracts do not, so they need another way to keep their price close to the market they track. That mechanism is funding. Here is how it works in general and how Pepperstone applies it to its CFD version.
Pepperstone's version: weekly rate, daily charge
Pepperstone publishes each perpetual CFD's funding rate a week ahead and applies it once a day, at 5 pm New York time, to positions open at that moment. That is the main practical advantage over a typical crypto-exchange perpetual, where funding can reset several times a day: you know the week's rate when you place the trade. Pepperstone also charges a commission of 0.015% per side on most perpetuals, 0.03% on GOLD PERP and MSTR.US PERP, and you can trade them on TradingView, MT5, cTrader or its app.
Affiliate link — we may earn a commission at no extra cost to you.
Why a contract with no expiry needs funding
A dated future converges on the spot price at expiry, so its price cannot drift far from the underlying for long. A perpetual has no such date. Funding fills the gap: when it is charged on positions in one direction, holding that side costs money, which nudges the contract price back toward the market it tracks. It also prices the cost of carrying a leveraged position, much as a swap does on an ordinary CFD.
How much does it cost to hold a perpetual position overnight?
Commission is paid once to open and once to close; funding is paid for each 5 pm New York cut-off the position passes. The formula is position value multiplied by that day's published rate. Example on a $25,000 NAS100 PERP position held for three days:
- Opening commission: 0.015% of $25,000 = $3.75.
- Funding: $25,000 multiplied by the published daily rate, once for each of the three cut-offs. Take the rate from Pepperstone's perpetual page for that week.
- Closing commission: another $3.75 (more or less, if the position value has moved).
- Total: $7.50 in commission plus three days of funding.
Funding vs swap vs forward pricing
| Cash index CFD | Index forward | Perpetual CFD | |
|---|---|---|---|
| Expiry | None | Fixed date | None |
| Cost of holding | Overnight swap | See the contract specification | Daily funding at a weekly-set rate |
| US500 minimum spread | 0.4 points (Razor) | 1 point (US500-F) | See the live quote |
| Commission | None on index CFDs | None on index CFDs | 0.015% per side |
| Trading hours | Market hours | Market hours | 24/7 |
Points to check before you hold for weeks
- The rate resets weekly, so a long hold is only priced one week at a time.
- Check on the product page whether the rate is charged or credited for your direction, long or short.
- Weekend trading means prices can move while the underlying exchange is closed; Pepperstone offers no guaranteed stop-loss.
- Pepperstone's Australian pages do not state whether retail clients can trade perpetuals; its UK site limits them to professional clients.
Sources
Do perpetual CFDs also charge a swap?
Pepperstone describes funding as the holding charge on perpetuals; the overnight swap applies to its ordinary CFDs.
When is funding applied?
Once a day at 5 pm New York time, to positions open at that moment.
Can the funding rate change while I hold a position?
Yes, from week to week. Pepperstone sets each week's rate in advance, so the change is published before it applies.
CFDs are complex instruments with a high risk of rapid losses because of leverage, and perpetual contracts add weekend and funding-rate risk. Make sure you understand them before trading. This is general information only.