Perpetuals Explained: Markets That Never Close

What a perpetual is, how it differs from a regular CFD, and what to watch out for

You may have noticed a new type of instrument on our list: familiar names with a “.p” at the end. They look like the instruments you already know, so what makes them different? The short answer: when you can trade, and how finely you can size your trade.

What is a perpetual?

A perpetual is a contract that follows the price of an asset, just like a regular CFD. As with every CFD on BROKSTOCK, you are trading the price movement, not owning the underlying asset.

Two things set it apart:

●     Trades 24/7, including weekends.

●     Traded in fractional lots.

Perpetual vs regular CFD at a glance

●     Regular CFD: follows the underlying market and trades when that market is open.

●     Perpetual (.p): follows the same price around the clock, weekends included, in fractional lots.

●     Costs: The same on both CFD and Perpetual.

Why 24/7 trading matters

Markets do not wait for office hours. A company can release results after the close, a central bank can make a surprise announcement  on a Friday evening, or a global headline can break over the weekend. With a regular CFD, you often have to wait for the market to open before you can respond, and the price may have already jumped by then.

With a perpetual, you can respond when the news lands. That could mean opening a new position, or it could mean closing or protecting one you already hold. Having the choice, in either direction.

Why fractional lots matter

A lot is the standard unit of size in a trade. Fractional lots mean you are not limited to whole units, so you can choose a smaller position that matches how much you are comfortable risking. For a beginner, that means finer control over position size and the ability to start small.

Advantages of perpetuals

●     Always-on access: trade on weekdays, weekends and public holidays.

●     React in real time: respond to news as it happens, not when the market opens.

●     Flexible position size: fractional lots let you size a trade to your own risk limits.

●     Margin account: as with other CFDs, you can take a view that a price will rise (go long) or fall (go short).

Risks to consider 

●     Fast is not the same as right: early reactions to news are often reversed once the full picture and the main market arrive. Being able to trade at any hour can also make it easier to overtrade.

●     You do not own the asset: you hold no shares or physical asset, so there are no shareholder rights and no dividends.

●     Different prices at the open: the price you trade overnight can differ from where the main market opens.

A perpetual is a regular CFD without the closing bell. The extra access can be useful when news breaks outside normal hours, and fractional lots let you keep your position size under control. But more access also means more ways to trade quickly.

Disclaimer:
*Any opinions, views, analysis, or other information provided in this article is provided by BROKSTOCK SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BROKSTOCK SA does not warrant the correctness, accuracy, timeliness, reliability, or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions, and all decisions are made at your own risk. BROKSTOCK SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss, including, without limitation, any loss of profit which may arise directly or indirectly from the use of the market commentary. The content contained within the article is subject to change at any time without notice. BROKSTOCK SA is an authorised financial services provider - FSP No. 51404. T&Cs and Disclaimers are applicable: https://brokstock.co.za/
** This article was prepared by BROKSTOCK analyst Maboko Seabi