Trade perpetual futures on Wealthsimple

Overview

Perpetual futures let you trade crypto, gold, and silver with leverage and no expiry date, around the clock, inside your margin account.

Perpetual futures (also called perpetuals or perps) are contracts that track the price of an asset, like Bitcoin or gold. Unlike a regular futures contract, a perpetual doesn't expire, so you can hold a position for as long as you want. You use leverage, which means you can open a position that's larger than the cash you put up. Leverage can increase both your potential gains and your potential losses.

Perpetuals are cash-settled. You never own the asset itself, and your gains and losses move as USD cash. Perpetuals live inside your existing non-registered margin account. They aren't a separate account, and they share the same buying power as the other investments in that account. Perpetuals trade in USD.

Eligibility

To trade perpetual futures, you need:

• An individual non-registered margin account. Learn how to open a margin account.
• USD enabled on that account. Learn how to upgrade to USD accounts.
• Futures enrollment, which includes the futures suitability questions.
• Perpetual futures enrollment, which includes a short education in the Wealthsimple app.

If you aren't enrolled in futures yet, you can complete both enrollments at the same time. If you already trade futures, you still need to complete the perpetual futures education before your first trade.

Perpetual futures aren't available in registered accounts, joint accounts, corporate accounts, or non-margin accounts. Authorized traders can place perpetual futures orders. Both you and your authorized trader need to be enrolled in futures and complete the perpetual futures education.

How perpetual futures differ from futures

Perpetuals work differently from the futures you may already trade in three main ways:

• No expiry date. Regular futures contracts expire on a set date. Perpetuals don't, so you can hold a position as long as you want. They also trade around the clock rather than at set hours.
• Flexible leverage. You choose how much leverage to use, up to each market's maximum, rather than being locked to a fixed contract size.
• Funding rate. Instead of using an expiry date to keep the contract price in line with the market, perpetuals use a funding rate. This is a payment exchanged between clients with long positions and clients with short positions on a regular schedule.

Place an order

Complete the education

The first time you trade perpetuals, you go through a short education on the market's detail page. It covers how perpetuals work, how funding rates work, how leverage amplifies gains and losses, and the mark price.

1. Log in to the Wealthsimple app
2. Open the perpetual you want to trade
3. Tap Get started
4. Read each of the four education tips and tap Next
5. Tap Start trading

Open a long or short position

1. Log in to the Wealthsimple app
2. Open the perpetual you want to trade
3. Tap Trade
4. Tap Long if you think the price will go up, or Short if you think it will go down
5. Enter the amount you want to put up
6. Use the slider to choose your leverage, up to the maximum for the market. The slider starts at a default leverage that you can change. Below the amount, you can see your leverage and the total value of your trade after fees
7. Tap the arrow button
8. Review the order details, including your fees and the estimated reduction in your buying power
9. Tap Submit order

Close a position

1. Log in to the Wealthsimple app
2. Open the perpetual you want to close, or find it under your Holdings
3. Tap Trade, then tap Close position
4. Choose how much to close. It starts at the maximum (100%). You can also choose 25%, 50%, 75%, or enter a custom amount
5. Review the details, including your account, the 0.12% fee, the estimated reduction in your leverage, the updated value of your position, and the increase in your buying power
6. Tap Submit order

Order type

All orders for perpetuals are market orders. A market order buys or sells at the best available price when you place it.

Minimum trade size

Each market has a minimum trade size, shown on its security detail page. The minimum depends on the market and its maximum leverage. For some markets, it's as little as $1 USD. The app doesn't let you place an order below the minimum.

Open a position in the opposite direction

You can't reverse a position in a single order. If you have an open perpetual position, close it before you open a position in the opposite direction.

Leverage, margin, and liquidation

Leverage

You choose how much leverage to use when you place an order, up to the maximum for each market. More volatile markets have lower maximums to help manage risk.

How margin works

When you open a perpetual position, we set aside part of your buying power as margin. Margin is collateral that stays set aside while your position is open. It isn't a loan, and leverage on a perpetual isn't borrowed money. You don't pay interest on the margin or on the leveraged part of your position. Margin interest can apply in one case, which is covered in the Fees section. When you close the position, the margin is released back to your buying power.

Shared buying power

Your perpetual positions use the same buying power as the rest of your margin account. Your stocks and futures can help fund a perpetuals trade. A loss on a perpetual position can also reduce your buying power across your whole account.

Margin calls and liquidation

If your buying power stays negative, you get a margin call. Margin calls on perpetuals work the same way as margin calls on the rest of your margin account. You have 48 hours to address a margin call, for example by adding funds or closing positions. If you don't, we automatically sell some or all of the assets in your account to cover it. Because perpetuals share your margin account, this happens at the account level, so we may sell assets other than your perpetual position. We reserve the right to sell before the deadline. Learn more about margin calls.

Understanding the funding rate

At each funding time, the exchange compares the price of the perpetual to the market price of the underlying asset. If the perpetual trades above the market price, clients with long positions pay clients with short positions. If it trades below, the payment goes the other way. This keeps the perpetual's price in line with the market. It's a transfer between clients, not a fee that Wealthsimple charges. We don't set the funding rate. It comes from the exchange, and everyone who holds the same market at the same funding time gets the same rate.

How often funding happens depends on the market:

• Crypto markets: three times a day, at 12:00 am, 8:00 am, and 4:00 pm ET
• Metals (gold and silver): once a day, at 10:00 am ET.

You pay or receive funding only if you hold a position at the funding time. If you close your position before then, you don't pay or receive funding for that period.

Funding is based on the total value of your position, not just the cash you put up. Leverage doesn't change the funding rate, but a position with more leverage has a larger total value for each dollar you put up, so funding can affect it more.

The funding rate is capped at 2% in either direction for each funding period. If the rate is smaller than 0.01%, no payment is made. Funding is added to or deducted from your available balance, and each funding payment appears as its own line in your Activity.

On each market's security detail page, you can see the current Funding rate and the Funding cycle, which shows the time until the next funding. The funding rate shown applies to one funding period.

Perpetuals trade around the clock, but settlement follows business days. Activity from Saturday, Sunday, and Monday settles on Tuesday. You get one statement for each business day, and weekend trading and funding activity appears in Monday's statement.

Fees

You pay a trading fee of 0.12% of the total value of each trade. The total value is the full size of the position you open or close, including the part that comes from leverage. When you use leverage, it's more than the cash you put up. The fee applies when you open a position, when you close it, and when we liquidate it. Because the fee is based on the total value, it goes up with the leverage you use. The fee is separate from the funding rate.

Perpetuals trade in USD, and your order doesn't convert CAD to USD for you. If you convert CAD to USD before you trade, our standard currency conversion fees apply. Learn more about converting funds between CAD and USD.

You don't pay interest on the margin or on the leveraged part of a perpetual position, because leverage isn't borrowed money.

Frequently asked questions

Related articles

• Trade futures on Wealthsimple
• Open a margin account
• Understanding margin calls
• Key concepts and terms in a margin account
• Learn about fees and interest in a margin account
• Upgrade to USD accounts for stock and crypto trading