Perpetual futures, or “perps,” let you trade on whether an asset’s price will go up or down without owning the asset. They started in crypto and now cover stock indices and metals too. Until now, most Canadians who wanted to trade them had one route: offshore venues, outside Canadian oversight.
You can now trade more than 300 of them in the Wealthsimple app or on the web.
Why trading on a regulated platform matters
Trading through an offshore, unregulated venue comes with costs that are easy to overlook:
Your collateral sits with them. The platform holds your margin, and its solvency and conduct aren’t backed by Canadian rules.
There’s no Canadian investor protection. If something goes wrong, you have no regulatory recourse here at home.
The tax paperwork is all on you. Offshore venues don’t issue Canadian tax slips, so the full reporting burden falls on you.
On Wealthsimple, you trade on a regulated platform, with your collateral held under Canadian rules.
A look at what a perpetual future is
A perp is a derivative contract, like a traditional futures contract, that tracks an asset’s price. If you think the price will rise, you go long. If you think it’ll fall, you go short. However, it differs from a traditional futures contract in two ways:
It never expires. A traditional future contract has a set end date. A perp doesn’t, so your position stays open until you close it or it’s liquidated.
It’s priced differently. To hold a traditional futures contract past its end date, you roll it over into the next contract. A perp has nothing to roll, so it uses a funding rate instead: a small payment between traders every 8 hours (more on that below).
To open a position, you put up a fraction of its value as collateral, called your initial margin. That’s what gives you leverage, and you choose how much to use, from 1x (no leverage) up to the maximum set for each contract. From there, your profit or loss moves with the asset’s price.
How the funding rate works
Without an expiry date, nothing naturally pulls a perp’s price back in line with the asset’s actual market price (the spot price). Perps use a funding rate instead. Every 8 hours, a small payment moves between traders on opposite sides of the market. If the perp trades above spot, longs pay shorts. If it trades below, shorts pay longs. That keeps the two prices close together.
For you, funding is an ongoing cost of holding a position, or a credit if you’re on the receiving side. When demand for one side surges, funding rates can spike, and high funding can eat into your profits, especially when the market isn’t moving your way.
What you can trade
At launch, you can trade more than 300 perps across crypto, stock indices, and metals. Each contract shows its current price and its maximum leverage. The contract sets the ceiling, and you decide how much of it to use.
Perps trade around the clock, apart from short scheduled maintenance windows. During a maintenance window, your open positions stay open, but you may not be able to place new orders.
Perps are available in a non-registered margin account with USD enabled, and you’ll need to be enrolled in futures trading. They draw on the same buying power as everything else in that account. Like other leveraged derivatives, they can’t be held in a TFSA or RRSP.
What it costs
Each trade costs 0.12% of the position’s full value, including the leveraged amount. That applies when you open a position, when you close it, and if it’s liquidated. Say you put up $1,000 USD at 5x for a $5,000 USD position. That’s $6 USD to open it and another $6 USD to close it. Funding is separate, and it’s paid between traders, not to Wealthsimple.
What perps let you do
Trade in either direction. Go long if you think an asset is heading up, or short if you think it’s heading down.
Hold for as long as your idea holds. There’s no expiry date forcing you out of the trade.
Set your own exposure. You choose your leverage and when to exit.
React when news breaks. Perps trade around the clock, so a headline at 2:00 am on a Sunday doesn’t have to wait for Monday’s open.
How to place a trade
Find a contract. Open the Perps tab in the Wealthsimple app or on the web, and pick from more than 300 contracts.
Choose long or short. Check the asset, its maximum leverage, and the price chart, then choose “Long” or “Short.”
Set your amount and leverage.
Fund the position with cash or crypto.
Set your exits. Add a take profit level to lock in gains automatically and a stop loss to limit losses.
Keep an eye on funding and position health. In volatile markets, funding can spike and your position health can change quickly.
Close the position when you’re ready, to take a profit or limit a loss.
Perpetuals vs. futures vs. spot trading
Spot (stocks, ETFs) | Futures | Perpetuals | |
|---|---|---|---|
| Own the asset? | Yes | No | No |
| Expiry | None | Quarterly (March, June, September, December) | None. Your position stays open until you close it |
| Leverage | Only through a margin account or leveraged ETFs | You choose, up to a maximum set by each contract’s margin requirement | You choose, up to a per-contract maximum |
| Profit from falling prices? | Only by short selling or with inverse ETFs | Yes, by going short | Yes, by going short |
| Trading hours | Market hours | Nearly 24/6 | Around the clock, apart from short maintenance windows |
| Ongoing cost | None, unless you borrow on margin | None | Funding, every 8 hours |
| What keeps the price in line | You’re trading the spot price | Converges with spot near expiry | Funding, every 8 hours |
The risks: read this part twice
Perps are leveraged, and that cuts both ways.
Leverage amplifies losses as much as gains. A small move against a highly leveraged position can wipe out your margin quickly.
Liquidation. If the market moves against you and your position health falls below the maintenance margin, your positions are liquidated (closed automatically), and you lose the margin behind them, plus the 0.12% trading fee on the closing trade. Liquidation is based on the leverage, exposure, and risk across your whole account, and it can happen fast in a volatile market. Wealthsimple shows your position health in real time so you can manage it.
You can lose more than your margin. In a fast-moving market, a position can close at a worse price than expected, so your losses can be bigger than the margin you put up.
Funding costs add up. Funding is charged every 8 hours and can spike when demand surges, eating into your profits over time.
Perps sit alongside Wealthsimple’s futures and options. They’re not a replacement for them, and they’re not for everyone. If you’re new to perps, start with our guides to what perpetual futures are, how funding rates work, how to avoid liquidation, and the trade-offs.
Ready to trade perps?
Perps are live on Wealthsimple. Find the Perps tab in the app or on the web to get started.
Wealthsimple Trade is offered by Wealthsimple Investments Inc. (“WSII”). WSII is a member of the Canadian Investment Regulatory Organization. Customer accounts held at WSII are protected by Canadian Investor Protection Fund (“CIPF”) within specified limits in the event WSII becomes insolvent. A brochure describing the nature and limits of coverage is available upon request or at CIPF.
