BitMEX – High Octane Cryptocurrency Trading

Are you bored trading cryptocurrencies with a mere 20:1 margin? Do you need some serious, steroid-infused, buckle-me-in, tiger-riding, who are you and why am I in your bed?, ethereum, bitcoin and general crypto trading? So take a look at BitMEX, which has developed an exceptionally sophisticated platform allowing the trading of crypto derivative instruments with leverages as high as 100:1.

Of course, just because you CAN trade at 100:1 does not mean you need to, or of course that you should.  Leverage is available as low as 1:1, and the BitMEX exchange has the best liquidity volumes in the market, as well as very low fees, instant account opening, and excellent support.  Hands down, this is the best bitcoin futures platform in the market.

Be warned – if you take advantage of their highest leverages, you have entered the most speculative corner of the leveraged cryptocurrency trading niche. The platform is also pretty sophisticated and meant for traders somewhat familiar and comfortable with derivatives trading. If you don’t really understand what you are getting into, your chance of losing your investment is greater than earning a profit particularly if you are playing with higher leverages.

Get a 10% discount on your trades for six months.

You need to buy bitcoin

BitMEX uses bitcoin as the engine for their platform. They accept no fiat deposits, nor do they accept deposits in the different cryptocurrencies available for trade. This means traders can get started with just an email and password, and there is no additional documentation required for withdrawal – withdrawals also processed just in bitcoin. BitMEX does not accept US traders, customer location check is limited to IP.

If you are knowledgeable about derivatives and interested in trading crypto volatility but you have been held back by your reluctance to actually buy bitcoin, check out our reviews of the best bitcoin exchanges and just take the plunge.

Cryptocurrency Derivatives with BitMEX

Bitcoin, being the only accepted currency for deposit, serves as collateral on all trading contracts regardless of what underlying instruments are being tracking, be it ethereum vs bitcoin, bitcoin against yen, and so on.

It is no simple task to develop a platform that can offer leverages up to 100X on the spot market in a sustainable fashion. The ability to do so rests in no small part on BitMex’s underlying trading technology, which we will not detail but basically allows for super fast executions, and is up to standard with mainstream derivatives platforms.

Just as importantly, there must be solid logic anchoring spot derivative instruments to the underlying asset value – in other words, so the price of bitcoin on BitMEX resembles the price of bitcoin at, say, Coinbase. And finally, a mechanism must be established to ensure that BitMEX can handle massive swings in value. We discuss both of these issues below, in turn.

Thought I told you that this party don’t swap?

So how does a derivatives platform ensure that the value of their most popular contract, XBTUSD, as well as their new instrument ETHUSD, is tethered to the value of the underlying asset it represents? You make a new trading product and call it the perpetual swap, that’s how. Essentially, a funding rate is set to jam the price back in line. If the funding rate is positive the longs pay shorts, if negative the shorts pay longs, thrice daily, once every eight hours. This interest is set to keep the price in line with the wider market, which is represented by a baseline calculated using a 33/33/33 average between Coinbase, Bitstamp, and Kraken. The rate also happens to keep trading more or less hinged to reality during the interim periods.

	Initial Margin	Maintenance	Maker	Taker
XBTUSD	1%	.5%	-.025%	.075%
ETHYUSD	2%	1%	-.025%	.075%

Use this link for a 10% fee discount for six months.

Auto-Deleveraging – maintaining a healthy trading ecology

Auto deleveraging (ADL) is a method by which BitMEX can ensure liquidated positions can be closed even in a massively swinging market whilst avoid things like socialized loss. When a position bankrupts without available liquidity, the positive side of the position is deleveraged, in order of profitability and leverage, the highest leveraged position first in queue. Traders are always shown where they sit in this ADL queue, if it were indeed to be needed.

Trading at BitMEX

Lovely platform, all very intuitively placed. Click on Trade, and all the instruments will be displayed beneath. Clicking on the particular instrument opens the orderbook, recent trades, and the order slip on the left. The order book shows three columns – the bid value for the underlying asset, the quantity of the order, and the total USD value of all orders on short and long side.

There are a number of trading features easily set up on the trade slip – SLs, TPs, Time In Forces, and even Hidden Orders. Easily drag your way to higher leverage with a slider, which ascends from a serene green to a frantic red as numbers increase. Below you can see my placed order of litecoin at 25X margin. Shows you your unrealized PNL, the PNL if you were to liquidate at market (scroll over the unrealized PNL), your margin, etc.

A click on stops show your stop or take profit, as well as the pips between. You can see below my stop loss, which ended up costing me $500 I would have made (hit and then bounced way up). And to think I just did it for the screen shot you probably won’t even look at.

Top it off with a troll box that is actually relatively civil, entertaining and interesting – although it was recently infiltrated by a bunch of bcash trolls – and the whole trading experience is quite nice.

Futures

Find below vital stats for all futures instruments.

	Bitcoin	Ethereum	Bitcoin Cash	Ripple	Cardano	EOS	Tron
Initial Margin	1%	2%	5%	5%	5%	5%	5%
Maintenance	0.5%	1%	2.5%	2.5%	2.5%	2.5%	2.5%
Maker Fee	-.025%	-.025%	-.05%	-.05%	-.05%	-.05%	-.05%
Taker Fee	.075%	.075%	.25%	.25%	.25%	.25%	.25%
Settlement Fee	.05%	0%	0%	0%	0%	0%	0%

Note that a negative fee amount represents a rebate.

Ticker Meaning

The ticker expresses the expiration of the particular futures contract – I use the above tickers simply for demonstrative purposes as many would have expired prior to your reading this sentence. The first three letters are the coin symbol, followed by the month code, standard across the derivatives industry, and then the year in which the contract settles.

For example, Bitcoin is represented by its (less popular) coin symbol XBT, then the letter U which corresponds to the month September, and then 17, meaning that settlement takes place in 2017. Expiration is always the last friday of the settlement month, which happens to be the 29th in this case, and so this particular bitcoin futures contract expires on September 29th, 2017. Ethereum Classic on the other hand happens to be a seven-day contract, as can easily be seen from the ticker.

Enter the BitMEX Option

BitMEX is easing into the options market with the introduction of a single long and short option, called up and down respectively.  By single, we mean that BitMEX limits their option to one expiration date and one strike price at a time.  There is a designated market maker who establishes these contracts.  At the moment there are zero fees.  We would anticipate a greater roll out as interest grows.

Why StatusCoin?

At times there might be an obscure altcoin on offer. BitMEX noticed the sizable time gap between the initial coin offering and the tokens actually available for traded on exchange markets, not to mention the difficulty of getting into these coin offerings as popularity has soared. The integration of futures markets for these coins – in the interim between ICO and launch – allows bulls to get in on the action if they missed out, bears to short worthless tokens. Good on BitMEX for filling this gap.

Support

Support at BitMEX is very knowledgeable as to their product, and replies to customer concerns quickly and professionally.  Aside from knowing what they are talking about, you can expect the support staff to be polite, courteous, and speak mother-tongue level English.

Mobile

Yes, their platform is nicely optimized for mobile so you can close/open positions in a pinch. But if you are working with this engine, best to use it on your desktop.

BitMEX, a brief history

BitMEX stands for Bitcoin Mercantile Exchange, a name play off of the famous derivative exchange market in Chicago, the Mercantile Exchange. The platform was started by three smart trading professionals, one a derivatives trader, the next an expert in real time web applications, the third a long-time high frequency trading system’s developer for big companies like, according to his bio, JP Morgan and IBM. A shared desire to introduce their two passions, cryptocurrencies and derivatives, the three partners launched BitMEX from offices in Hong Kong.