BitMEX Review & Margin Trading FAQ

Question

What is BitMEX?

Answer 1

BitMex (Bitcoin Mercantile Exchange) is one of the largest cryptocurrency derivatives trading platforms in the world. Its daily volume of BTC exceeds one million dollars and it is currently recognized as the best exchange for futures trading, so it is important to understand that on this platform we do not trade directly with our cryptocurrencies, but with the value they represent through future contracts.

Answer 2

Arthur Hayes is the CEO and co-founder of BitMEX. The crypto exchange platform and mobile applications are owned by a company called HDR Global Trading LTD, a trademark holder.

Answer 3

The company behind BitMEX – the HDR – Global Trading Ltd – is registered on the Seychelles. However, BitMEX’ headquarters are based in Hong Kong in a skyskraper that is said to host the world’s most expensive offices. The exchange also has offices in several other countries around the world.

Answer 4

BitMEX was created in 2014 through a collaboration between Arthur Hayes, Ben Delo and Samuel Reed, who received funding from acquaintances and family members. Notably, in 2018 Ben Delo was the UK’s first youngest Bitcoin billionaire

Answer 5

BitMEX is not regulated or endorsed by any regulatory body. The exchange itself responds only to the laws and regulations of HDR – Global Trading Ltd, who entirely owns it.

Answer 6

Yes, since summer 2020 customers have to verify their identity with respective documents in order to be allowed to use the platform. Verifying all customers is currently in progress and will be finished by 15.02.2021. As of February BitMEX will know all customers by name.

Answer 7

BitMEX cannot be used by residents of the USA, the province of Québec in Canada, Hong Kong, Cuba, the Seychelles, Crimea & Sevastopol, Bermuda, Syria, Iran, Sudan and North Korea. Simply put, any country embargoed by the United States.

Answer 8

Unfortunately, US residents are prohibited from using the BitMEX platform because the CFTC (Commodity Futures Trading Commission) does not authorize the exchange to establish its operations in that country. The authorization of this regulatory body is mandatory so that any exchange can be used within the US.

Answer 9

BitMEX can be used in any country worldwide, with the exception of those mentioned above, which have been banned by the exchange. If you currently reside or live in any other country, you are fully authorized to create an account on BitMEX and enjoy the trading services this platform offers.

Answer 10

Despite the fact that BitMEX offers perpetual contracts for cryptocurrencies like Bitcoin Cash, Ripple, Litcoin, Cardano and more, the platform will calculate profits and losses only in Bitcoin, being the only accepted cryptocurrency for deposits and withdrawals.

Answer 11

For security reasons, BitMEX has not yet revealed the exact number of users its platform hosts. However, data analysts like Skew have reported that BitMEX receives around 22,000 users daily.

Answer 12

BitMEX makes money by charging commissions from trades carried out by users. Let’s also remember that BitMEX offers a high leverage service, which increases transaction costs. Generally, order makers receive 0.025% of each trade.

Answer 13

Being a Bitcoin futures and cryptocurrency derivatives market with up to 100x leverage, BitMEX offers the opportunity to make great profits by trading on its platform and – very important aspect – it was the very first Bitcoin trading platform of this kind. This aspect of the exchange draws the attention of many expert traders who deposit significant funds in the BitMEX wallet, which they hope to multiply with their trades and leverage service. Although in the meantime many competitors have come up with similar margin trading platforms there are still major differences to BitMEX. The latter still offers the most comprehensive and professional trading engine with all the advanced order types traders know from MetaTrader, for instance, which differs BitMEX from competitors.

Answer 14

”XBT” is Bitcoin (BTC), or, more precisely, it is the name of the Bitcoin perpetual contract that is used on the BitMEX futures platform. This contract can be operated with high leverage, even though it tries to replicate the spot market. Remember that the Spot Market is the place where all assets are bought or sold for real and are delivered immediately or in a short period of time ( the underlying asset is being moved, in contrast to derivatives).

Answer 15

In the upper left corner of the web platform, you will find an advertisement that says “Welcome to BitMEX”, which is just above the “Register” option, where you will have to click. There you must enter your data and confirm your registration by email. Registration is super quick as no account verification is required.

Answer 16

BitMEX at the official level cannot be used in the United States. However, if a trader uses a Virtual Private Network (VPN) in order to access the platform with an IP from a country where the use of the platform is allowed, then it is technically possible to take advantage of the trading services offered by the platform. But remember that this action is not legal for US Americans and therefore not recommended at all for US citizens or residents. We assume that it might be legal for foreigners who are on vacation in the US (but not sure about that).

Answer 17

The minimum amount for each BitMEX trade will depend on the initial margin of the product. In the case of XBT/USD you need at least $1 (= 1 contract).

Answer 18

It is the amount of money that we are going to place in a position, in this case it can be our total capital. For example: If I have $1,000 USD as total capital, I can split it in 5 equal parts, that is $200 USD each. On those $1,000 I am going to risk per operation 2% of my total capital ($20 USD). My margin in this case would be $200 and my risk or risk capital will be only $20 USD.

Answer 19

Leverage refers to a “line of credit” provided by the exchange so that its users can operate with more capital than they have. When operating with borrowed funds, price movements will affect to a greater extent the total capital that we have. For example: If we have $70 and use 100x leverage to get 1 XBT and Bitcoin increases from 7,000 to 7,070 (1%) our profit will be 70 USD. If it falls 1%, we will lose our initial 70 USD and the transaction will be closed automatically (Unless Stop Loss prohibits it).

Answer 20

BitMEX offers 1X, 2X, 3X, 5X, 10X, 25X, 50X, 100X leverage options, which will be more tailored to your trades depending on the funds you have and the contract you are using. The higher the leverage, the higher the profit (also the higher the risk).

Answer 21

Cross Margin means that in order to avoid liquidations the entire amount of funds of an account will be used to protect a position. This means that any realized PNL from other open positions will automatically be used to add more margin on a losing position. Realized PNL is the difference between the average entry price and the Exit Price.

Answer 22

US traders aren’t allowed to use BitMEX at all, so they shouldn’t be in the position to ask how to withdraw from the Broker platform. BitMEX prohibits registrations to residents and citizens of the United States.

Answer 23

Although using VPN to trade with BitMEX we must emphasize that the exchange can close your account completely if you should be discovered providing uncertain data. To use BitMEX with a VPN, you must join a reliable service and run the application on the device of your choice. Select a server to connect to (there are servers around the world) and then log in to your BitMEX account.

Answer 24

BitMEX calculates PNL basing on the difference between the average entry price and the price at which a user sells XBTUSD. Realised PNL, as explained above, is based on where you can actually buy or sell your position, which in most cases is not the mark price.

Answer 25

ROE stands for Return On Equity. It is the total% of earnings on our capital, which means that if we have an ROE of 25% leveraged x10, we would be talking about a profit of 250%.

Answer 26

Slippage means the difference between the expected price and the price at which a trade is actually executed. The “Slippage” is usually more visible when the market presents high volatility indices.

Answer 27

Every 8 hours each day there is a funding fee, also called rollover fee, that is exchanged between open long and short positions. Depending on the amount of longs versus shorts one group has to pay the other. So when you hold a position over those specific time stamps you are subject to that fee. If you open and close a position between those specific hours you don’t participate in funding between longs and shorts. Such margin trading rollover fees are common on margin trading platforms, also on traditional ones. It’s a measure that aims to motivate traders not to hold certain positions for too long which kind of regulates market activity to a certain degree in a healthy way.

Answer 28

BitMEX only handles deposits in Bitcoin, so you must obtain a multi-signature address directly from the BitMEX wallet to which you must deposit the appropriate amount for your trading operations. Note that you can only obtain a personal BitMEX BTC wallet after signing up for the exchange. The transaction will be confirmed within an hour and will be added to your account funds.

Answer 29

Once you have obtained a BTC adress from your BitMEX BTC wallet, enter Coinbase and log in. There, go to “Portfolio” and enter the Bitcoin section. Press “send”, specify the amount and paste the BTC address. Confirm the transaction and wait for it to be effective.

Answer 30

Unfortunately, users cannot deposit fiat currency into BitMEX exchange, as the platform only allows deposits in Bitcoin. However, you can buy Bitcoin in other exchange platforms and then send it your personal BTC wallet in BitMEX.

Answer 31

First, you’ll have to log in to your BitMEX account. Click ‘Account’ on the top left-hand part of the page. Then, click the ‘Withdraw’ button. Enter the receiving / destination address and the amount you wish to withdraw. Click the ‘Submit’ button and wait for your tokens to arrive.

Answer 32

Opening a trade in Bitmex is very intuitive, we go to the left of the platform and we will find where to place our trade. With the green BUY/LONG option we can open a purchase operation in which we will win as long as the price goes up, if it goes down we lose. With the red SELL/SHORT option we can open a sell operation, in which we will win when the Bitcoin price goes down, we will lose if it goes up.

Answer 33

You cannot buy Bitcoin as such on BitMEX. Users trade through perpetual contracts that, depending on the price movement, will leave profits or losses (both calculated in BTC) and, when making a deposit and/or withdrawal, it will be executed only in Bitcoin.

Answer 34

Bitcoin Contracts are transactions that use Bitcoin’s decentralized network to agree from all sides. The concept of futures contracts is realized when the buyer/seller buys or sells an asset at a predetermined future date and price. In addition to the regular futures contracts that traders will be able to access on BitMEX, they can also manage their operations with perpetual contracts. The surprising thing about perpetual contracts is that an operator sets a price for a future date but without the expiration of regular futures contracts, which can stretch positions and increase profits.

Answer 35

Each contract is worth 1 USD.

Answer 36

Assuming that a trader goes long 100 XBT of XBTUSD at a price of 600 USD. He is long (or buys) 100 XBT x 600 USD that equal to 60,000 contracts. A few days later the price of the contract increases to 700 USD. The trader’s profit will be: 60,000 x 1 x (1/600 – 1/700) = 14,286 XBT.

Answer 37

Going “long” means buying contracts, other than selling them. Entering long is the appropriate option when our analysis tells us that an asset (or in this case, a contract) will increase in price and leave us benefits. Selling contracts or entering “Short” is for when we deduce that the price will fall and we can take advantage of the fall to obtain profits in the same way.

Answer 38

To scalp in BitMEX we must operate in short time periods, for example: 1 minute timeframe. This strategy consists of obtaining benefits by combining leverage with minimal market movements, which means excellent returns in short periods of time.

Answer 39

A liquidation on BitMEX occurs when the market moves adversely against the position you’re trading at (a bullish or bearish position) and breaks the settlement price, which is a predetermined limit. When this occurs, the settlement system closes the long/short position automatically.

Answer 40

Let’s say a trader goes long 1 contract at $ 100.00, with a liquidation price of $ 99.50 and a bankruptcy price of $ 99.00. The user is liquidated and the trading engine places a limit sell order with a limit price of $ 99.00 (the bankruptcy price). The liquidation order is filled at $ 99.25. The Insurance Fund now has $ 0.25.

Answer 41

After the margin call, BitMEX will liquidate your positions when your out of margin to hold your position. When leveraged up to 50x, and adverse 2% price movement could burn your account.

Answer 42

Getting “Rekt” means that a trader will lose the margin to cover his position in the contract and therefore will be liquidated. In other words, you will lose a large part of your funds. Since these losses occur in leveraged trades, the losses are usually as large as the profits would have been, leaving your account at 0. Every trading account on BitMEX is subject to a predefined risk limit in order to minimize the overall risk of too many larger liquidations on leveraged position. When there are many large positions with leverage at the same time, this situation means an enhanced risk for other traders for deleveraging of their positions in case the large positions couldn’t fully get liquidated.

Answer 43

Orders can be closed manually or by the exchange itself upon reaching the liquidation price. If you suspect that the price will make a movement contrary to your analysis, you can search for your order on the platform and cancel it by clicking on “Cancel order”. If you reach the liquidation price, the exchange will automatically close your order, although it generally makes a margin call to let you know that you are about to be liquidated.

Answer 44

Trading futures is easy if we have a good market analysis, since basically we talk about acquiring “X” quantity of futures at a price to later sell them once their value has increased, or sell them if their price is about to fall to collect benefits and buy them back at a cheaper price. The tricky thing about trading Bitcoin futures is getting familiar with the items and all the rules that we have to respect in each order.

Answer 45

Since March, exchange companies like BitMEX and Bitfinex have lost a part of their Bitcoin reserves. BitMEX’s BTC supply has dropped to 216.0K BTC, below the peak of 315.7K on March 13. For this reason, the exchange was in charge of increasing its reserves in USDT and buying large amounts of BTC until now to try to replenish itself.

Answer 46

BitMEX allows trading with futures from EOS, Ethereum, Litecoin, Cardano, Bitcoin Cash, Tron, Ripple and of course, Bitcoin.

Answer 47

The volume in BitMEX indicates how much a cryptocurrency derivative was traded. If there is a high volume index for a sustained period of time, the price of the contracts will probably increase. If the volume decreases it means that the negotiations have fallen and the prices will begin to decrease.

Answer 48

In the “Place order” window, a series of options with different order types will be displayed. Click on “Stop Limit”, also known as “Stop Loss”, where you must set a limit price in case the market goes against you and the order is automatically canceled before burning your account. Click “Set buy stop” or “Set sell stop” depending on if you’re setting a stop for a long or short position.

Answer 49

A Trailing Stop is a variation of Stop Loss orders. Its main function is to protect part of the accumulated benefits in a winning operation. It is also called Drag Stop, since it will only move in the direction of the operation, dragging the accumulated benefits.

Answer 50

Withdrawals are manually processed once a day, which means you must submit your withdrawal request by 13:00 UTC in order for it to be included in the withdrawal request batch for that day. This method can be time consuming compared to automated withdrawal systems, but BitMEX takes security of withdrawal very seriously and the processes require manual verification and validation.

Answer 51

BitMEX has no withdrawal limits, so under normal conditions, a user can withdraw the desired amount without further obstacles, as long as they have said funds in their wallet.

Answer 52

Leverage will depend directly on your own funds and the risk management you manage, which will serve as the basis for said leverage. In other words, if you have 0.1 BTC, a 10x leverage is adequate because it allows you to take full advantage of each movement, since it is known that Bitcoin can fluctuate $100 in a matter of minutes. If you have low capital, you can opt up to 100x to increase the chances of making significant profits.

Answer 53

It’s possible. Although, assuming that you change from 50x to 100x you will earn the same thing basically. That’s because your ROE (Return on Equity) will increase but your amount put in the position will be decreased by half.

Answer 54

Futures contracts expire because the contract will eventually reach the price and date for which is was traded for. BitMex futures contracts can expire in March, June, September, and December. The futures months codes for those months are H, M, U, and Z. Contrary to future contracts, there is no expiry date for such perpetual contracts, so they don’t have settlement. When trading Perpetual Contracts users have to know that there is a position Funding Rate for leveraged longs and short that occurs 3 times a day – every eight hours. Traders holding a leveraged position over those particular timestamps either receive or pay this funding fee, depending on if they are long or short. Who gets paid and who has to pay depends on how many shorts and longs there have been during the respective period, so this can vary. The current rate is always stated on BitMEX.

Answer 55

On the left side of the web platform for BitMEX there is a column, which has trading options, order types and leverage. When opening a position, the trader must specify whether and how much he will use leverage.

Answer 56

No. When you use leverage and start losing, the order will be closed the moment your own capital runs out. Thus, the exchange collects the loan and your position is liquidated. You will never be indebted to BitMEX.

Answer 57

To open different positions in BitMEX, you must have multiple accounts active within the exchange, which is allowed. In that case, you will be able to open one position in long and another in short, a strategy commonly used to cover losses and determine trends.

Answer 58

First, you must determine a risk management. Make sure to setup stop loss on each position to avoid bigger losses. Reduce losses that exceed 50% of your capital and do not abuse leverage. Following these guidelines will ensure that even if some trades close, your account will not get burned.

Answer 59

The gains you will get from leverage are derived from the capital that the exchange lends you and not from the equity of your own funds. For example, if you have $10 and you leverage x100, you have $1000. If you earn 10% of said operation, you would be obtaining $100. Your personal balance would no longer be $10, but $110.

Answer 60

To close an order that is about to go into loss, you will need to create an adverse order. That is, an order in a position contrary to the previous one. In the Positions widget, you will see all contracts and if they were long or short, the column currentQty displays this information. If you would like to close a specific position, you must buy or sell the same amount of contracts shown in the current Qty column. You would then proceed to the Order Controls widget to place your order.

Answer 61

Traders just have to close out however much of they want. If you are long 500 contracts and want to close out half of it, then sell 250 contracts. The same with multiple position opening of the same token.

Answer 62

BitMEX sets the price of Bitcoin according to the supply and demand that it has in the market, like other crypto exchanges. Unlike direct P2P platforms like LocalBitcoins, exchange companies must set a fixed Bitcoin price through which traders will trade. This price will increase or decrease depending on the volume of the market.

Answer 63

The green means a long order and the orange means a short order. They set up this colors because traders often associate green with “bull trends” and orange with “bearish trends”.

Answer 64

Perpetual contracts may trade at a significant premium or discount to the Mark Price. In such situations, a Premium Index will be used to raise or lower the next Funding Rate to levels consistent with where the contract is trading.

Answer 65

A Maker rebate is given to the trader when he has a negative Maker fee. Funding rates change based on market lending rates. In the case of Bitcoin Perpetual Contracts, the maker fee is -0.0250% multiplied with the applied leverage. For 100x leverage it would be -2.5%.

Answer 66

Funding occurs every 8 hours at 04:00 UTC, 12:00 UTC and 20:00 UTC. You will only pay or receive funding if you hold a position at one of these times. If you close your position prior to the funding exchange then you will not pay or receive funding. The funding you pay or receive is calculated as: Funding = Position Value * Funding Rate (also known as BitMEX settlement fee). Your position value is irrespective of leverage. For example, if you hold 100 XBTUSD contracts, funding is charged / received on the notional value of those contracts, and is not based on how much margin you have been assigned to the position.

Answer 67

BitMEX charges users with 0.075% for every market sell. With 10% discount rebate 0.0675%. This is more expensive option to open or close your trades. Traders often call this order a taker order.

Answer 68

The volume is readable on the BitMEX charts. Where there is more volume, it means that there was more trading. Where there is more trading, the price is more likely to move up. Volume is a key indicator for determining trends in the market.

Answer 69

BitMEX is knwon to use an Insurance Fund to avoid Auto-Deleveraging in traders’ positions. Surpluses from liquidations that could be executed at a USD price better than the respective bankrupcy price of such a forcably closed position is used for the The BitMEX Insurance Fund.

Answer 70

First you’ll have to click the button “Account” in the title bar. In your account you find a side bar menu with “Trade History”. In your Trade History you’ll find all your past trades listed. There you’ll find a button on the top right of the page to “Save as CSV” which you have to click. You’ll end up downloading a CSV file with your trading history.

Answer 71

Log into Bitmex.com, navigate to API and click API key management. Click on create API key. A page similar to below should show up. Do make sure you have set the Key Permissions to ‘Order’ only. Once the key is generated copy and past the key. Verify the key and it will be set!

Answer 72

Trading View has a section of markets in which BitMEX is available. There, users will be able to see the BitMEX charts on the Trading View platform.

Answer 73

For the moment, BitMEX only has an Android mobile app available, which can be downloaded through Play Store. If you’re an iOS user, you can log into your account from your browser.

Answer 74

BitMEX is currently one of the biggest Bitcoin exchange companies and moves millions of dollars in BTC within its platform on a daily basis. Whatever happens inside the BitMEX market, it can affect positively or negatively on Bitcoin’s price, as long as it’s big enough for the whole community. Most likely, the markets influence each other. The price movements on BitMEX as the largest BTC-based derivatives broker will influence spot markets such as BitStamp, Kraken or Coinbase, just as the price movements of the spot markets will in turn encourage BitMEX derivatives traders to make long or short trades.

Answer 75

BitMEX is compatible with several crypto trading bots such as 3commas, Cornix, Zignaly and Cryptohopper. This bots will help amateur traders to earn benefits from the crypto market though automated trading.

Answer 76

Log in your email account and send a mail to support@bitmex.com explaining that you wish to delete your BitMEX account and the support team will do it for you. You do not need to explain why but it might be fitting to explain your reasons.

BitMEX Review & Margin Trading FAQ

Facts & Data about BitMEX:

Bitmex Discounts & Coupons:

Bitmex Trading Fees in detail:

Deposit & Withdrawal fees:

Minimum Deposit / Withdrawal Amount:

Supported FIAT Currencies:

Supported Order Type:

Supported Trading Pairs for Margin Trading:

Leverage per Coin:

Bitmex Futures

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Bitmex is banned in:

Bitmex Discussions on Reddit and others:

Bitmex Mobile App?

Bitmex How-To´s and Guides:

Frequently asked Questions about Leverage Trading on BitMEX.com

What is BitMEX?

Who owns BitMEX?

Where is BitMEX located?

When was BitMEX founded?

Who regulates BitMEX?

Does BitMEX have a KYC policy?

Where is BitMEX banned?

Why is BitMEX banned in the USA?

What countries does BitMEX allow?

What can you trade with BitMEX?

How many users does BitMEX have?

How does BitMEX make money?

Why is BitMEX so big?

What is XBT on BitMEX?

How to sign up to BitMEX?

How do you use BitMEX in the USA?

How much do I need to start trading crypto derivatives on BitMEX?

What is Margin on BitMEX?

How does leverage work on BitMEX?

How to calculate returns on leverage on BitMEX?

What leverage rates are available on BitMEX?

What is cross margin on BitMEX?

How to withdraw from BitMEX in the USA?

How to use BitMEX with VPN?

How does BitMEX calculate PNL?

What is Roe on BitMEX?

What is slippage on BitMEX?

How does BitMEX funding work?

How to deposit BTC?

How to send Bitcoin from Coinbase to BitMEX?

How to deposit USD to BitMEX?

How to cash out on BitMEX?

How to trade on BitMEX?

How to buy Bitcoin on BitMEX?

What is a contract on BitMEX?

What is one Bitcoin contract on BitMEX worth?

How to make profits with BitMEX perpetual swap?

What does going long on BitMEX mean?

How to scalp on BitMEX?

What is BitMEX liquidation?

How to read BitMEX liquidation?

How fast does 50x BitMEX leverage get liquidated?

What do you lose when you get rekt? / what is risk limit on BitMEX?

How do BitMEX orders close?

How to trade futures on BitMEX?

Why is BitMEX buying BTC?

How many coins are on Bitmex, which coins does Bitmex offer for trading?

What happens when BitMEX volume drops?

How to set stop loss on BitMEX?

What is trailing stop?

How often does BitMEX approve withdrawals?

Is there a Withdraw Limit on BitMEX?

What leverage should you use on BitMEX?

Can you change leverage while in a position on BitMEX?

How long can you hold a position on BitMEX?

How to use leverage?

When you use leverage on BitMEX can you lose more than your investment?

How to open a second BitMEX trade?

How to add a position without getting liquidated?

What is the benefit on leverage if the return is on equity?

How to close your BitMEX positions?

How to close half your BitMEX position?

Where does BitMEX gets its btc price?