- BitMEX is a Peer-to-Peer Trading Platform that offers leveraged contracts that are bought and sold in Bitcoin.
- BitMEXonlyhandles Bitcoin. All profit and loss is in Bitcoin, even if you’re buying and selling altcoin contracts. BitMEX does not handle fiat currency.
- BitMEX allows trading with a high amount of leverage.
There are 5 main navigation Tabs of BitMEX:
- Trade:The trading dashboard of BitMEX. Here you can select the instrument you wish to trade, select leverage, place and cancel orders, view important information in the contract details and see your position information.
- Account:This tab displays all your account information such as current Bitcoin Available Margin Balances, Deposit and Withdrawal information, Trade History and Affiliate information.
- Contracts:This is an important tab for information related to the instruments such as the Funding History, minimum contract sizes, leverage offered, expiry, Funding, underlying reference Price Index data, Settlement History and a few other pages relevant for a trader.
- References:This is the education corner of BitMEX. Here you can learn about Futures, Perpetual Contracts, how positions are Marked, when and how Liquidation occurs, BitMEX Fees, Support and other informative material to help you understand the Exchange.
- API:Here you will be able to find out information pertaining to developing and maintaining an API connection with BitMEX. We offer a fully featured REST API and a powerful streaming WebSocket API.
- The first step is to read through theReferences Taband go through the terms and pages on the left. The Exchange Guide is also a good introduction to placing orders and PNL calculation.
We recommend the following should be read through in detail:
- Perpetual Contracts Guide:XBTUSD is our most popular product and is a Perpetual Contract. We encourage all new users to read over the Perpetual Contracts Guide to understand key concepts such as the mechanics of Perpetual Contracts markets and funding.
- Futures Guide:Some of our other products are in the form of a Futures Contract. This guide will help explain the mechanics of futures markets such as basis.
- Auto Deleveraging:This page is important as it determines what happens to an opposite trader’s position if another trader’s position cannot be liquidated in the current market.
- Fair Price Marking:This page explains how your positions are marked and is important for all users, especially if you are using leverage as this determines your liquidation prices.
- Liquidation:This page explains how a position is liquidated and all traders should understand this page.
- Risk Limits:This page describes how much leverage can you use at particular position sizes.
- Trading on BitMEX may be a new experience for some users given the products offered and product types. To see the main differences between BitMEX and other competitors please clickhere.
- Traders should be aware of theMargin Terminologyused on BitMEX.
- For the type of orders you can place on BitMEX please see ourOrder Type FAQ.
- BitMEX offersPerpetual ContractsandFutures.
- As opposed to futures, perpetual contracts do not have an expiry date and thus do not have a settlement.
- Perpetual Contracts have aFunding Ratethat occurs every 8 hours. Users who hold a position over the funding timestamp either pay or receive funding.
- When a futures contract settles, all users who hold a position are settled at the contract’s settlement price.
- You can go long or short on these contracts by simply buying or selling them. You can sell even if you don’t hold any contracts, making BitMEX a valuable tool for “naked” shorting purposes.
- BitMEX offers up to 100x leverage on some of its products. This means that you can buy as much as 100 Bitcoin of contracts with only 1 Bitcoin to back it. But be careful – with high leverage comes accelerated profit, but also the potential foraccelerated loss.
- BitMEX employsAuto Deleveragingwhich means that in some rare cases, leveraged positions in profit may be reduced during certain time periods if a liquidated order cannot be executed in the market.
- We encourage new users who are unfamiliar with trading to practice placing, executing and cancelling orders of various order types and sizes on our sandbox testing exchange,testnet.BitMEX.com. You can sign up with a new account, deposit some testnet Bitcoin and interact with a test market that looks and feels exactly like the real thing.
- Take a look over theFAQfor more basic information.
- If you need more help, come back here to check the references or contact us directly via the chatbox below right. Someone from BitMEX is almost always online, and if not, there are many helpful users.
BitMEX is a trading platform that offers investors access to the global financial markets using only Bitcoin. BitMEX is built by finance professionals with over 40 years of combined experience and offers a comprehensiveAPIand supporting tools.
APerpetual Contractis a product similar to a traditional Futures Contract in how it trades, but does not have an expiry, so you can hold a position for as long as you like. Perpetual Contracts trade like spot, tracking the underlying Index Price closely. It achieves this via the mechanics of aFunding component.
AFutures Contractis an agreement to buy or sell a commodity, currency or other instrument at a predetermined price at a specified time in the future.
BitMEX offers perpetual contracts and many different fixed-date expiries.
BitMEX marks contracts according to theFair Price Marking Method. This price determines your Unrealised PNL. Realised PNL will be determined according to your entry price and your exit or Settlement Price and any fees incurred.
The Settlement Price is the price at which a Futures contract settles. To avoid price manipulation, BitMEX employs an averaging over a period of time prior to settlement and this time frame may vary from instrument to instrument. This methodology is also used in the formula for calculation of the Settlement Price for a BitMEX UP contract. Please reference each contracts’ specification that you wish to trade.
In the Trade tab, on the “Place Order” section you can specify the quantity, price and direction.
A Bid is a standing order where the trader wishes to buy a contract at a specified price and quantity. An Ask is a standing order where the trader wishes to sell a contract at a specified price and quantity.
BitMEX has an anchor market maker who continuously quotes large sizes on contracts that BitMEX offers. No special privileges are given to any of the market makers.
Yes, BitMEX offers leverage on all of its products except UP contracts which have form of inbuilt leverage already.
The amount of leverage BitMEX offers varies from product to product. Leverage is determined by theInitial Margin and Maintenance Marginlevels. These levels specify the minimum equity you must hold in your account to enter and maintain positions. Leverage is not a fixed multiplier but rather a minimum equity requirement. You can see the minimum Initial Margin and Maintenance Margin levels for all productshere.
Initial Marginis the minimum amount of Bitcoin you must deposit to open a position.
Maintenance Marginis the minimum amount of Bitcoin you must hold to keep a position open. If your margin balance on BitMEX drops below this level your position will be taken over by the Liquidation Engine and beLiquidated.
When the Mark Price of a contract falls below your liquidation price for longs, or rises above your liquidation price for shorts, your Maintenance Margin level has been breached and the Liquidation Engine takes over your position. In yourTrade History, the price the liquidated position was closed at is the Bankruptcy Price (equivalent to where your Maintenance Margin is equal to 0).
Upon liquidation, the Liquidation Engine attempts to close the position at the prevailing market price. If it is unable to do so thenAuto-Deleveragingwill occur.
No. We have a sophisticated margin and liquidation process that is designed to prevent any trader’s margin balance on BitMEX from ever going below 0.
No. BitMEX employs anAuto-Deleveraging Systemthat does not need to socialise losses.
Auto-Deleveragingoccurs when a liquidation remains unfilled in the market. Traders who hold opposing positions will be closed out according to leverage and profit priority.
No, BitMEX does not charge fees on deposits.
No, BitMEX does not charge fees on withdrawals. When withdrawing Bitcoin, the minimum Bitcoin Network fee is set dynamically based on blockchain load and can be viewed on theWithdrawal Page.
Yes, BitMEX charges a trading fee on every completed trade. Please view theFeespage for more information.
Under the Account tab, click on theDepositlink where you will be provided a multi-signature address to deposit Bitcoin. After 1 confirmation, funds will be credited to your account.
The minimum amount to trade on BitMEX varies from product to product depending on the Initial Margin. ForXBTUSD(for example) it is $1 USD * 1% (Initial Margin) = $0.01. At a XBT/USD price of $600 this equals 0.00001667 XBT.
No, BitMEX stores all Bitcoin in acold multi-signature wallet. See ourSecurity Pagefor more information.
It is a Bitcoin wallet, storedofflinethat requires m of n signatures in order to spend any funds. In the case of BitMEX, it requires 2 of 3 partners to sign any transaction before funds may be spent.
This is one of many theft prevention methods that BitMEX employs to ensure customer funds are kept secured.
The cutoff time for Bitcoin withdrawals is 13:00 UTC. Shortly after that, Bitcoin will be sent to the address you specified.
Pleaseemail supportand a member of staff will contact you shortly.
|Series||Leverage||Maker Fee||Taker Fee||Long Funding||Short Funding||Funding Interval|
|Bitcoin (XBT)||100x||-0.0250%||0.0750%||0.0100%||-0.0100%||every 8 hours|
A negative fee means that the trader will receive a rebate. Funding rates change based on market lending rates. See below for details.
|Series||Leverage||Maker Fee||Taker Fee||Settlement Fee|
|Bitcoin Cash (BCH)||20x||-0.0500%||0.2500%||0.0000%|
At the time of settlement any open position in contracts will attract the settlement fee.
|Series||Leverage||Maker Fee||Taker Fee||Settlement Fee|
On our Perpetual Contracts, such as
XBTUSD, funding isexchanged between longs and shortsover discrete Funding Intervals. In yourTrade Historya positive amount means you paid funding for that Funding Interval; a negative amount means you received funding. BitMEX does not charge any fees on funding paid or received.
Please refer to thePerpetual Contracts Guidefor more information on Funding.
BitMEXdoes notcharge fees on deposits or withdrawals. When withdrawing Bitcoin, the minimum Bitcoin Network fee is set dynamically based on blockchain load.
A Hidden order always pays the taker fee. An Iceberg order pays the taker fee until the hidden quantity is completely executed, then it becomes a normal order and they will receive the maker fee for the non-hidden quantity.
Any questions? Please email@example.com.
AFutures Contractis a derivative product and is an agreement to buy or sell a commodity, currency or other instrument at a predetermined price at a specified time in the future. They are either physically settled or cash settled. BitMEX offers several of its trading products in the form of a Futures Contract with cash settlement.
Futures contracts do not require traders to post 100% of collateral as margin, because of this you can trade with leverage of up to 100x on some of BitMEX contracts. All margin on BitMEX is denominated in Bitcoin, allowing traders to speculate on the future value of its products only using Bitcoin.
The other derivative product BitMEX offers is thePerpetual Contract. To see futures contract information specific to each instrument, click on theContractstab at the top.
When trading futures contracts, a trader needs to be aware of several mechanics of the futures market. The key components a trader needs to be aware of are:
- Multiplier: How much is one contract worth? You can see this information under the Contract Specifications for each instrument.
- Position Marking: Futures contracts are marked according to theFair Price Markingmethod. The mark price determinesUnrealised PNLandliquidations.
- Initial and Maintenance Margin: These key margin levels determine how much leverage one can trade with and at what point liquidation occurs.
- Settlement: How and when the futures contract expires, or settles, is important for traders to understand. BitMEX employs an averaging over a period of time prior to settlement to avoid price manipulation. This time frame may vary from instrument to instrument and traders should read the individual contract specifications to see when is expiry and the individual settlement procedure.
- Basis: The basis refers to what premium or discount the futures contract trades at when compared to the underlying spot price and is usually quoted as an annualised %. Basis exists since futures contracts expire in the future and there is either a positive or negative time value element attached to that expiry uncertainty.
APerpetual Contractis a derivative product that is similar to a traditionalFutures Contract, but has a few differing specifications:
- There is no expiry or settlement.
- Perpetual Contracts mimic a margin-based spot market and hence trade close to the underlying reference Index Price.
When trading perpetual contracts, a trader needs to be aware of several mechanics of the market. The key components a trader needs to be aware of are:
- Position Marking: Perpetual Contracts are marked according to theFair Price Markingmethod. The Mark Price determinesUnrealised PNLandliquidation prices.
- Initial and Maintenance Margin: These key margin levels determine how much leverage one can trade with and at what point liquidation occurs.
- Funding: Periodic payments exchanged between the buyer and seller every 8 hours. If the rate is positive, thenlongs will payandshorts will receivethe rate, and vice versa if the rate is negative.
- You will only pay or receive funding if you hold a position at the Funding Timestamp.
- Funding Timestamps: 04:00 UTC, 12:00 UTC and 20:00 UTC.
Traders can observe the current funding rate for a contract on the bottom left hand side of the Trade tab under “Contract Details”. Similarly one can view this rate in the individual “Contract Specifications”. Historical rates are in theFunding History.
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
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 assigned to the position.
Funding Rateis positive, longs pay shorts. When it is negative, shorts pay longs.See examples.
The Funding Rate is comprised of two main parts: theInterest Rateand thePremium / Discount. This rate aims to keep the traded price of the perpetual contract in line with the underlying reference price. In this way, the contract mimics how margin-trading markets work as buyers and sellers of the contract exchange interest payments periodically.
Every contract traded on BitMEX consists of two instruments: a Base currency and a Quote currency. For example, on XBTUSD, the Base currency is XBT while the quote currency is USD. The Interest Rate is a function of interest rates between these two currencies:
Interest Rate (I) = (Interest Quote Index - Interest Base Index) / Funding Interval where Interest Base Index = The Interest Rate for borrowing the Base currency Interest Quote Index = The Interest Rate for borrowing the Quote currency Funding Interval = 3 (Since funding occurs every 8 hours)
Note: Under each Contract Specification page, the source borrow market is stated for each Interest Index.
The perpetual contract may trade at a significant premium or discount to the Mark Price. In those situations, a Premium Index will be used to raise or lower the next Funding Rate to levels consistent with where the contract is trading. Each contract’s Premium Index is available on the specific instrument’s Contract Specifications page and is calculated as follows:
Premium Index (P) = (Max(0, Impact Bid Price - Mark Price) - Max(0, Mark Price - Impact Ask Price)) / Spot Price + Fair Basis used in Mark Price
To learn more about the Impact Bid Price and Impact Ask Price, please readFair Price Marking.
BitMEX calculates thePremium Index
(I)every minute and then performs a 8-Hour Time-Weighted-Average-Price (TWAP) over the series of minute rates.
The Funding Rate is next calculated with the 8-Hour Interest Rate Component and the 8-Hour Premium / Discount Component. A +/-0.05% dampener is added.
Funding Rate (F) = Premium Index (P) + clamp(Interest Rate (I) - Premium Index (P), 0.05%, -0.05%)
Hence, if (I – P) is within +/-0.05% then F = P + (I – P) = I. In other words, the Funding Rate will equal the Interest Rate.
This calculated Funding Rate is then applied to a trader’s XBT Position Value to determine the Funding Amount to be paid or received at the Funding Timestamp.
BitMEX imposes caps on the Funding Rate to ensure the maximum leverage can still be utilized. To do this, two caps are imposed:
- The absolute Funding Rate is capped at 75% of theInitial Margin – Maintenance Margin. If the Initial Margin is 1% and the Maintenance Margin is 0.5%, the maximum Funding Rate will be 75% * (1% – 0.5%)= 0.375%.
- The Funding Rate may not change by more than 75% of the Maintenance Margin between Funding Intervals.
BitMEX does not charge any fees on funding; it is exchanged directly peer-to-peer.
When a trader’s position is liquidated, the position is taken over by the BitMEX liquidation engine. If the liquidation cannot be filled by the time the mark price reaches the bankruptcy price, the ADL system automatically deleverages opposing traders’ positions by profit and leverage priority.
The price at which a traders’ positions are closed out is the bankruptcy price of the initial liquidated order.
At all times, your position in the queue is shown by an indicator. This indicator represents your priority in the queue in 20% increments:
In the above example, all “lights” are lit, which would mean your position is in the top percentile. In the case of a liquidation that is not able to be caught in the market, you may be deleveraged.
TheInsurance Fundis used to prevent ADL. If it is depleted for a given contract, ADL will occur.
If you are deleveraged, you will be sent a notification. Open orders will remain open and you are free to re-enter.
Deleveraging priority is calculated by profit and leverage. More profitable and higher leveraged traders are deleveraged first.
The ranking calculation is as follows:
Ranking = PNL Percentage * Effective Leverage (if PNL percentage > 0) = PNL Percentage / Effective Leverage (if PNL percentage < 0) where Effective Leverage = abs(Mark Value) / (Mark Value - Bankrupt Value) PNL percentage = (Mark Value - Avg Entry Value) / abs(Avg Entry Value) Mark Value = Position Value at Mark Price Bankrupt Value = Position Value at Bankruptcy Price Avg Entry Value = Position Value at Average Entry Price
The system splits these positions by longs and shorts and ranks the positions from highest to lowest.
- You may place buy and sellorders of various typesin the Place Order tab of the Trading Dashboard.
- When a trader places a buy or sell order, before they are allowed to submit the order the system will check that they have enoughAvailable Balanceto reserve theInitial Margin. If the trader has an existing position in that instrument, it will also check that they have enough available balance to cover the change inMaintenance Marginand PNL, should the position be priced at the order price. If they have enough funds then they are allowed to place the order. Note: Net open orders that have not been filled or canceled will reduce the available balance by the initial margin of those net orders.
- Before you are able to trade you first must deposit Bitcoin to fund your margin account. All margin and PNL are denominated in Bitcoin on BitMEX. You should first review the terminology behind theMargin Terms.
- The following are important rules regarding Initial Margin (IM):
- For Buy orders the Initial Margin required = (IM * Contracts * Limit Bid Price * Multiplier). Commission is reserved using the limit bid price; however, the actual commission paid will be calculated based on the final execution price.
- For Sell orders the Initial Margin required = (IM * Contracts * Max (Limit Offer Price, Best Bid) * Multiplier). Commission is reserved using the limit offer price or the best bid for that contract, whichever is higher. The actual commission paid will be calculated based on the final execution price.
- Traders are not charged Initial Margin if their order will reduce their position size.
- If a trader has both Bids and Offers in the market, initial margin will only be charged on the Net amount of Bids (Bid orders – Sell orders). The Sell orders will still be charged initial margin unless they reduce the current position size. For example, if a trader bids 20 contracts for $100 and offers 15 contracts for $150, he will only be charged initial margin on his net bids of 5 contracts (20 – 15) and on his offers of 15 contracts.
- If a contract usesFair Price Markinginitial margin will be calculated differently. If a buy order is placed above the mark price, or if a sell order is placed below the mark price then the trader must fully fund the difference between the order price and the mark price. For example, if the mark price is $100 and the trader submits a bid order for 10 contracts at $110, then the initial margin required = (IM * 10 contracts * $110 * Multiplier) + (100% * 10 contracts * ($110 – $100) * Multiplier).
- Maintenance Margin (MM) calculated based on the Mark Price of that contract.
- For all positions the Maintenance Margin required = (MM * Contracts * Mark Price * Multiplier). The amount of commission applicable to close out all your positions will also be added onto your maintenance margin requirement. This is the minimum amount of margin you must maintain to avoidliquidationon your position .
BitMEX reserves the right to change any margin policies. BitMEX will notify traders of any change via email announcements.
- Perpetual contracts on BitMEX are subject toFunding. Examples of Funding Calculations are found under each perpetual Contract Specification.Funding Historyis also available on all perpetual contracts.
- Perpetual contracts do not settle, and therefore do not incur a settlement fee.
- At the Settlement of a contract, the position will close out at the Settlement Price.
- Once a contract has expired, the lifetime profit and loss of that contract will be added to the traders Bitcoin balance. This contract will no longer appear on the Positions section.
- All calculations done by BitMEX are final.
- In the event that an exchange that contributes to the Index Price experiences an outage, BitMEX may declare an MDE and will inform traders how the settlement or expiry date of affected contracts will be altered.
- Traders will be notified via an email announcement and the declaration of an MDE will be predominently displayed on the trading dashboard.
- The declaration of a MDE is at the full discretion of BitMEX, and all decisions are final.
BitMEX employs a unique system called
Fair Price Markingto avoid unnecessary liquidations in its highly leveraged products. Without this system, unnecessary liquidations may occur if the market is being manipulated, is illiquid, or the Mark Price swings unnecessarily relative to its Index Price. The system is able to achieve this by setting the Mark Price of the contract to the
Fair Priceinstead of the
For Perpetual Contracts, the Fair Price is equal to the underlying Index Price plus a decaying Funding basis rate.
For Futures Contracts, the Fair Price is equal to the underlying Index Price plus an annualised Fair Value basis rate, known as the
% Fair Basis.
AllADLcontracts are subject to Fair Price Marking. Also note that Fair Price Marking only affects the Liquidation Price and Unrealised PNL, it does not affect Realised PNL.
Note: This means that you may see a positive or negative Unrealised PNL immediately after an order executes. This happens when the Fair Price is slightly different from the Last Price. This is normal and does not mean you have lost money, but be sure to keep an eye on your Liquidation Price to avoid a premature liquidation.
The Fair Price for a Perpetual Contract is calculated using only the Funding Basis rate:
Funding Basis = Funding Rate * (Time Until Funding / Funding Interval) Fair Price = Index Price * (1 + Funding Basis)
For further information on perpetual contract funding calculations and examples please see theFunding Sectionin the Perpetual Contracts Guide.
The Fair Price marking calculation for Futures Contracts is slightly different to a Perpetual Contract, and is done by comparing the Impact Mid Price of a contract to its underlying Index Price. This is used to then calculate the
% Fair Basiswhich is then used in the derivation of the Fair Price.
Impact Mid Price = Average (Impact Bid Price, Impact Ask Price) where; Impact Bid Price = The average fill price to execute the Impact Margin Notional on the Bid side Impact Ask Price = The average fill price to execute the Impact Margin Notional on the Ask side
Impact Margin Notionalis the notional available to trade with 0.1 XBT worth of margin (i.e. 0.1 XBT / Initial Margin) and is used to determine how deep in the order book to measure either the Impact Bid or Ask Price.
|Contract||Initial Margin||Impact Margin Notional|
|XBT Quarterly||1%||0.1 XBT / 0.01 = 10 XBT|
|XBJ Quarterly||4%||0.1 XBT / 0.04 = 2.5 XBT|
|ETC Weekly||10%||0.1 XBT / 0.10 = 1 XBT|
Once BitMEX has calculated the Impact Mid Price, it can use this number to calculate the
% Fair Basis. The % Fair Basis will then be used to calculate the
Fair Valueof the futures contract which is added to the Index Price to finally create the
Fair Pricewhich is used for marking purposes.
% Fair Basis = (Impact Mid Price / Index Price - 1) / (Time To Expiry / 365) Fair Value = Index Price * % Fair Basis * (Time to Expiry / 365) Fair Price = Index Price + Fair Value
Impact Mid Price = $105 Underlying Index = $100 Time To Expiry = 30 Days % Fair Basis = ($105 / $100 - 1) / (30 / 365) = 60.8% Fair Value = $100 * 60.8% * (30/365) = $5 Fair Price = $100 + $5 = $105
Note on Calculation: The % Fair Basis is updated each minute but only if the difference between the Impact Ask Price and Impact Bid Price is less than the maintenance margin of the futures contract. After it has been updated the Fair Price will be equal to the Impact Mid Price, and then the Fair Price will float with regard to the Index Price and the time-to-expiry decay on the contract until the next update.
Occasionally, due to index instability, a contract may need to be moved to an alternative mode,
LastPriceProtected. Historically this has happened on theXBJ contracts due to pricing anomalies.
In the case of such anomalies, notice will be sent as the marking method is changed.
Last Price Protectedis a marking mode that functions similarly to simple Last Price marking, but with some protections for our users as not to cause unnecessary liquidations.
A price band is created equal to 1 maintenance margin (0.5x each way) around the previously-calculated Mark Price (also known as the Fair Price, calculated above).
The Mark Price is equal to the Last Price, but only within this band created by the Fair Price. If the band moves, the Mark Price will stay. It is allowed to move toward the band but not away from it.
For API consumers, this field has existed since summer on all instruments and is called
In the derivatives space, margin refers to the amount needed to enter into a leveraged position.Initial and Maintenance Marginrefer to the minimum initial amount needed to enter a position and the minimum amount needed to keep that position from getting liquidated. As various users have varying trading strategies, BitMEX has employed two different methods of margining:
- Cross Margin: Margin is shared between open positions. When needed, a position will draw more margin from the total account balance to avoid liquidation.
- Isolated Margin: Margin assigned to a position is restricted to a certain amount. If the margin falls below the Maintenance Margin level, the position is liquidated. However, you can add and remove margin at will under this method.
Cross Margin, also known as “Spread Margin” is a margin method that utilises the full amount of funds in the Available Balance to avoid liquidations. Any Realised PNL from other positions can aid in adding margin on a losing position.
This margin method is useful for users who are hedging existing positions and also for arbitragers that do not wish to be exposed on one side of the trade in the event of a liquidation.
Note that, by default all positions are initially set to “Cross Margin”.
BitMEXDOES NOToffer portfolio margining. Unrealised profit may not be used to offset any unrealised losses, or as margin to open new positions. This is especially important for those traders who intend to trade the spread between two derivative contracts that share the same underlying. You must realize your profit by closing a position in order for it to be used to offset losses on another contract.
In this mode, your liability is limited to the initial margin posted. In the event of a liquidation, anyAvailable Balanceyou may have willnotbe used to add margin to your position.
Isolated Margin is useful for speculative positions. By isolating the margin the position uses, you can limit your losses to the initial margin set, and thus helps short-term speculative trade ideas that turned out incorrectly. In a volatile market, a highly leveraged position can lose equity quickly. However, note that although BitMEX aims tominimise liquidationsfrom happening, in volatile markets highly-leveraged are more likely to be liquidated. For example, a 50x position will be liquidated after a 2% move against you.
When using Isolated Margin, you are able to adjust your leverage on the fly via the leverage slider.
By default, Cross Margin is enabled. Users enable Isolated Margin on the order controls panel at the left side of the Trading Dashboard using the leverage slider. The further to the right you move the slider, the higher the leverage, and the less margin is used for the position. Note that the prefered leverage is effective per-contract and is saved, even if a user completely exits a position.
Once margin is isolated on a position, the amount of margin assigned to the position is adjustable. This allows you to choose a desirable leverage and liquidation price. Your liquidation price on the position is shown in the Open Positions tab and will update as you adjust your leverage.
During times of extreme volatility or during significant bull or bear runs, the markets may temporarily trade at a distance from theMark Price.
If the price that you buy or sell at is significantly far away from the Mark Price, you will see an immediate unrealised loss on the position upon opening. However note that thisdoes notmean that you have necessarily lost money. It is advisable that during these market conditions to pay attention to your liquidation price and avoid using the maximum leverage on Isolated Margin, since your position may be liquidated fairly quickly given the immediate unrealised loss the position saw upon opening.
Most BitMEX contracts are highly leveraged. To keep these positions open, traders are required to hold a percentage of the value of the position on the exchange, known as the Maintenance Margin percentage. Minimum Maintenance Margin Requirements can be reviewed on theRisk Limits Page.
If you cannot fulfill your maintenance requirement, you will be liquidated and your maintenance margin will be lost.
You can review your liquidation price per position via the Open Positions Tab and adjust by adding additional margin via the Leverage Slider or via the Risk Limits tab.
BitMEX usesFair Price Markingfor the purpose of avoiding liquidation due to illiquid markets or manipulation.
Risk Limits are also imposed that require higher margin levels for larger position sizes. This gives the BitMEX liquidation system more usable margin to effectively close large positions that would otherwise be difficult to safely close. If it is safe to do, larger positions are incrementally liquidated.
If a liquidation is triggered, BitMEX will cancel any open orders on the current contract in an attempt to free up margin and maintain the position. Orders on other contracts will still remain open.
BitMEX employs a partial liquidation process involving automatic reduction of maintenance margin in an attempt to avoid a full liquidation of a trader’s position.
- BitMEX cancels any open orders in the contract.
- If this does not satisfy the maintenance margin requirement then the position will be liquidated by the liquidation engine at the bankruptcy price.
The liquidation system attempts to bring a user down to a lower Risk Limit, and thus lower margin requirements by:
- Attempting to bring a user down to a Risk Limit associated with their open orders and current position.
- Cancelling any open orders and then attempting to bring a user down to a Risk Limit associated with their current position.
- Submitting a FillOrKill order of the difference between the current Risk Limit position size and the position size to satisfy the margin requirement to avoid liquidation.
- If the position is still in liquidation then the entire position is taken over by the liquidation engine and a limit order to close the position is placed at the bankruptcy price.
If BitMEX is able to liquidate the position at better than the bankruptcy price, the additional funds will be added to theInsurance Fund.
If BitMEX is unable to liquidate the position at the bankruptcy price, BitMEX will spend the Insurance Funds on aggressing the position in the market in an attempt to close it. If this still does not close the liquidated order, this will then lead to anAuto-Deleveragingevent.
|Unrealised PNL||Current profit and loss from all open positions.|
|Margin Balance||Your total equity held with the exchange.|
|Position Margin||The minimum equity you must retain with the exchange to keep your positions. This is the entry value of all contracts you hold divided by the selected leverage, plus unrealised profit and loss.|
|Order Margin||The minimum equity you must retain with the exchange to keep your open orders. This is the value of all open orders you have divided by the selected leverage.|
|Available Balance||Your margin available for new positions.|
A market order is an order to be executed immediately at current market prices. Traders use this order type when they have an urgent execution. Pay attention to the orderbook when selecting this order type, otherwise a large market order may “walk the book” and incur market-impact costs.
Limit orders are used to specify a maximum or minimum price the trader is willing to buy or sell at. Traders use this order type to minimise their trading cost, however they are sacrificing guaranteed execution as there is a chance the order may not be executed if it is placed deep out of the market.
Quantity = 10 Contracts Limit Price = 100 Direction = Buy
A bid of 10 contracts will be placed in the market with a Limit Price of 100.
A Stop Order is an order that does not enter the order book until the market reaches a certain Trigger Price. Traders use this type of order for two main strategies:
- As a risk-management tool to limit losses on existing positions, and
- As an automatic tool to enter the market at a desired entry point without manually waiting for the market to place the order.
BitMEX has three types of Stop Orders:
- Stop Market Order– A Market Order will be placed when the market reaches the Trigger Price.
- Stop Limit Order– A Limit Order will be placed when the market reaches the Trigger Price.
- Trailing Stop Order– A Trailing Value is set; if the price reverts by an amount equal to the Trailing Value, a Market Order triggers.
A positive Trail Value indicates a trailing Buy whilst a negative Trail Value indicates a trailing Sell.
For all Stop Orders, the Trigger Price can be specified as either the Last Price, Mark Price or the underling Index Price.
Stop Orders can be selected in the Dropdown list, by clicking on the three vertical dots, and will show you the Stop Price, Triggering Price and Status. There are three distinct Status events that are shown during the execution of a Stop Order:
- Untriggered– The Trigger Price has not reached a level to trigger the Stop order.
- Triggered– The Trigger Price has been reached but no order has been filled.
- Filled– The Stop Order has been triggered and the order has been filled.
Users may cancel Stop Orders by clicking the cancel button.
Quantity = 10 Contracts Stop Price = 100 Limit Price = 90 Trigger = Mark Price Direction = Buy
In this example, the user has selected a Stop Limit Buy Order with the Mark Price set as the Trigger Price. If the Mark Price hits 100, then a Limit Order will be placed for 10 contracts at 90.
Quantity = 10 Contracts Trail Value = 5 Trigger = Mark Price Direction = Buy (since the Trail Value is positive)
Once the user places this order type, a buy Market Order of 10 contracts will only be placed when the Mark Pricerisesmore than the Trail Value of 5 here. However, if the Mark Price falls, then this order type will chase it and will only execute if the Mark Price rises by the Trail Value of 5 from wherever it drops to.
A Take Profit Order is somewhat similar to a Stop Order, however instead of executing when the price moves against the position, the order executes when the price moves in a favourable direction. Traders predominately use Take Profit orders as opposed to Limit orders to increase the chances of closing out a position, or “taking profit”. They do this by specifying a Market or Limit order instruction to be executed once the market reaches the predefined Trigger Price.
BitMEX has two types of Take Profit Orders:
1. Take Profit Market Order– A Market Order will be placed when the market reaches the Trigger Price.2. Take Profit Limit Order– A Limit Order will be placed when the market reaches the Trigger Price.
For all Take Profit Orders, the Trigger Price can be specified as either the Last Price, Mark Price or the underling Index Price.
Take Profit Orders can be selected in the Dropdown list, by clicking on the three vertical dots, and will show you the Limit Price, Triggering Price and Status. There are three distinct Status events that are shown during the execution of a Take Profit Order:
1. Untriggered– The Trigger Price has not reached a level to trigger the Take Profit order.2. Triggered– The Trigger Price has been reached but no order has been filled.3. Filled– The Take Profit Order has been triggered and the order has been filled.
Users may cancel Take Profit Orders by clicking the cancel button.
Quantity = 10 Contracts Trigger Price = 100 Limit Price = 90 Trigger = Mark Price Direction = Sell
In this example, the user has selected a Take Profit Limit Buy Order with the Mark Price set as the Trigger Price. If the Mark Price hits 100, then a Limit Order will be placed for 10 contracts at the Limit Price of 90. A trader would set a Limit Price below the Trigger Price if they want to increase the chance of an execution when triggered.
This section will introduce users to various order functions they can use on top of the existing order types above.
A Hidden Order is a Limit Order that is not visible on the public orderbook. Users can access it via the Limit Order, Stop Limit Order or Take Profit Limit Order selection via checking the “Hidden” box. Traders use this order type when they don’t want to inform the market of their trading intentions.
Hidden Box Checked
Quantity = 10 Contracts Limit Price = 100 Hidden Box = Checked Direction = Buy
A buy Limit Order for 10 contracts with a Limit Price of 100 will be submitted to the market and will not be visible to other traders. It will be executed as per a normal Limit Order based on time / price priority.
An Iceberg Order is a Hidden Order where a part of the order is displayed on the public orderbook. Since savvy traders are able to identify Hidden Orders, some traders prefer to use this order type in an attempt to be indistinguishable from traders continously refilling their order. You can access this order type by selecting either the Limit Order, Stop Limit Order or Take Profit Limit Order and then checking the “Hidden” box and inputting a quantity to display.
Hidden Box Checked,
Quantity = 10 Contracts Limit Price = 100 Hidden Box = Checked Display Quantity = 1 Contract Direction = Buy
A buy Limit Order for 10 contracts with a Limit Price of 100 will be submitted to the market. Only a bid for 1 contract will be visiable to other traders. If someone submits a sell Order for 3 contracts at 100 then 3 contracts will be executed from this order. After that, another bid for 1 contract will appear at 100 to other traders. As such, there will now be 7 contracts left remaining, with 1 only visible.
Post Only Orders are Limit Orders that are only accepted if they do not immediately execute. That is, Post Only Orders never take liquidity. Market makers use Post Only Orders in order to only submit passive orders so as to earn the Maker rebate. This order type can be accessed from the Limit Order, Stop Limit Order or Take Profit Limit Order selection by checking the “Post-Only” box.
Post-Only Box Checked
Quantity = 10 Contracts Limit Price = 102 Post-Only Box = Checked Direction = Buy Best Ask = 101
If the Post-Only box was not checked in this example, then this order would execute in the market against the Best Ask of 101 and the order would pay the Taker fee. Given the Post-Only box is checked, this orderwill notexecute and be cancelled. Only if the Best Ask was higher than 102 will this order be placed in the market.
Close On Trigger is an additional order type specification that can be added to most of the above Stop and Take Profit Order types. It can be utilised by checking the “Close On Trigger” box. It is considered a “high-priority” order and if enough margin is not present to execute, it will attempt to amend down or cancel other open orders in the same symbol. This order may only be used to reduce a position and will automatically cancel if it would increase it. Traders use this order type in case of market reversals.
Close On Trigger Box Checked
Existing Position = 10 Contracts Quantity = 10 Contracts Direction = Sell Close On Trigger = Checked
A user has 3 existing buy Limit Orders in the market, and places a Stop Limit Sell Order with the “Close On Trigger” box checked. When the Stop executes, it reduces the position down to zero. Let’s assume there was not enough margin present in the account to execute this – in that case, the three limit orders will be canceled or amended down to free margin, starting with the ones farthest away from the market.
John is long 1,000 XBTUSD contracts with an average entry price of $1,000. The mark price of XBTUSD is currently $1,250.
John’s unrealised PNL is based on the difference between his average entry price and the mark price.
Unrealised Profit = ($1/$1,000 - $1/$1,250) * 1,000 = 0.20 XBT
The last price of XBTUSD is $1,500. However for the calculation of unrealised PNL, the mark price is used not the last price. To understand why, please readFair Price Marking.
John decides to sell 500 XBTUSD contracts at $1,500 and realise some profit.
John’s realised PNL is based on the difference between his average entry price and the price at which he sells XBTUSD.
Realised Profit = ($1/1,000 - $1/$1,500) * 500 = 0.17 XBT
Realised PNL is based on where you can actually buy or sell your position, which in most cases is not the mark price. If John had sold his 500 contracts at the mark price of $1,250, he would have a realised profit of 0.10 XBT.
BitMEX has a type of derivative contract called a Perpetual Contract. Buyers and sellers of perpetual contacts pay and receive funding fees periodically throughout the trading day. To learn more, please read thePerpetual Contracts Guide.
John is trading XBTUSD, which is a perpetual contract. Every 8 hours, there is a funding fee. The funding fee is currently 1%, and is paid from buyers to sellers.
John is currently long 100 XBT worth of XBTUSD. The position has no realised PNL. It is funding time and John must pay 1 XBT because he is long XBTUSD. After the funding fee has been paid, John’s realised PNL is now -1 XBT.
If John had been short 100 XBT worth of XBTUSD instead, he would have received 1 XBT. His realised profit would then be 1 XBT instead of -1 XBT.
All trading fees are accounted for through realised pnl.
John bought XBTUSD. The market has not moved. His unrealised PNL is 0, but his realised PNL is negative. John’s realised PNL is negative because he paid a taker fee when he bought XBTUSD.
If John had placed a passive limit order, he would be classified as a maker once the order was executed. As a maker, John would have been paid a rebate on the trade. In that situation, his unrealised PNL would be 0 and realised PNL positive.
Realised PNL is displayed in different locations on the BitMEX trading dashboard depending on whether you are merely reducing the size of an existing position, or closing it entirely.
If you have an open position with a realised profit of 10 XBT, this amount will show on the Open Positions tab.
If you completely close the same position and you realise a profit of 10 XBT, this 10 XBT will be shown on the Closed Positions tab.
If you then create a new position on the same contract, realised PNL will be reset to 0 XBT on the Open Positions tab. Realised PNL resulting from a partial closure of this new position will be displayed on the Open Positions tab.
If you then completely close this new position, any realised PNL will be added to that symbol on the Closed Positions tab.
BitMEX imposes risk limits on all trading accounts to minimise the occurrence of largeliquidationson margined contracts.
As users amass larger positions, they pose a risk to others on the exchange who may experience adeleveragingevent if the position cannot be fully liquidated. The
Stepmodel helps avoid this by increasing margin requirements for large positions.
Each instrument has a
Base Risk Limitand
Step. These numbers combined with the base Maintenance and Initial Margin requirements are used to calculate your full margin requirement at each position size.
As the position size increases, the maintenance and initial margin requirements will increase. Users must authorize a higher or lower risk limit on the Positions panel. Margin requirements will automatically increase and decrease as your risk limit changes.
|Symbol||Base Risk Limit||Step||Base Maintenance Margin||Base Initial Margin|
|ADAM18||50 XBT||50 XBT||2.50%||5.00%|
|BCHM18||50 XBT||50 XBT||2.50%||5.00%|
|XRPM18||50 XBT||50 XBT||2.50%||5.00%|
|XBTUSD||200 XBT||100 XBT||0.50%||1.00%|
|XBTM18||200 XBT||100 XBT||0.50%||1.00%|
|XBTU18||50 XBT||50 XBT||0.50%||1.00%|
|ETHM18||50 XBT||50 XBT||1.00%||2.00%|
|LTCM18||50 XBT||50 XBT||1.50%||3.00%|
|Term||Formula||XBTUSD Example (1 Step)|
|New Maintenance Margin %|
|New Initial Margin %|
|XBT Maintenance Margin|