Bitmex (The Bitcoin Mercantile Exchange) is a trading platform founded by former Citibank trader Arthur Hayes, Samuel Reed and Ben Delo in 2014.
Bitmex offer leveraged contracts of up to 100x bought and sold in Bitcoin, this is known as ‘margin trading’.
The holding company; HDR Global trading Limited is registered in the Seychelles.
BitMEX only accepts deposits through Bitcoin, which can then be used to trade against a variety of other cryptocurrencies.
Country of Origin: Hong Kong
Exchange Token: no
Fees: Tables below
Volume: over 35,000 BTC /$218 million +
Fiat to Crypto: no
Reported Hacks: none
Trading pairs currently available: XBTUSD, ADA, BCH, ETH, LTC and XRP.
BitMEX Basics – Order Types;
Limit Order – an order that is fulfilled if the given price is achieved
Market Order – an order that is executed at the current market price
Stop Limit Order – similar to a stop order, but give you the ability to set the price of the Order once the Stop Price is triggered
Stop Market Order – a stop order that doesn’t enter the order book, it stays hidden until the market reaches the trigger price
Trailing Stop Order – similar to a Stop Market order, but a trailing value can be set to place the market order
Take Profit Limit Order – similar to a Stop Order, a target price is set on a position
Take Profit Market Order – same as a stop order, but when the order is triggered it will be a market order, not a limit
- Two other orders BitMEX has you may not have seen before. Hidden and Iceberg orders.
Hidden Order – a limit order not placed on the public order books. Used by traders that don’t want others to know the positions they are placing.
Iceberg Orders – Similar to hidden order, but a part of the order is shown.
Generally only “whale traders” use the last 2 order types as their orders are likely to have a substantial impact on the current order book.
Margin trading is available in all of the cryptocurrencies displayed on the website. It also offers trades with futures and derivatives/swaps.
BitMEX has an awesome practice feature in which you can trade as normal on a test-net platform using “play money” to get a feel for things before risking any real capital.
Perpetual Swaps vs. Futures
BitMEX has two types of derivative assets that you can trade.
A futures contract is an agreement to buy or sell a given asset in the future at a predetermined price. They have an expiration date, a different Initial, a maintenance margin, and a specific settlement mechanism.
2. Perpetual swaps
Perpetual swaps are similar to futures, except that there is no expiry date or settlement. Currently, XBT-USD is the only available perpetual swap. The BitMEX price index is an average of Bitstamp and GDAX trading prices.
Leverage – Margin Trading
BitMEXs main feature is the leveraging of positions on the platform. Leverage is the ability to place orders that are multiples bigger than the users’ existing balance. Trading in such conditions is called “Margin Trading.”
There are two types of Margin Trading: Isolated and Cross-Margin.
Isolated – Allows the user to select the number of funds in their wallet they wish to use to hold their position after an order is placed.
Cross-Margin – Provides all of the funds in the users’ wallet to be used to hold their position.
A maximum leverage of 1:100 is available.
Another great leverage feature is that you can change your leverage, per position. This allows you to set a maximum loss, after which that position will be liquidated.
Binary series contracts
These are prediction-based contracts that settle at either 0 or 100. No leverage can be used for these contracts.
There are two types of binary series contracts.
- BLOCKS – settle on > 1MB block being mined and accepted by the majority on the main chain.
- SEGWIT – settle on SegWit being activated on the main chain. (Settled at 100)
Upside Profit Contract
This provides buyers with a way to participate in market rallies.
The buyer pays a premium on a trade date, this gives them the opportunity to receive the difference in the underlying settlement price and strike price on maturity date if positive, if not – no payment is made.
Investors can only set long UPs, they can’t short.
The possible loss is limited to the initial investment, which is usually a fraction of the coin price.
There is no liquidation price or margin call. Therefore buyers maintain a long market position during market declines but still are in for rallies that happen pre-expiry.
Downside Profit Contract
This provides buyers with a way to participate in market declines. The buyer pays a premium on a trade date, this gives them the opportunity to receive the difference in the underlying settlement price and strike price on maturity date if positive, if not – no payment is made.
If the underlying falls below the barrier price within the life of the contract it expires and is settled early using the barrier price.
Investors can only set long DOWNs, they can’t short sell.
Like UPs there is no liquidation price or margin call. So buyers maintain a short market position during market rallies but still participate in declines that happen pre – expiry.
**TIP** For protection traders overlay these on top of a long Bitcoin portfolio to limit losses in a crash.
as per Bitmex
Deposits and Withdrawals
There are no charge fees for deposits or withdrawals on BitMEX. There is a minimum Network fee is based on blockchain load however which is very minimal.
As Bitcoin is the only asset used to withdraw and deposit it serves as the collateral on all trading contracts, it’s irrelevant whether the trade involves Bitcoin or not.
To make a withdrawal, users set the amount to withdraw enter the wallet address and transfer away.
Deposits are 24/7 but withdrawals are not automated and are processed by hand at a recurring time once a day. The idea being hand processed withdrawals will increase the security levels of users’ funds by needing extra time with an email confirmation to remove the risk of fraudulent requests and by removing the use of automated systems & hot wallets the risk of compromise is reduced.
There’s no cap to the amount of Bitcoin you can deposit to and withdraw on BitMEX. The minimum deposit varies from contract to contract depending on the Initial Margin, but in general is low.
Ok, so you want to give Bitmex a go…
The following is BitMEX recommendations before beginning trading on the exchange website;
- The first step is to read through the References Tab and 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.
Co-Founder and CEO
Experienced equity derivatives trader and banker.
Co-Founder and CSO
Builds market making and high frequency trading systems.
Co-Founder and CTO
Expert in fast, realtime web applications
BitMEX is fantastic for more experienced traders. Fees are slightly higher than most normal crypto exchanges but the leveraging options available in bitcoin are second to none. They have an enormous trading volume, strong security standards, a good community following, and a transparent team.
The future looks bright for the leading bitcoin leveraging exchange if they continue to grow with the market – but for those just starting out in crypto, we would advise you start somewhere a bit more simple with less risk. Once you’re happy to move up to the next level have a play with the demo mode, test the platform out and then once you feel confident start small, enjoy and always manage risk accordingly.