BitMEX is a great trading site for both long and short futures contracts. In this crypto trading guide we will explain all different futures contracts at BitMEX.
In this focused review we go deep into the different futures contracts. If you are interested in a more general review about the complete trading site, we recommend our BitMEX review.
What is BitMEX?
BitMEX is a crypto derivative trading site denominated in Bitcoin. It means you must deposit Bitcoin to trade and all trades are settled in Bitcoin.
BitMEX is owned by HDR Global Trading Limited.
What is BitMEX contracts long VS short?
With BitMEX, and all futures contracts, you can speculate in both directions. So, with all trading instruments, you can go long and you can go short with BitMEX.
If you go long, you buy the asset and you will profit from an increasing price of the underlying asset.
If you go short, you technically sell the asset and you will profit from a decreasing price of the underlying asset.
What different BitMEX futures contracts are there?
BitMEX has several different futures contracts on the trading site. A trader must be aware of the definition of a trading instrument before trading with that particular trading instrument. Otherwise, things can turn really bad.
Lets look into the the three different futures contracts
- Quanto futures
- Linear futures
- Inverse futures
What are BitMEX quanto futures?
With the BitMEX quanto future the underlying is denominated in one currency, but the instrument itself is settled in another currency at some fixed rate
These contracts are designed to be easy to trade and understand, but keep in mind as you trade them that your underlying margin, profit and losses are in Bitcoin. You are still exposed to Bitcoin/USD price risk when trading Quanto Futures, even though the underlying and quote currencies are not Bitcoin.
For example, you can trade Binance Coin futures and since the instrument is settled in Bitcoin you are exposed to BTC/USD as well.
What are BitMEX linear futures?
The price of BitMEX linear future contracts is expressed as the price of the underlying against XBT. Each contract is usually worth one unit of the underlying.
In the screenshot below, you can see all linear futures available on BitMEX.
What are BitMEX inverse futures?
The BitMEX inverse contracts are inverse because they are quoted as XBT/USD but the underlying is USD/XBT or 1 / (XBT/USD). They are quoted as an inverse to facilitate hedging US Dollar amounts while the spot market convention is to quote the number of US Dollars per Bitcoin.
IN the screenshot below, you can see all BitMEX inverse contracts.