Cryptocurrencies for trading
BTC, ADA, BCH, EOS, ETH, LTC, Tron, XRP
Republic of Seychelles
Guarantee stop loss
Negative balance protection
Trade Costs: -0,05% to 0,25%
This BitMEX review delves deep into one of the platforms that mix the stock and currency exchange tools, called BitMex platform. Stay tuned as we investigate different crypto trading tools, as well as other aspects of the exchange such as management, fees, verification requirements and many other important details. BitMEX offers derivative trading which differentiates the platform from Bitfinex, Bitstamp, Kraken, CEX.io and Poloniex. Derivative trading is for more advanced traders.
This review is written by a real trader and express his/her opinion on the platform. We also have the BitMEX summary which is a summary of the BitMEX platform with no personal aspects involved.
What is BitMex?
BitMex is a crypto trading platform, where investors from all over the globe post orders based on long/short positions. The company called HDR Global Trading Limited, registered in the Republic of Seychelles, owns the web exchange. The three co-founders are coming from the US soil, thus many might put questions why the company opened their operations outside of the North American continent.
The answer is obvious, as income taxes and anti-laundry laws are a lot more flexible in Seychelles. Does it mean that exchange is a scam-in-waiting? Up to this point, definitely not but one should never let his guard down in the end.
Thus, the company does not follow KYC/AML laws nor does it hold any sort of certifications. Verification could be required upon the request from support unit of the business but in most cases, users do not need to verify their identity details.
The exchange is available on the web only, while mobile platforms are not available as of yet. The service is globally available as the crypto trading tools and accepts BTCs as the only currency of trade.
Payment Methods and Currencies
When it comes to deposit options and currencies accepted, BitMex is quite simple – nothing but bitcoin trading transfer is accepted. You can deposit, trade and withdraw the cryptocurrency anytime you like but nothing else is possible on this platform. We view this fact as a very large limitation for traders since few options are available at the exchange.
Fees and Limitations
There are no transaction values limitations imposed on traders apart from the funds they have on their balances. Funding, depositing and withdrawing bitcoins from the BitMex account is free, while trade costs are:
Hidden and Iceberg orders always pay taker fees until the order is executed, when the maker fees are calculated for the shown quantity of the order.
The platform offers two functions of security when it comes to trade. First is the two-factor authentication (2FA) and the second function is cold online storage of your coins. The multisig wallet uses offline storage capacity of the BitMex. Thus, funds are released for trade only when 2 of 3 factors are used for the transaction.
A tool called kdb+, which makes risk checks of every single transaction, protects the trading database. The features are sufficient for the platform of this size, especially the cold storage capacity that we can only show appreciation.
Communication is protected through PGP encryption should you wish to, protecting the contents between you and BitMex’s support.
How to Sign up
Registration at BitMex is done free of charge, without any sort of verification requirements from traders interested in exchange’s services. What’s more, there are no deposit limitations, thus the trade is completely private.
BitMex uses traditional long and short positions (buy and sell orders) when conducting transactions, with market price averages based on Coinbase and Bitfinex (50% of each). Every 8 hours, a funding process would occur, making traders receive or pay BTC depending on the positions you took. You will pay/receive the fees only in case if your order is active while funding goes live.
The BitMex margin trading is quite confusing for beginners while advanced crypto traders would find an abundance of choice, suitable for different crypto trading strategies, much like Bitfinex. If you are looking for simpler ways to get bitcoins, CEX.io might be of more interest to you. You would need to verify your account at CEX.io though and pay higher transaction fees than at BitMex.
The several distinctive trading platforms that you can use within the exchange are:
- limit market;
- stop limit market;
- others (stop market, trailing stop, take profit limit and take profit marker).
Futures are agreements on the purchases made in future on predetermined prices at the specific time. These contracts can be physically confirmed or through cash settlements. Thus, leveraging is quite useful here, as you can borrow a large number of bitcoins and make very high profits from a single order. Popular futures are BTC/JPY, Ethereum futures, BTC/USD and Zcash futures. You should be aware that all trades at BitMex are calculated according to the bitcoin value.
You have base value based on current price of bitcoin and the discount rate at which you are making your long or short position. The more accurate you time your premium discount rates, the more money you will make in the process.
Swaps are very similar to futures in many aspects, as both indulge in leveraging and are both based on fair price marking when setting the base and premiums. The major difference lies in the fact that swaps do not have time limitations.
It is a more safe approach to the BTC trading. It works on very small value changes during the duration of the contract while futures rely on value fluctuations. Most popular swap trade pair is BTC/USD and funding is the main tool you have when conducting swaps at BitMex.
Funding is fees or revenues paid for positions you hold during funding period. When the rate is positive for you, then longs pay shorts. In a different situation, short pays long position.
Margin Trading Instruments & Functions
Limit Market Functions
In the limit market, you set the risk limits to where you are willing to allow the trade to go, putting the bottom price line that can be harmful for your profit margin. The functions used on this platform are:
- post-only (used to completely root out risks, as it cancels the order if the unfavorable margin limit has been met);
- hidden (orders not displayed in the book);
- reduce-only (similar with post-only with a difference of reducing your order);
- time in force (uses goodtillcancel, immediateorcancel and fillorkill functions, all used to limit the order value’s fluctuations).
This is the fastest approach when BTC price is at the desired level, where orders are executed immediately at the market value.
Stop Limit Market
This is a trigger platform, where you specify the maximum and minimum values of the order that you do not wish to pass over. It uses most of the functions of limit market, with exception of reduce-only function.
The other markets are different versions of stop limit markets, with different functions being:
- stop market (order posted in books once the value reaches the desired level);
- trailing stop (uses both positive and negative trends, triggering buy and sell orders);
- take profit limit (keeps a profit margin limit as the minimum required for an order to take place);
- take profit market (sets target profit making price at a position).
The auto-deleveraging (ADL) function at BitMex is probably one of the most important passive features in the platform. In the case when your order reaches bankruptcy level, the auto-deleveraging function kicks in, stopping you from incurring even larger losses when liquidating the orders.
You can choose when the price would be closed when you are releasing the order into the market. The positions you make are ranked by ADL importance meter, competing with other orders. Top ones have less chance of having ADL while those that are riskier have higher chance of being liquidated.
Fair Price Marking
This function is employed by the BitMex system and it stops the unnecessary liquidations. High leveraged products could be influenced by manipulation of the market, illiquidity of orders or large swings. FPM protects the market from these trends and allows leveraging to be done and ADL are subjected to it. Occasionally, due to the instability of the industry, orders might be moved to mode “LastPriceProtected”, where BTC value is frozen.
FPM for Futures is calculated the Fair Price equals to the Index Price plus Fair Value rate.
Isolated and Cross-Margin
Isolated margin is used when you wish to limit a position’s value and will be liquidated if the limit is crossed. Used when you want to play it safer and limit your potential losses.
Cross-margin uses balance funds in the case you wish to keep the position open and not liquidated. We consider this trade as “make or break”, as you can make profit or loss of all of your funds.
Liquidated order is a closed order before the designed time, resulting in loss of your profit margins. With FPM, liquidations are kept at a minimum but they still do occur if you are not careful. Passing the set limitations or if the position you opened overpasses what you have in balance can result in liquidation.
Depending on the risk limit tiers, pushing towards lower risk levels starts by cutting open orders first. If that does not meet the maintenance requirements, then ADL would be implemented.
BitMEX accounts for realized and unrealized profit and loss margin (PNL). Unrealized PNL is based on the difference between his average entry price and the market price. Realized PNL takes into account what really happened when you took the order and included fees. It is calculated at the real-time even through the order duration. It means that you can choose when to close the position if you are satisfied with PNL level.
All orders have a risk limit level assigned to provide valid grounds for liquidation. Margin requirements are set (balance keeping) on the orders, with larger transactions having larger limitations. You personally need to accept the risk level, pushing you to consider the order before publishing it.
You can move charts, download tables and change colors and look of your dashboard at any time. Additionally, the order book updates in mere seconds, thus the flexible interface design and data extraction are important.
Pretty much anything you see on the screen is movable and you can design the interface according to your needs.
There is even calculator option available for those that want a quicker order done.
If functions were not enough for you to handle your trade properly, BitMex offers powerful API tools as well. There are several choices for traders to choose, which we deem as important and useful to have at your fingertips.
Gives you control over when the orders happen in terms of specific time, day, month and year. The API also provides “keep alive” feature, stopping you to log off from the platform if you become inactive.
This API provides you to receive alarms on whatever concerns you in the platform through email notification system. From BTC, to order’s milestones and book changes, you can set up API and cover these issues at all times.
Further develops the design tools of the order books that are compatible with other exchanges (in other words, the way you wish to see them).
This API designs the platform according to the Trading View, giving more clarity to the latest and best orders.
BitMex Social Communication
Support department of the BitMex runs several channels where you can directly communicate with representatives of the exchange. You have blogs and FAQ sections for needed information, while direct communication with support representatives possible through reddit, Twitter, IRC and email.
We found BitMex an excellent marketplace for traders that know the industry well and are not afraid to use several functions and API tools to make money from BTC trading operations. There are numerous markets to dive in, several very useful functions as well as user-friendly interface making everything more clearly for the experts in the field.
Unfortunately, beginners might find themselves lost almost immediately. The entire platform is geared towards people that have been in the market for a while. Another important disadvantage in investing into the platform is the fact that you can deposit and withdraw only bitcoin. You do use other fiat and cryptocurrencies as trade measures but you do not get to deposit/withdraw them.
Pros and Cons
- no verification is needed from traders unless support deems necessary on individual cases;
- very low fees when compared to other exchanges;
- a lot of functions available, as well as trading choices (swaps or futures);
- adequate security measures protecting funds, communication as well as the platform itself.
- geared towards advanced users, beginners will have hard time learning functions and features;
- traders can deposit and withdraw bitcoins only, with other options such as bank transfers credit/debit cards and cash transfers unavailable;