In this BitMEX review and crypto trading guide we will go all necessary information to take the decision to trade with BitMEX, or not.
We will cover BitMEX trading fees, auto deleveraging and cross margin on BitMEX. In addition, we will cover the complete trading site, including, security, insurance fund, deposits. futures, perpetual swaps and much more.
BitMEX offers futures trading with leverage. If you are more into spot trading you can check all our top bitcoin trading sites.
BitMEX referral code: 10% fee discount for the first six months.
What is BitMEX?
BitMEX is a pure cryptocurrency derivative trading platform. It is owned and operated by HDR Global Trading Limited, which is registered in the Seychelles and has offices worldwide.
BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, with financing from family and friends.
BitMEX Deposit Options Review
BitMEX only supports Bitcoin deposits. Actually, all trading is carried out in Bitcoin even though you can speculate in other cryptocurrencies.
BitMEX referral code: 10% fee discount for the first six months.
BitMEX Fees Review
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 trading costs.
Below, you can see all the different trading fees for BitMEX. As all other trading sites, BitMX charges maker and taker trading fees.
An interesting thing to notice is that the BitMEX fees are flat independent of the trading volume which is uncommon for cryptocurrency trading fees schedule. For example, you can compare with Binance trading feeswhere you will pay less in fees the more you traded the last 30 days.
Is BitMEX Safe? BitMEX Security Review
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 start trading with BitMEX?
To start trading with BitMEX, first step is to sign up and register an account with BitMEX.
Click on the button below and sign up with an email.
BitMEX referral code: 10% fee discount for the first six months.
After registration, you need to login, deposit Bitcoin and start trading.
The BitMEX trading screen will look like the screenshot below and has similar fields as any trading screen.
- All cryptocurrencies available for trading
- Order book, trading chart, order book history
- Open positions, closed positions, active orders, stops, fills, order history
- Order criterias
What are BitMEX Futures?
Crypto and Bitcoin futures are one kind of crypto trading instrument. They are agreements, or financial contracts, that obligate the parties tr transact an asset(often Bitcoin) at a predetermined future date and price. The buyer must purchase the underlying asset and the seller must sell the underlying asset. This will be done on the set price, regardless of the current market price at the expiration date. Compare different bitcoin futures platforms.
BitMEX has three different crypto futures
- Quanto futures
- Linear futures
- Inverse futures
What is BitMEX Quanto Futures?
A quanto futures contract is a type of derivative in which the underlying is denominated in one currency, but the instrument itself is settled in another currency at some fixed rate.
BitMEX have designed quanto contract to be easy to trade and understand.
You need to understand that you trade the underlying margin and your profit and losses in Bitcoin.
However, you are still exposed to Bitcoin/USD price risk when trading Quanto Futures, even though the underlying and quote currencies are not Bitcoin.
What is BitMEX Linear Futures?
The BitMEX linear futures contract is a common derivative among altcoins
The price of a linear contract is given as the price of the underlying crypto against XBT (Bitcoin).
What is BitMEX Inverse Futures?
The BitMEX inverse futures contract is worth a fixed amount of the quote currency.
In XBT futures’ case, each contract is worth $1 of Bitcoin at any price.
The BitMEX XBT futures are inverse contracts because they are quoted as XBT/USD but the underlying is USD/XBT or 1 / (XBT/USD).
BitMEX 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).
What is BitMEX Auto Deleveraging?
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.
What is BitMEX insurance fund?
BitMEX uses an Insurance Fund to avoid use of their auto-deleveraging features. The fund is used to aggress unfilled liquidation orders before they are taken over by the auto-deleveraging system.
The insurance fund grows for every liquidation that was executed at a better price than the bankruptcy priceof that specific trading position.
You can read a full article about what is the BitMEX insurance fund?
BitMEX 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.
What is BitMEX 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 realized and unrealized profit
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.
How does BitMEX limit the risk?
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.
What can I do in the BitMEX interface?
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.
What is BitMEX API?
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.
Why Should I trade on BitMEX?
In this BitMEX Review 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.
Can I short Bitcoin on BitMEX
Yes, you can go short Bitcoin on BitMEX. Actually, all trading instruments on BitMEX are available to short sell. In addition, you can short with leverage on all cryptocurrencies as well. Read our step-by-step guide on how to short Bitcoin on BitMEX.
BitmEX Review - 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;
If you’d like to know more about BitMEX testnet, please read What is BitMEX testnet.