BitFlyer contract trading rules

By understanding the contract trading rules, such as order types, leverage, and fees, you can effectively trade on BitFlyer's contract trading platform.

Nov 09, 2024 at 08:18 am

BitFlyer Contract Trading Rules: A Comprehensive Guide

Introduction

BitFlyer is one of the world's leading cryptocurrency exchanges, headquartered in Japan. The exchange offers a range of trading services, including spot trading, margin trading, and contract trading. This article provides a comprehensive guide to BitFlyer's contract trading rules, covering everything from order types to margin requirements.

Step 1: Understanding Contract Trading

Contract trading is a type of derivative that allows traders to speculate on the future price of an asset without owning the underlying asset. In the case of BitFlyer, contract trading is available for Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).

Traders can take either a long position (betting on the price going up) or a short position (betting on the price going down). Contract trading can be a leveraged product, meaning that traders can borrow funds from the exchange to increase their potential profits. However, this also increases the risk of losses.

Step 2: Opening a Contract Trading Account

To trade contracts on BitFlyer, you will need to open a contract trading account. This requires you to complete the KYC (Know Your Customer) process, which involves providing personal information and proof of identity.

Once your account is approved, you will need to deposit funds into your account. You can do this by transferring cryptocurrency from another wallet or by purchasing cryptocurrency using a credit/debit card or bank transfer.

Step 3: Placing a Contract Order

To place a contract order, you will need to specify the following:

• The contract you want to trade (BTC, ETH, or LTC)
• The order type (limit order, market order, or stop order)
• The order quantity
• The price at which you want to buy or sell

Step 4: Order Types

BitFlyer offers a range of order types, including:

• Limit order: A limit order is an order to buy or sell a contract at a specified price or better. The order will only be executed if the market price reaches the specified price.
• Market order: A market order is an order to buy or sell a contract at the best available market price. The order will be executed immediately.
• Stop order: A stop order is an order to buy or sell a contract when the market price reaches a specified price. The order will only be executed if the market price reaches the specified price.

Step 5: Margin Requirements

Margin trading allows traders to borrow funds from the exchange to increase their potential profits. However, this also increases the risk of losses. The margin requirement for contract trading on BitFlyer varies depending on the contract and the trader's account level.

For example, the margin requirement for the BTC/JPY contract is 10%. This means that a trader who wants to open a position worth 100,000 JPY will need to have 10,000 JPY in their account.

Step 6: Liquidation

If the market price moves against your position and the margin requirement is not met, your position may be liquidated. This means that the exchange will close your position and sell your position to close creditors out positions. In such a scenario, in case of a favourable market movement, you might lose all of your funds.

Step 7: Fees

BitFlyer charges a range of fees for contract trading, including:

• Trading fee: A fee charged on each trade. The trading fee varies depending on the contract and the trader's account level.
• Margin interest: A fee charged on funds borrowed from the exchange. The margin interest rate varies depending on the contract and the trader's account level.
• Withdrawal fee: A fee charged on withdrawals of cryptocurrency from the exchange. The withdrawal fee varies depending on the cryptocurrency and the withdrawal method.

Step 8: Contract Specifications

The following table provides a summary of the contract specifications for the BTC/JPY, ETH/JPY, and LTC/JPY contracts on BitFlyer: