How to operate BitMEX contract

To operate a BitMEX contract, create an account, fund it, place an order specifying contract, order type, and quantity, monitor the order, and manage your risk through margin and stop orders.

Nov 10, 2024 at 08:04 pm

How to operate BitMEX contract

BitMEX is a cryptocurrency exchange that offers perpetual futures contracts for trading. Perpetual futures contracts are similar to traditional futures contracts, but they do not have an expiration date. This means that you can hold a perpetual futures contract indefinitely, or until you decide to close it.

To operate a BitMEX contract, you will need to:

1. Create a BitMEX account. You can create a BitMEX account by visiting the BitMEX website and clicking on the "Sign Up" button.
2. Fund your BitMEX account. You can fund your BitMEX account by depositing Bitcoin or another cryptocurrency into your account.
3. Place an order. To place an order, you will need to select the contract that you want to trade, the order type, and the order quantity.
4. Monitor your order. Once you have placed an order, you can monitor its status by clicking on the "Orders" tab in the BitMEX web interface.

Order types

There are three main types of orders that you can place on BitMEX:

• Market orders are executed immediately at the current market price.
• Limit orders are executed only when the market price reaches a certain level.
• Stop orders are executed only when the market price reaches a certain level, and then they become market orders.

Order quantity

The order quantity is the number of contracts that you want to buy or sell.

Margin

When you trade perpetual futures contracts on BitMEX, you will need to use margin. Margin is a form of leverage that allows you to trade with more money than you have in your account.

The amount of margin that you need to use will depend on the contract that you are trading and the order type that you have placed.

Funding

Perpetual futures contracts are funded on a daily basis. This means that you will need to pay or receive funding on a daily basis, depending on the position that you are holding.

The funding rate is determined by the difference between the perpetual futures contract price and the spot price of the underlying asset.

Liquidation

If you lose too much money on a perpetual futures contract, you will be liquidated. Liquidation is the process of selling your contract at a loss to cover your margin debt.

The liquidation price is determined by the margin level of your account. The margin level is the ratio of your account equity to your margin debt.

Step-by-step guide to operating a BitMEX contract

1. Create a BitMEX account. You can create a BitMEX account by visiting the BitMEX website and clicking on the "Sign Up" button.
2. Fund your BitMEX account. You can fund your BitMEX account by depositing Bitcoin or another cryptocurrency into your account.
3. Choose the contract that you want to trade. BitMEX offers perpetual futures contracts for a variety of cryptocurrencies, including Bitcoin, Ethereum, and Litecoin.
4. Place an order. To place an order, you will need to select the contract that you want to trade, the order type, and the order quantity.
5. Monitor your order. Once you have placed an order, you can monitor its status by clicking on the "Orders" tab in the BitMEX web interface.
6. Manage your risk. When you trade perpetual futures contracts, it is important to manage your risk. This means that you should only trade with money that you can afford to lose, and you should use stop orders to limit your losses.
7. Withdraw your profits. Once you have made a profit on a perpetual futures contract, you can withdraw your profits by clicking on the "Withdraw" tab in the BitMEX web interface.