How to play perpetual contract on BitMEX

Playing perpetual contracts on BitMEX allows traders to speculate on the future price of cryptocurrencies without owning the underlying asset, enabling them to capitalize on price movements and potentially profit from volatility.

Nov 22, 2024 at 03:38 am

How to Play Perpetual Contract on BitMEX: A Comprehensive Guide for Crypto Traders

Perpetual contracts, also known as perpetual futures, are popular financial instruments in the cryptocurrency market that allow traders to speculate on the future price of an asset without taking ownership of the underlying asset. BitMEX, a leading cryptocurrency derivatives exchange, offers a wide range of perpetual contracts on various cryptocurrencies, providing traders with the opportunity to:

• Speculate on the future price of cryptocurrencies: Traders can go long or short on perpetual contracts to bet on whether the price of the underlying asset will rise or fall.
• Hedge against risk: Traders can use perpetual contracts to hedge against the risk of unfavorable price movements in the underlying asset.
• Earn profit from volatility: Perpetual contracts allow traders to profit from fluctuations in the price of the underlying asset, even if the overall trend is sideways.

Playing perpetual contract on BitMEX is a multi-step process that requires a solid understanding of the platform and its features. This comprehensive guide will walk you through every step, from setting up an account to placing and managing your trades.

Step 1: Setup a BitMEX Account and Fund It

1. Visit the BitMEX website and click on "Register."
2. Enter your email address, create a password, and agree to the terms of service.
3. Verify your email address by clicking on the link sent to your inbox.
4. Once your account is verified, you can proceed to fund it.
5. Click on "Wallet" in the top navigation bar.
6. Select "Deposit" and choose the cryptocurrency you want to deposit.
7. Copy the deposit address and send your funds to the provided address.

Step 2: Understand the Perpetual Contract Market

1. Perpetual contracts are traded in pairs, such as BTC/USD or ETH/USD. The first currency in the pair is the underlying asset, and the second currency is the quote currency.
2. The price of a perpetual contract is expressed in the quote currency. For example, a BTC/USD perpetual contract with a price of 20,000 means that one Bitcoin is worth 20,000 US dollars.
3. Perpetual contracts are perpetual, meaning they do not have an expiration date. Traders can hold their positions indefinitely or until they decide to close them.

Step 3: Place Your Perpetual Contract Order

1. Click on "Trade" in the top navigation bar.
2. Select the perpetual contract you want to trade from the list of available markets.
3. Choose the order type you want to use. BitMEX offers a variety of order types, including market orders, limit orders, and stop orders.
4. Enter the quantity of the contract you want to buy or sell.
5. Click on "Buy" or "Sell" to place your order.

Step 4: Manage Your Perpetual Contract Position

1. Once your order is executed, it will appear in the "Open Orders" tab.
2. You can monitor the status of your order, modify it, or close it at any time.
3. To close your position, simply click on the "Close" button next to the order.
4. You can also set a stop-loss order or a take-profit order to automatically close your position if the price reaches a certain level.

Step 5: Withdraw Your Funds

1. Once you have closed your position and made a profit, you can withdraw your funds.
2. Click on "Wallet" in the top navigation bar.
3. Select "Withdraw" and choose the cryptocurrency you want to withdraw.
4. Enter the withdrawal address and the amount you want to withdraw.
5. Click on "Withdraw" to submit your request.