How to trade perpetual contract on Bybit

On Bybit, traders can access perpetual contracts on an array of cryptocurrencies, enabling them to speculate on future price movements with no expiry date.

Nov 09, 2024 at 05:46 pm

Understanding Perpetual Contracts on Bybit

Perpetual contracts, also known as perpetual futures, are a type of derivative contract that allows traders to speculate on the future price of an underlying asset without an expiry date. Unlike traditional futures contracts, perpetual contracts don't expire, providing traders with the flexibility to hold positions for as long as desired.

Bybit, a renowned cryptocurrency exchange, offers perpetual contracts on a wide range of cryptocurrencies, including Bitcoin, Ethereum, and Solana, giving traders access to opportunities in the volatile digital asset markets.

Step-by-Step Guide to Trading Perpetual Contracts on Bybit

1. Create a Bybit Account and Fund Your Wallet

• Visit the Bybit website and create a new account by providing your email address, choosing a strong password, and completing the verification process.
• Once your account is created, fund your wallet with either cryptocurrencies or fiat currencies. Bybit supports various payment methods, including credit/debit cards, bank transfers, and cryptocurrency deposits.

2. Choose a Trading Pair and Set Your Leverage

• Select the desired trading pair, such as BTC/USDT or ETH/USD, from the drop-down menu on the trading interface.
• Determine the appropriate leverage level based on your risk tolerance and trading strategy. Leverage allows traders to amplify their potential profits but also increases the risk of losses.

3. Select Order Type and Enter Position Size

• Bybit provides two main order types for perpetual contracts: limit orders and market orders. Limit orders allow traders to specify the desired price at which their orders will be executed, while market orders execute immediately at the current market price.
• Enter the position size, which represents the number of contracts you wish to buy or sell. Consider your account balance and risk management strategy before specifying the position size.

4. Monitor Your Position and Manage Risk

• Once your order is executed, you can monitor the position's performance in real-time from the trading interface.
• Bybit offers various risk management tools, such as stop-loss and take-profit orders, to help you mitigate potential losses. Adjust your position size or leverage as necessary based on market conditions.

5. Manage Funding Fees

• Perpetual contracts are subject to funding fees, which are small periodic payments that ensure the perpetual contract's price remains aligned with the spot market price. Bybit charges or pays funding fees depending on the position direction (long or short) and market conditions. Consider the impact of funding fees on your overall trading strategy.

6. Close Your Position

• To close a position, simply place an opposing order of the same size and direction. For instance, if you have a long position, place a short order of the same size to exit the trade.
• Alternatively, you can use the "Close All" button on the trading interface to close all open positions.