Bitmex Leverage Trading

Bitmex leverage trading is a form of crypto trading that involves taking an initial monetary risk. Usually it goes by way of borrowed funds to increase the potential of larger long-term returns. This process is also called margin trading; There is no difference between the two terms.

Leverage trading allows you to access positions and sums that exceed the current worth of your account balance. The benefits of the process are easy to see—you gain immediate access to an exponent of your current budget. In other words this is the possibility that your investment won't break even though it creates leverage trading's inherent risk. If you don't make good on your initial investment, then you stand to lose that investment and much more.

When using leverage trading, you usually have two options—"going long" and "going short." The former refers to purchasing a contract or sum because you believe its value will increase, the latter translates to selling a contract because you believe its value is set to decrease.

A leveraged short on Bitmex is often done with the intention of buying back the sold contract at a later date at a lower price.

Obviously, you can't borrow funds without some guarantee that your loaner will see a return on their investment. To account for this, opening a position requires you to put up a portion of your account balance, often proportionate to the amount to you borrowed, as collateral.

If the trade is a success, your collateral is returned to you, along with any associated fees. If the market goes against your prediction, then your collateral is forfeit—it will be given to your investor once the market reaches its liquidation price.

Bitmex leverage explained

Here is where Bitmex comes into play. Bitmex offers a multitude of cryptocurrencies for you to experiment with, but once the time for payment comes all funds will be settled in bitcoin. As such, all investments, withdrawals, and deposits will be made with bitcoin.

To get started, you're going to need to register for an account. The process is identical to most modern websites—provide an email address and verify it, and afterwards, you're set to explore the website. Next, you need to deposit funds. You can do so through the sites account system and different menus.

Cross Leverage

Cross leverage, or Cross Margin, is a method used by Bitmex traders to avoid liquidation. In short, Cross Leverage does this by spending the entirety of your account's balance. By doing this, you remove the risk of losing your collateral. That said, you also create a much larger personal risk, as you jeopardize your ability to see a return on your investment.

Cross leverage on Bitmex is shared between two open positions. These two positions must be entirely separate from one another in order for the trade to take place. Additionally, one of the two will need to draw more than the other in order to avoid total liquidation. Cross leverage on Bitmex can be an effective way to minimize the risk associated with your investment.

As such, it's a recommended practice for beginners and those without a solid read on what direction the market happens to be moving.

Placing a Bitmex Leveraged Trade

To begin your trade, you will need to navigate to the trading screen. On the Bitmex's website, the link to do so is at the very top of the homepage. From there, you will be taken to a screen where you can select your cryptocurrency of choice. Currencies on offer are bitcoin, Cardano, Bitcoin Cash, Litecoin, and Ripple. This guide will be focused on bitcoin for simplicity's sake.

Next, you will want to enter the details of your position. You can do so on the screen to the left of the homepage. You will be able to customize your position be choosing how much of a given currency you want to purchase in USD. From here, Bitmex leverage begins.

Bitmex Trading—Bitmex 50x leverage and Bitmex 100x leverage

As mentioned earlier, Bitmex leverage trading occurs in exponents. You can customize Bitmex leverage with a variety of multipliers, but in this guide, we will focus on Bitmex 50x leverage and Bitmex 100x leverage.

For both of these sums, you will want to go short. Going short is always recommended for beginners, as it has a more forgiving margin of error. 10x leverage will offer less of a return on your investment, but create a lesser risk of losing your collateral. The opposite will be true for Bitmex leverage 100x.

Bitmex Auto Deleverage

Auto deleveraging refers to the system Bitmex uses to liquidate a trader's position. Once a position is liquidated, it is taken over by Bitmex's automated software. By default, the price where a position will be closed is the stated bankruptcy price given at the time the order was placed.

Does changing your leverage on bitmex cost money?

If you're decreasing your leverage, then it depends on your situation.

If you're decreasing your leverage while you still have the borrowed funds, then you can return them and decrease free of charge.

Decreasing your leverage without the borrowed funds in your account is the same as preemptively yielding your collateral. As such, decreasing your leverage without enough funds in your account will liquidate it, and in turn, remove you from the market.

If you're increasing your leverage, then there are usually some small Bitmex leverage fees. These Bitmex leverage fees are often proportionate to your original leverage, and as such, will be greater the higher your initial investment was.

Why does my leverage go up automatically Bitmex?

People often ask the question—why does leverage slowly increase bitmex? The answer is complex. Put simply, leverage automatically increases as a sort of insurance against unforeseen liquidation. By blowing up your account, you avoid the possibility of losing funds to continue playing the market.

What is benefit of leverage if the return is on equity bitmex

The concept of receiving equity in place of traditional funding is not a concept limited to Bitmex leverage. It can be seen in the traditional stock market and other areas of economics as well. As such, the associated dangers have been well documented.

Equity is essentially the amount of a given contract you own. As such, depending on the contract and the percentage of the equity, it can be more valuable than a standard return on your investment. Taking equity in favor or traditional returns will be contingent on your ability to read the market. If you're a virtuoso, then it can pay out enormously. Otherwise, consider playing it safe.

Tips for risk management

First, you're going to need practice. Do lots of different small trades in various market conditions to get the hang of things. Next, keep an eye on your leverage:when starting out, we recommend limiting your leverage severely. It's also recommended that you keep yourself limited to one market.

Your investment is at a greater risk of vaporizing under the pressure of shifting markets if its spread too thin. While starting out, keep yourself on just a few markets.

The most important tip that can be offered is to reconsider your relationship with leverage trading if you are new to cryptocurrencies. Those new to the practice won't be able to understand the subtleties of the market. As such, you will need to gain a comprehensive understanding of the many different currencies before trying your hand at leverage trading.


And with that, we have explained how to use leverage on Bitmex. Consult the above guide when playing the market, and we're confident you will find success on Bitmex. Remember to start small and learn every step of the way.


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