Creators of FTX are traders themselves, trading a variety of ETFs, currencies, futures and equities. The team came from leading Wall Street quant firms and tech companies such as Jane Street, Susquehanna, Optiver, Google, and Facebook. FTX is also in partnership and collaboration with a number of cryptocurrency firms such as Circle, True USD, Paxos, Fenwick and West, Proof of Capital, Galois Capital, Sequoia, and a lot more. One of the goal FTX also have is to donate to the world’s most effective charities such as Effective Altruism, Give Well, The Humane League, and OpenAI.
The cryptocurrency derivatives exchange offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. The team behind this project strives to develop a platform robust enough for professional trading firms and intuitive enough for first-time users.
FTX is a Bahamian cryptocurrency exchange. It was established in Antigua and Barbuda and has its headquarters there. As of July 2021, the exchange had over one million users and an average daily trading volume of $10 billion. FTX also runs FTX.US, a separate exchange for residents of the United States. It was established with the intention of making as much money as possible to donate to charitable causes, in accordance with the earning to give principle of effective altruism.
Cryptocurrency Derivatives
Simply explained, a derivative is any good or contract whose value is based on an underlying asset. Derivatives are based on assets such as equities, bonds, interest rates, commodities, fiat currencies, and cryptocurrencies in traditional financial markets, hence the name.
In the same way that traditional derivatives operate, a buyer and a seller must engage into a contract in order to sell the underlying asset. These assets are sold at a defined price and time. Derivatives rely on the value of the underlying asset rather than having an inherent worth. An Ethereum derivative, for instance, depends on and derives value from the value of Ethereum.
The underlying asset is not held nor owned by derivative deals. Futures, options, and perpetual contracts are the most common derivatives in the cryptocurrency market.
What FTX Exchange offers?
Over a hundred Spot markets
Over 250 perpetual & quarterly Futures markets
ERC20 assets that can give you Leveraged exposure to crypto markets
Daily, weekly & quarterly move contracts, plus BVOL/IBVOL Volatilty tokens
Prediction Markets – markets on the outcome of real-world events
FTX Pay – a fast, secure, and low-fee payment processor
Leveraged Tokens in FTX
Daily Rebalancing
Tokens that have been leveraged rebalance once daily and after being four times leveraged.
Leveraged tokens will lower risk when they lose and reinvest gains when they win due to the daily rebalancing.
As a result, a +3x BULL token will fluctuate around three times as much as the underlying each day. Due to rebalances, leveraged tokens will perform better than the underlying over longer time periods if markets show momentum (i.e., successive days have a positive correlation) and worse if markets show mean reversion (i.e. consecutive days have negative correlation).
Create or Redeem Leveraged Tokens
You can create any of the tokens using USD, and you can exchange any of the tokens for USD.
The underlying futures positions are not delivered; rather, you receive cash in the amount of the market value of the underlying positions. Similar to that, you send USD in an amount equivalent to the market value of the positions that the token owns in order to generate them rather than providing futures positions.
Fees
To produce or redeem a token, you must pay 0.10 percent. A daily administration fee of 0.03 percent is also charged by tokens.
Instead, you will pay the same exchange costs on all other markets if you trade on the spot markets.
Cryptourrency Futures in FTX
BTC, ETH, EOS, XRP, and USDT are just a few of the coins FTX lists as futures. There are three futures contracts associated with each coin: one that expires this quarter, one that expires next quarter, and one that is permanent.
What distinguishes them from other futures? The following are some ways that the futures published on FTX differ from other significant cryptocurrency futures:
Stablecoins are deposited as collateral for all FTX futures, and your PNL is settled in them, making FTX futures stablecoin settled. As a result, you receive authentic USD-based price exposure and settlement without the requirement for a bank account, and you can easily switch between different contracts by using the same base currency as collateral.
A special backstop liquidity provider scheme for FTX futures intervenes to give to accounts in jeopardy of bankruptcy, assisting in avoiding clawbacks.
FTX is a relatively new cryptocurrency exchange that has gained a reputation for being a reliable and feature-rich trading platform. It houses a variety of derivatives to trade in the platform. FTX is built both for seasoned traders and cryptocurrency beginners as well.
Making a great short strategy depends on your level of risk aversion. Here are a few typical examples:
Trends catching/following strategy
Trend Following is a trading practice that aims to capture trends across all markets, using proper risk management. This methodology works because emotions, greed, and fear are one of the driving forces behind markets. A trend will occur when one side is in control, and those who follow trends can profit from this occurrence.
American stock trader Jesse Lauriston Livermore believes that there are repeating patterns in price movement. He said that they are recurring patterns that appear over and over, with slight variations. Livermore reasoned out that markets are driven by humans, and human nature never changes.
Breakouts swing strategy
Breakout trading can be exciting but can also be painful. It is exciting because most of the time, breakouts make price quickly move in your favor. However, if the price does a 180-degree reversal from what you expect, it will result to a great loss. Ouch!
A breakout strategy seeks to enter a trade as soon as the price succeeds in breaking out of its range. Strong momentum is what traders are searching for, and the real breakout is the signal to enter the position and profit from the market action that follows.
Trading positions can be taken at market, which requires close attention to price movement, or by putting buy stop and sell stop orders. Typically, they will set the stop just above the previous support level or below the last resistance level. Traders may make use of traditional support and resistance levels to determine their exit targets.
Breakdown swing strategy.
The opposite of a breakout strategy is a breakdown strategy. You enter a trade early in a downtrend while waiting for the price to “breakdown” (also known as a downside breakout). As soon as a price breaks through a crucial support level, you enter a position.
Fading trading strategy.
Fading strategies involve placing trades against the current trend in order to profit from a reversal. For instance, if a coin’s price is particularly high, a trader can open a short position in the hope that the price will drop again. Or, if a coin’s price is unusually low, a trader might make a long trade.
Three underlying presumptions support the fading strategy:
Overbought at the current price (or oversold).
Early buyers (or sellers) are ready to reap rewards.
There may be risk for current holders (or short sellers).
Technical indicators, such as the Relative Strength Index, are frequently used to identify overbought or oversold positions (RSI). As early buyers (or sellers) take profit off the table, momentum may start to shift. Additionally, these developments can prompt current holders (or shorts) to reevaluate their holdings.
These coinditions are frequently made worse by a particular tipping point, like an earnings report. Other traders may buy the coin in response to an optimistic earnings announcement, but eventually this reaction becomes over-extended, and a mean-reversion occurs.
Before you can borrow funds and start trading with leverage on Bybit, you must first make a deposit into your wallet or trading account. Exchanges refer to the initial capital the trader offers as the collateral. The amount of collateral necessary is determined by the leverage the trader employs and the overall value of the position they wish to open (known as margin). After that, you can select your trade settings, such as the trade direction (long or short), margin amount, and leverage, by going to the margin trading tab.
Order Types on Bybit
Market orders
Market-taking orders are another name for these orders. They are carried out immediately without waiting for the order book. Fast-moving markets are best suited for this kind of order.
Limit orders
These purchases are sometimes referred to as market-making purchases. They rest on the order book and add liquidity, but they are not immediately executed. They are appropriate for circumstances in which there is little need for urgency.
Conditional orders
These are more complex orders where you can set criteria that must be satisfied in order for them to be implemented. In addition to market and limit orders, conditional orders have the following features:
Close on trigger
This guarantees that, regardless of what occurs, your stop-loss order will be carried out when the price reaches the order point.
Post-only order
Your limit orders will be canceled using this feature if they are not instantly executed at the order price. It guarantees that dealers receive a discount on order pricing (as is customary for limit orders)
Reduce-only order
By using this order type, you can avoid accidentally placing a sell order. To avoid selling your position mistakenly when the market returns to your take-profit point, the system will automatically cancel the order if you have set stop-loss and take-profit orders for a particular trade and the stop-loss strikes before the take-profit.
Select the kind of contract you want to trade. There are three contract types to choose from:
USDT Perpetuals
Inverse Contracts
USDC Perpetuals
Select the pair you want to trade.
Then, choose your order type. There are three order types you can select from:
Limit orders
Market orders
Conditional orders
Then enter required variables such as “Order Price” and “Order Quantity” and “Leverage” click “Open Long” on the left side of the screen to open a long position. Next, enter your ‘Take Profit’ and ‘Stop Loss’ values, and click on “Submit.
To start a short position, select the type of contract and pair you want to trade under “Derivatives” on the exchange website, enter required variables such as price, size, and leverage, then click “Short/sell” on the right side of the screen. Next, enter your ‘Take Profit’ and ‘Stop Loss’ values, and click on “Submit.
Bybit is a great platform for seasoned cryptocurrency traders seeking for an exchange with more advanced features. There are many user-friendly exchanges with straightforward interfaces available right now to help new investors get started in the cryptocurrency market, but such are typically not suitable for serious traders.
Bybit claims to be the fastest-growing cryptocurrency exchange today with over 6 million registered users. The website allows users to buy, sell and trade popular coins on their Spot and Derivatives platforms. It also focuses on margin trading, offering up to 100x leverage on BTC/USD and ETH/USD trading pairs.
Bybit was established in Singapore in March 2018 and is made up of experts from the investment banking, technology, and currency sectors as well as early blockchain users. It is a registered trading exchange in the British Virgin Islands, and is still growing in number of users.
The exchange offers a fully-featured platform with spot trading, derivatives trading, and margin trading with up to 100x leverage to satisfy the needs of the most discerning cryptocurrency trader. Although packed with features and very detailed, the advanced charting interface is simple to use. Bybit offers the critical option of taking profit/stop-loss orders, which is not available on all margin trading platforms but is crucial for reducing losses. If you’re serious about margin trading, Bybit is undoubtedly a crypto exchange to take into account.
Leverage Trading in Cryptocurrency
Leverage in cryptocurrency trading refers to placing trades with borrowed funds. Trading using leverage can increase your buying or selling power and enable you to transact larger sums. As a result, you can conduct leveraged trades even with a modest amount of beginning cash by using it as collateral. Leveraged trading can increase your potential gains, but it also carries a high risk, particularly in the erratic cryptocurrency market. Use caution when trading cryptocurrencies with leverage. If the market moves against your position, it may result in large losses.
The trader’s purchasing or selling power is increased, allowing them to transact with more money than they presently have in their wallet. They could be able to borrow up to 100 times their account balance depending on the cryptocurrency exchange they use to trade.
A ratio is used to describe the amount of leverage, such as 1:5 (5x), 1:10 (10x), or 1:20. (20x). It displays the multiplicity of your starting capital. Consider opening a $1,000 bitcoin position with $100 in your exchange account as an illustration (BTC). Your $100 will have the same purchasing power as $1,000 with a 10x leverage.
Overview of Margin Trading in Bybit.
Trading using leverage enables a trader to open long and short positions and to go long or short beyond his available funds. If a trader uses more than 1x leverage, both profit and loss will be accelerated. Margin is the amount of money needed to open a leveraged position.
Leverage and Margin
Initial & Maintenance Margin
Initial Margin is the initial margin needed to open a trade, which is based on leverage and position size. The phrase “maintenance margin” refers to the minimal sum necessary to maintain a leveraged position and establishes the precise price at which a position will be liquidated.
Initial Margin (IM)
IM Requirement for Buy/Long Orders: [Contract Value*Min (Buy/Long Limit Order Price, Best Ask Price)]/Leverage. Order will have a 0.060 percent two-way taker fee (fee to open + fee to close). The nature of the order and the execution price will be used to determine how much the actual trading fees will be.
IM requirement for sell/short orders: [Contract value*Max (Sell/Short limit order, best bid price)/Leverage]. Order will have a 0.060 percent two-way taker fee (fee to open + fee to close). The nature of the order and the execution price will be used to determine how much the actual trading fees will be.
No IM will be posted if an order does not expand the size of the current position.
The system will use Max [Buy order IM (X), Sell order IM (Y)] as the account IM if a trader holds Buy and Sell positions or orders simultaneously. If X = 200 and Y = 150, the account IM will be 200. There is no need for additional margin if the trader places a second sell order with an order cost of less than $50. It will, however, take an additional 20 margin (220-200) to place the additional sell order if the cost of the additional sell order is 70, resulting in Y=220.
Maintenance Margin (MM)
The maintenance margin rate (MMR) of the position is used to determine maintenance margin (MM). As the margin tier rises, the MMR of each position also rises.
The required maintenance margin for all positions is equal to MMR * Contract value at the open position price. The required maintenance margin will also include the taker fee for closing the deal. This is the bare minimum margin needed to keep a position open. The position will be liquidated if the margin available in it is less than the maintenance margin.
Isolated Margin & Cross Margin
On Bybit, traders have the option of using cross margin or isolated margin method.
Cross Margin
To avoid liquidation, the entire available margin of the relevant asset type may be pulled.
Isolated Margin
The original margin and extra margin are the position’s maximum loss in isolated margin mode (if any). No further margin will be drawn to the position in the event that the position is liquidated. Traders can manually add more margin to a single position, which lowers the effective leverage and raises the price at which the position is liquidated. All previously posted additional margin will be reset to zero once position leverage has been changed.
Setting & Adjusting Isolated Margin
Cross margin mode is enabled by default. Traders can select their preferred leverage and switch to isolated margin mode. The lower the margin needed for this position, the higher the leverage.
Liquidation Process
To prevent liquidations brought on either insufficient liquidity or market manipulation, Bybit implements fair price marking.
Traders may increase the risk limit to a higher tier in order to open a larger position. Higher margin is needed for a higher risk limit.
Bybit employs partial liquidation to lower the necessary maintenance margin when liquidation occurs in order to prevent full liquidation. The liquidation procedure is as follows.
Traders under the lowest risk limit
This contract’s active orders will all be canceled;
The position will be closed at the bankruptcy price by the liquidation engine if it still doesn’t fulfill the maintenance margin criteria.
Traders under second or higher risk limit
The liquidation engine will make an effort to reduce the trader’s risk tolerance level in an effort to reduce the margin requirement:
Maintain the current position and open orders, and if at all possible, minimize the trader’s direct risk limit;
Reduce the risk limit by canceling all active orders while keeping the current position;
Submit a FillOrKill order with the difference between the value of the current position and the risk limit value to meet the margin requirement and stop further liquidation;
All positions must be acquired by the liquidation engine at the bankruptcy price if the position is still under liquidation.
Insurance Fund
The remaining margin will be contributed to Bybit’s insurance fund if it can close the liquidated position for more money than the bankruptcy price.
Bybit will draw on the insurance fund to cover the loss if it is unable to liquidate the position at a price higher than the bankruptcy price. ADL will be activated if the insurance fund is insufficient to cover the loss.
Bybit uses the insurance fund to stop traders from automatically deleveraging their positions.
To learn how to trade on Bybit step-by-step, click on the link below:
Bybit is a great platform for seasoned cryptocurrency traders seeking for an exchange with more advanced features. There are many user-friendly exchanges with straightforward interfaces available right now to help new investors get started in the cryptocurrency market, but such are typically not suitable for serious traders.
Bybit Exchange is a cryptocurrency derivatives exchange that provides a fair trading environment for highly leveraged futures transactions such as BTC/USD, ETH/USD, XRP/USD, EOS/USD, and BTC/USDT perpetual contracts. According to our Bybit review, the cryptocurrency exchange operates and provides a safe, fair, transparent and efficient futures trading platform.
While there are many similarities between exchanges, Bybit incorporates some differentiators that may make them interesting.
Bybit exchange offers three contract options for trading derivatives, including Bitcoin and other cryptocurrencies: ‣ Inverse Permanent ‣ USDT Unlimited ‣ Futures within futures
It provides comprehensive access to various trading tools, including cross margin trading and isolated margin trading. Bybit offers 100x leveraged trading, which cannot be customized with the cross margin option.
Bybit supports limit orders, conditional orders or conditional limit orders, stop orders and advanced orders such as good till cancel, immediate or cancel (IOC orders), fill or cancel. The advanced order form is easy to use and easy to access.
It offers a variety of data analysis tools for accessing data, including moving average prices, moving average indicators, and monthly price ranges. Fund data, individual index prices, rolling volatility charts, daily realized BTC volatility, market analysis and breaking news are all included.
It provides the cryptocurrency community with a superior trading experience through an easy-to-use interface.
Perpetual Futures and The Dual Price Mechanism
Unlike spot and futures contracts, a perpetual futures contract is a derivative that does not expire. It helps maximize yield prospects. When Bybit connects to the MetaTrader 4 forex platform, it intends to offer quarterly futures contracts and sub-accounts. The dual price mechanism protects traders from trading or price manipulation, thereby avoiding huge losses due to liquidation of positions due to lack of margin or requirements of current market prices.
Mark to Market Price of Bybit
The substantial difference between the current and derivative cryptocurrency exchange rates is referred to be “funding.” By designating the most recent asset traded price on the cryptocurrency platform as the “mark price to market price,” it facilitates the matching of spot and derivative exchange prices once every eight hours.
Trading with 100X Leverage
Bybit offers 100x leverage on contracts for perpetual futures. Therefore, most traders are able to increase their leverage in order to reach the necessary maintenance margin. It enables knowledgeable traders to access substantial assets.
Contract Loss Protection
If the price falls below the bankruptcy price in a highly volatile market, a leveraged long or short position could be liquidated. When traders are liquidated, the Bybit Insurance Fund helps them pay for deficits brought on their losses.
System of Socialized Loss vs. System of Auto-Deleveraging (ADL)
ADL may deleverage the order’s most lucrative and leveraged positions, so shielding traders from unusual losses. Leverage and unrealized profit ratio are used to calculate each investment’s ADL grade.
Pros and Cons of Bybit
Pros
A new user does not require KYC. It is simple to begin trading.
It offers both computer-based trading and a mobile app alternative for logging in and trading.
Bybit leverage is extremely high, with low trading costs and a market maker rebate.
Has a guarantee from the Insurance Fund to reduce and pay losses.
Limit orders, partial orders, conditional orders, and market orders are all conceivable order types.
Derivative contracts are paid in USDT and Coin.
Bonuses are generous.
It is one of the top three established exchanges in terms of crypto derivatives trading volumes.
When compared to other exchanges, Bybit fees are among the lowest.
Cons
The number of available trading pairs is restricted.
Regulation is lacking.
Citizens of the United States are not permitted to trade.
Trading volume figures cannot be independently checked to confirm their veracity.
Bybit Account Opening Process
As per the Bybit, a new user needs to have a trading account before using the platform.
Registration Using Website
On the official website, go to the registration page.
Fill in the required details.
Read all the terms and conditions and click on ‘Sign Up.
Registration Using Mobile App
Download Bybit App. Select ‘Assets’ on the bottom right corner.
Click on the ‘Login’ tab.
Click on the ‘Register’ tab on the top right corner.
Register either through the Email or Mobile option.
Click on the ‘Sign Up’ tab.
Verify a code sent to the Email/account’s registered Mobile number.
The Bybit app does not allow users from nations that are forbidden by FATCA (Foreign Account Tax Compliance Act) to register.
Bybit Payment Methods
For credit payments or deposits into their account, Visa, Mastercard, Electronic Fund Transfer or Wire Transfer, and Bill Payment options are available. Banxa, Xanpool, Mercury, MoonPay, and Bybit work together to make fiat money payments easier. By selecting the ‘Assets’ option in the bottom right-hand corner, mobile app users may deposit money.
Bybit Fees
Users can be either “Makers” or “Takers,” with market makers providing liquidity and market depth while squeezing order book liquidity. Takers’ orders are filled like a market order, while Makers’ orders are not immediately fulfilled. Market makers are paid for increasing the market’s liquidity and depth.
Instead of charging fees to Makers, Bybit charges a maker fee (rebate) of 0.025 percent, while Takers are subject to a cost of 0.075 percent. The net cost of the Bybit platform is 0.05 percent. By entering your wallet address and clicking the withdrawal button, you may make three cash withdrawals each day. For Bybit, the maximum withdrawal is 10BTC.
Services Provided by Bybit Exchange
With up to 100x leverage on the perpetual swap future contract for bitcoin, Bybit now offers trading strategies or options in the Inverse Perpetual Contract, USDT Perpetual, and Inverse Contract in Bitcoin, EOS, Ethereum, and Ripple XRP. All of the currencies they trade, including BTC, ETH, EOS, and XRP, are accepted as deposits.
Bybit Promotions
Rewards Hub
For new signups, there is a $50 coupon for the first-time deposit within 48 hours and a $10 coupon after that, a $5 bonus on a BTC deposit, and a $5 discount for following Bybit on social media channels or networks. It is a user-friendly exchange that also holds trading competitions with huge cash prizes for the victors.
Affiliate Program
The Bybit affiliate program allows users to make a passive income of up to 30% commission on Bybit trading costs. It offers complete assistance, commissions are handled in real time, and data is updated immediately. A multi-dimensional report with entire transaction data and commission information is created. Bybit offers affiliates custom marketing materials and market activities.
Flash Deals
$10 coupon for seven consecutive days of active usage, $20 coupon for a total deposit of one or more bitcoins, $5 coupon for at least one use of the Taking Profit/Stop Loss tool, and $5 coupon for trading at least one USDT perpetual excluding BTC, USDT.Referral Program
Referral Program
The referral program aims to reward active traders who introduced or referred friends and family to Bybit with a financial incentive. Traders can receive an instant bonus of $10 in BTC. The referral bonus earned based on the trade volume of a newly introduced user is shown in the table below.
Bybit bonus can either be used as an initial margin or initial maintenance margin to cover losses or offset the trading fee. Bonus as such cannot be withdrawn. However, the profits derived from trading with bonuses can be withdrawn. As soon as the referee becomes qualified, the bonus is deposited immediately in the trader’s Derivatives Account, which refers to the new user.
Bybit Calculator
Bybit Calculator equips a trader to monitor his position value and position size closely and calculate important trading parameters that indicate the performance in terms of profit/ loss and risk management. Traders can calculate the following using the Bybit Calculator: Trader’s initial Margin or first deposit, Profit/ Loss, Profit/ Loss %, and ROI, Initial deposit Margin required to open a position, a target price, a trigger price, or the best price to achieve a predetermined ROI, Liquidation Price when the position is on isolated margin option or cross margin mode, account balance, funding rate/funding fees, price difference, underlying margin.
Bybit Trading Bot
Trading bots are automated software that trades as per the pre-set conditions by experienced traders. Some trading bots that enable a trader to auto trade in Bybit are TradingView, 3Commas, Alertaton, Autoview, Cornix, FMZ, GoodCrypto, Haasonline Hydor, Mudrex, Profit Trading, ProfitTrailer, Profitview, Sirius Trader, Stacked, TokenBot, Tycoon, Wunderbit, and WBCCLUB.
Bybit Testnet
Bybit testnet enables a potential trader to better understand the key features, options, advantages, and pros and cons without making a deposit. It’s a virtual account provided solely to practice crypto trading with fake money. A new user could explore for informational purposes and have a hands-on experience without actually exposing oneself to the risk of losing money.
Bybit Mobile App
The mobile app is fully compatible with the most advanced Android and iOS systems and can be downloaded from the Google play store. Like desktop, one can buy cryptocurrencies like Bitcoin, Ethereum, and other coins through the app, either using a credit card, debit card, or a bank transfer. Though it’s a bit challenging to study TradingView charts and monitor numerous markets on the app, it’s a good tool for monitoring open positions. The crypto account is fully secured through a multi-signature cold storage wallet solution. One can choose to trade various trading pairs like BTC/USD, ETH/USD, XRP/USD, EOS/USD, BTC/USDT, and other perpetual trade contracts. It processes 100,000 transactions per second which ensure the fulfillment of every trade order.
Bybit Security Parameters
Bybit spends 20% of its annual budget on ensuring the platform’s security against the industry average of 15%. Unlike most other exchanges that use ‘hot wallets,’ it has adopted ‘cold wallets,’ which have inbuilt robust security management, features, and measures. All deposit addresses are cold wallet addresses. Offline signatures carry on underlying Asset transfers and withdrawals. Withdrawal requests are subject to three levels of verifications and manual reviews per day to manage risk, and traders can withdraw once every eight hours.
Bybit has a stringent policy regarding crypto-asset consolidation, including system security, physical environment security, operation authentication, encryption techniques, monitoring, and audit. It protects user data and personal information, which is in line with its privacy policy. Each employee of the platform is thoroughly trained, scrutinized, and assessed for internal security control.
The exchange always insists the user have two-factor authentication. The user has to scan the QR code, and a six-digit 2FA code is generated randomly inside the Google Authenticator App. Users should write down the Recovery Key Phrase and store your RKP securely inside a cloud server with full SSL encryption.
