BitMEX offers Inverse Futures Contracts on Bitcoin against USD. The XBT Futures Contract allows traders to get exposure to the future value of the Bitcoin / USD (XBT/USD) exchange rate.
The XBT futures’ underlying is the .BXBT Index. The futures are quoted in USD and all margin and PNL calculations are denominated in Bitcoin.
|XBT Contract Value||Multiplier / XBTUSD Price|
|USD Contract Value||1 USD|
|PnL Calculation||# Contracts * Multiplier * (1/Entry Price - 1/Exit Price)|
Traders who think that the price of XBT will rise will buy the futures contract. Conversely, traders who believe the price will drop will sell the futures contract.
All margin is posted in Bitcoin, that means traders can go long or short this contract using only Bitcoin. The XBT futures contracts feature a leverage of up to 100x.
For example, to buy 100 Bitcoin worth of contracts, you will only require 1 Bitcoin of Initial Margin.
A trader wants to go long 10 XBT of XBT futures contracts. XBTU20 (the XBT futures contract expiring in September 2020) trades at 10,000. As the leverage is 100x, the trader only needs 0.1 XBT of margin for this trade.
The trader must buy 100,000 contracts:
10 XBT * (10,000 USD * 1).
A few days later, the price rises to 10,500 and the trader sells all their contracts.
The trader’s profit will be:
100,000 * 1 * (1/10,000 - 1/10,500) = 0.4762 XBT.