BitMEX offers Linear Futures Contracts in Bitcoin. This allows exposure to the price of an asset, without needing to hold the asset directly as it only requires Bitcoin as margin.
The following information assumes usage of the “COIN/XBT” futures contract as an example. Information is generalisable to all Linear Futures, but some may have different multipliers. Please check the contract specifications directly for that information
COIN futures’ underlying is the COIN/XBT exchange rate as recorded in the underlying Index. The futures are quoted in Bitcoin and all margin and PNL calculations are denominated in Bitcoin.
|XBT Contract Value||Multiplier * Futures Price * 1 COIN|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multiplier * (Exit Price - Entry Price)|
All margin is posted in Bitcoin, which means traders can go long or short this contract using only Bitcoin. Most Linear Futures feature a leverage between 20x and 50x.
Futures contracts settle on a 30 minute Time Weighted Average Price (“TWAP”) on the underlying Index . Settlement will occur on the last Friday of the Settlement Month, subject to the Early Settlement
A trader wants to go long 10 XBT of COIN futures contracts, which trades at 0.000010 XBT. As the leverage is 20x, the trader only needs 0.50 XBT of margin for this trade.
The trader must buy 1,000,000 contracts:
10 XBT / (0.000010 XBT * 1).
A few days later, the price rises to 0.000015 XBT and the trader sells all their contracts.
The trader’s profit will be:
1,000,000 * 1 * (0.000015 - 0.000010) = 5.0 XBT