On BitMEX, the BCH derivative is in the form of a Futures Contract and allows traders to speculate on the future value of the Bitcoin Cash / Bitcoin (BCH/XBT) exchange rate. Traders need not have Bitcoin Cash to trade the futures contract as it only requires Bitcoin as margin.
BCH futures’ underlying is the BCH/XBT exchange rate on Poloniex as recorded in the .BCHXBT Index. The futures are quoted in Bitcoin and all margin and PNL calculations are denominated in Bitcoin.
|XBT Contract Value||Multiplier * Futures Price * 1 BCH|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multiplier * (Exit Price - Entry Price)|
All margin is posted in Bitcoin, that means traders can go long or short this contract using only Bitcoin. The BCH futures contracts feature a leverage of up to 20x.
For example, to buy 10 Bitcoin worth of contracts, you will only require 0.5 Bitcoin of Initial Margin.
The BCH futures contracts settle on the .BCHXBT30M Index Price.
A trader wants to goes long 10 XBT of BCH futures contracts. BCHX17 (the monthly BCH futures contract) trades at 0.10 XBT. As the leverage is 20x, the trader only needs 0.5 XBT of margin for this trade.
The trader must buy 100 contracts: 10 XBT / (0.10 XBT * 1).
A few days later, the price rises to 0.15 XBT and the trader sells all their contracts.
The trader’s profit will be: 100 * 1 * (0.15 - 0.10) = 5 XBT