Monero claims to be a secure, private, untraceable currency. It is an open-source technology, freely available to all and was launched on the 18th of April 2014, without a premine or instamine. The technology ensures privacy via Ring Signatures, which in short means that it is based on mixing transactions with other transactions. It was adopted by two large, darknet markets towards the end of August 2016. Monero has no block size limit nor any built-in reward halving and is denominated by the currency code XMR. Further information about Monero can be found here.
On BitMEX, the XMR derivative is in the form of a Futures Contract and allows traders to speculate on the future value of the Monero / Bitcoin (XMR/XBT) exchange rate. Traders need not have Monero to trade the futures contract as it only requires Bitcoin as margin.
The XMR futures’ underlying is the XMR/XBT exchange rate on Poloniex as recorded in the .XMRXBT Index. The futures are quoted in Bitcoin and all margin and PNL calculations are denominated in Bitcoin.
|XBT Contract Value||Multiplier * Futures Price * 1 XMR|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multiplier * (Exit Price - Entry Price)|
Traders who think that the price of XMR 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 XMR futures contracts feature a leverage of up to 25x.
For example, to buy 10 Bitcoin worth of contracts, you will only require 0.4 Bitcoin of Initial Margin.
The XMR futures contracts settle on the .XMRXBT30M Index Price. Settlement will occur on the last Friday of the Settlement Month.
A trader wants to goes long 10 XBT of XMR futures contracts. XMRM17 (the XMR futures contract expiring in June 2017) trades at 0.0200 XBT. As the leverage is 25x, the trader only needs 0.4 XBT of margin for this trade.
The trader must buy 500 contracts: 10 XBT / (0.0200 XBT * 1).
A few days later, the price rises to 0.0250 XBT and the trader sells all their contracts.
The trader’s profit will be: 500 * 1 * (0.0250 - 0.0200) = 2.5 XBT