ByBit is one of the industry’s leading exchanges and one of its interesting features is Cross Leverage ByBit trading. ByBit allows traders to make high volume trades, up to 100x leverage on their Bitcoin perpetual swap futures. However, you require extensive background knowledge to opt for margin trading on ByBit.
Here are the fundamentals of Cross Leverage ByBit and things you should be aware of when considering the medium of margin trading.
What is ByBit?
ByBit was established in 2018 and is registered in the British Virgin Islands.
It is a cryptocurrency futures trading platform and perpetual swap futures are their only product. ByBit allows exchange between only four supported currencies on their platform. Moreover, they restrict their users to sell or purchase cryptocurrencies via fiat payment methods.
This narrow focus on perpetual swap futures works well for ByBit, however, and they have seen a steady increase in their trading volume in the last year. ByBit’s main competitors are other crypto derivatives platforms like FTX and BitMEX.
Cross Leverage ByBit Trading: Overview
Nowadays margin trading is popular and highly liked by experienced investors because it allows them the flexibility to get higher returns by investing little capital. At cross leverage ByBit you can use up to 100x leverage to increase the returns from margin trading. Although, if the market starts to move in the opposite direction then the losses are huge as well.
The process for margin trading is quite simple at first add funds to ByBit wallet and then go to the margin trading tab then opt for long/ short. There you must select your collateral or initial margin. Once done adjust the leverage you want then the platform itself provides the funds to open a position. There are two options when it comes to margin trading Isolated Margin trading and Cross Leverage ByBit trading.
- ByBit isolated margin trading: With this trading, you can only put funds of a particular position at risk. In case there is fluctuation in the market then there will be no risk to your available balance, as the platform will not deduct anything from your account, but you will have to add more funds or might face liquidation.
- Cross leverage ByBit trading: Here the platform utilizes user available balance to prevent liquidation. If the market goes sideways, then cross-margin trading can cost you more than your initial capital.
- Leverage at ByBit: It offers maximum leverage of 100x on the cross and isolated margin trading.
Moreover, ByBit provides margin trading in three different contract options:
Bybit supports inverse perpetual contracts in BTCUSD, ETHUSD, EOSUSD, and XRPUSD. As BTC or any other financial asset will be the trader’s base currency/initial margin. Also, the trader is required to own that asset for using inverse perpetual.
The phenomena here are quite simple, if you do not own ETH, then you cannot trade ETHUSD perpetual contracts. Although, there is an asset exchange specification available on ByBit that you can opt for to trade an asset you possess for ETH and then use ETHUSD perpetual contract.
ByBit margin trading utilizes a linear contract in USDT. These USDT perpetual contract further uses stable coin as collateral/margin, meaning the trader does not need to hedge positions. It supports USDT perpetual contract in BTCUSDT, ETHUSDT, LINKUSDT, BCHUSDT, etc.
Currently, ByBit established its inverse futures contract in BTCUSD0625, and the company is also planning to introduce another contract, BTCUSD0924 in the market. Traders here can use one BTC margin trading account across both BTCUSD perpetual and futures contracts.
Risks with Cross Leverage ByBit Trading
Cross leverage ByBit trading seems quite convenient because it allows you to attain maximum profits with minimal capital. However, like any coin it also has two sides. In case things go south in the crypto market then potential losses may also incur costing you liquidation. Hence here are some highlighted risks associated with margin trading that you must consider before investing.
- At ByBit you can only opt for single100x leverage, which increases your chances of incurring a loss by several times.
- You cannot leave your screen after placing a margin order, because of market fluctuations.
- The higher the leverage you use, the higher will be your chances of suffering a liquidation.
- You should practice hedging to avoid unnecessary losses. However, It provides hedging only in the futures contract.
It’s entirely devoted to providing top-notch margin trading services to its users. Many features might act as a lifesaver to a trader, and at the same time, overwhelming to a beginner.
Are You Looking for a Simpler Yet Smarter Way to Trade?
If you’re willing to invest your time and money in the financial markets but aren’t sure you have the experience or time then PrimeXBT Covesting is the best perfect solution for you.
This is one of the top crypto exchanges for beginners. It allows users to opt for copytrading, which means copying the trades of experienced traders without actively participating and keeping track of the market. Once you copy the trading portfolio of a trader you can sit back and enjoy the same returns that are generated for the expert’s portfolio.