Cryptocurrency trading platform BitMEX allows its users to leverage their positions – in other words, place orders that exceed their current balance. Leveraging is a popular option, because it can generate a higher profit, compared to placing an order that is under your existing balance. This is referred to as “Margin Trading.”
Types of Margin Trading
There are two types of margin trading: cross-margin trading and isolated trading. The former allows traders to use their entire balance to hold their position after placing an order, making it relatively risky. With the latter, you can choose how much money to use to hold your position, but you can’t use the full amount.
This trading platform makes it possible to use the leverage slider to set your leverage level. The maximum admissible leverage is 1:100, which is extremely high for cryptocurrencies. In comparison, 1:20 is the average offered by other platforms.
There are tools such as AntiLiquidation that can calculate leverage. It can save users up to three-quarters of their capital in losing trades. You can attain up to 700x leverage using tight Stop placement. The tool is configurable, so users can enter their risk numbers of choice. It will calculate the size of your position depending on entry price, the amount you are prepared to lose, and the distance to Stop.
Super-High Leverage Trade
Some users choose to create high-risk trades in the hopes of a higher payout. There are two options here too: a standard 100x trade or a synthetic 100x trade. The latter offers the same return as the former, only the risk is lower. If the trade goes wrong, you will lose twice as much if you chose the standard.
It logically follows, then that the synthetic 100x trade is the more recommendable option of the two. Here is how to perform one.
Synthetic 100x Trade
To create this trade, you first need to open a position by clicking on the “Limit Order” tab with leverage of less than 10x. Check your liquidation price with the integrated BitMEX calculator based on your selected entry price and with leverage of 100 x.
The Stop Price should be a slight improvement on the 100x liquidation price checked earlier. This will depend on the Bitcoin exchange rate at that given point in time.
The last step to take is setting up the target Exit trade. Then, you can leave the trade to take care of itself.