BitMEX Alpha: Cash and Carry with Futures

Note: The following is not financial advice, but rather an invitation for users to learn more about trading strategies. Users are always advised to research as much analysis as possible before making any trade. The information below is not intended to provide guaranteed profits, and BitMEX will not be liable if your trades do not produce the results you expected.

A few days ago, Bitcoin finally hit a new all-time high of 69,409.5 (according to the XBTUSD contract). We would like to see more ATH on BitMEX Alpha, but other options are also available.

Amid the recent cryptocurrency market excitement fueled by the return of retail traders, strong inflows into Bitcoin ETFs, and expectations of an imminent interest rate cut, futures contracts are trading at a huge premium to the spot market.

This means there is a good opportunity for basis trading in forward futures. It’s simple. Trade spot and futures sales and hold until the contract expires to earn the base profit (difference)!

We have put together a list of futures contracts that you can trade alongside spot on BitMEX to make money. The focus this week is the 80% one-year ETHUSDTH24 contract as ETH continues to hit new yearly highs in line with ETF expectations.

Are you already actively trading on BitMEX and would like to have more capital for profitable trading? You can apply for the Margin+ program, which provides additional funds in the form of Bitcoin or Tether so you can trade more frequently and in larger quantities. Learn more about the Margin+ program here. https://blog.bitmex.com/margin-plus/.

What do we have?

The table below lists BitMEX’s futures contracts and the basis (%) they can receive*.

*Note: Figures are current at the time of writing.

How to take advantage of the opportunity?

1. Buy tokens (long position) on-site or through conversion.
2. Sell ​​tokens (short position) in the form of a futures contract.
3. To realize the profits received, hold the futures contract until expiration.
4. Sell ​​tokens on-site after futures expire.

For a step-by-step guide to basic trading of futures and spot contracts, see “1. Please refer to ‘Futures Trading and Spot Trading’. article.

What is the profit potential?

The amount received will be your benefit. You must hold your trade until the futures contract expires to receive the full amount.

What should I consider?

• Entry and exit costs for both trades, such as transaction fees and slippage.
• There is execution risk when simultaneously trading spot and futures contracts, especially during periods of market volatility.
• There is a risk of liquidation given that the contracts mentioned above can be traded with leverage of up to 100x. If the market price rises above the liquidation price, resulting in an unhedged spot position, your position may be liquidated. If you decide to use high leverage for your trading, you should monitor market conditions closely and fund your wallet to meet your margin requirements. Alternatively, you may choose to trade with lower leverage to reduce liquidation risk.

For quanto futures

• To purchase spot assets, you need USDT (Tether). Perpetual contracts require additional XBT (Bitcoin) as margin.
• Keep in mind that quant contracts are margined and settled in XBT (Bitcoin), so you are still exposed to XBT/USD price risk when trading quant contracts. To hedge price risk, we recommend using a short position on the XBTUSD or XBTUSDT contract.

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