Wallets&Exchanges

BitMEX Alpha: Cash and Carry with Dated Futures

Note: Anything expressed below is not considered financial advice – they are only suggestions for users to learn more about trading strategies. Users are always encouraged to do as much research as possible before executing any trades. The content below is not intended to express any guaranteed return, and BitMEX does not take responsibility should your trades not perform as expected.  

A few days ago, Bitcoin finally marked a new all-time high of 69,409.5 (as printed on our XBTUSD contract). As much as we’d like to see more ATHs here at BitMEX Alpha, we’ve got other opportunities under our sleeve. 

With the recent frenzy in crypto markets, driven by a combination of retail traders coming back, strong inflows to Bitcoin ETFs, and heightened anticipation of an imminent rate cut, futures contracts are trading at a decent premium as compared to spot markets. 

Which means good basis trading opportunities with our dated futures. It’s simple – long spot, short futures, and hold till the contract’s expiry to realise the basis captured! 

We’ve compiled a list of futures contracts on BitMEX you can trade alongside spot to make returns. In the spotlight: our ETHUSDTH24 contract with a 80% annualised basis this week with ETH continuing to make new yearly highs on ETF anticipation.

Already an active trader on BitMEX and want more capital to execute these profitable basis trades? Apply for Margin+, where we provide extra Bitcoin or Tether for you to trade more and bigger. Learn more about Margin+ here.

What’s On the Table? 

The table below shows a list of dated futures contracts on BitMEX and the basis you can capture (%)*. 

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

Contract

Expiry

Price

Payout Type

Day Count

Diff

Basis

Annualised

ETHUSDH24

3/29/2024

4082.35

Quanto Futures

21

182.15

4.67%

80.06%

XBTH24

3/29/2024

68086

Inverse Futures

21

1239

1.85%

31.77%

XBTJ24

4/26/2024

71130

Inverse Futures

49

4283

6.41%

47.07%

XBTM24

6/28/2024

70661.5

Inverse Futures

112

3814.5

5.71%

18.34%

XBTU24

9/27/2024

73800

Inverse Futures

203

6953

10.40%

18.45%

How to Execute the Opportunity? 

Buy (long) the token on Spot or Convert.
Sell (short) the tokens as futures contracts.
Hold the futures contract until its expiry to realise the basis captured. 
Sell the spot tokens at expiry.

For a step-by-step guide on basis trading (futures contracts vs. spot), you can refer to “1. Future Trading vs. Spot Trading” in this article.

What’s the Profit Potential?

The basis captured will be your profit. Note here that you must hold the trade until the futures contract expires to realise the full amount. 

What Do I Need to Consider?

Exit and entry costs on both trades e.g. trading fees and slippage.
Execution risk when trading both Spot and Futures contracts at the same time, especially during volatile market periods.
Liquidation risk considering you can trade up to 100x for the contracts mentioned above. Your position could get liquidated if market price climbs higher than your liquidation price, which will expose you to an unhedged spot position. If choosing to use high leverage for your trade, you should closely monitor market conditions and top up your wallet to meet the margin requirements. Alternatively, you can choose to trade with lower leverage to reduce liquidation risks.

For Quanto Futures

USDT (Tether) is needed to buy Spot. Extra XBT (Bitcoin) is needed as margin for the Perpetual contract.
Quanto contracts are margined and settled in XBT (Bitcoin), so keep in mind that you will still be exposed to XBT/USD price risk when trading Quanto contracts. You can consider shorting our XBTUSD or XBTUSDT contracts to hedge the price risk.

Like what you’ve read? We’ve got more trading guides covering derivatives trading, technical analysis, bot trading, and more. Check them out here

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In the meantime, if you have any questions please contact Support who are available 24/7.

The post BitMEX Alpha: Cash and Carry with Dated Futures appeared first on BitMEX Blog.

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