Cryptocurrency futures exchange Bybit just announced they will add USDT perpetual contracts to their trading platform.
Bybit was kind enough to give us a testnet account to try out the new product and share our thoughts.
In our testing we focused on one key question:
How can we use USDT Perpetual contracts to make better trades?
Biggest benefit: never get liquidated
The big reason to use perpetual contracts is the ability to hold long and short positions at the same time.
If you hold equal amounts of long and short positions meaning you are fully hedged, you will never get liquidated.
This can be useful in a situation where you are holding a losing position, you are afraid of getting liquidated and you still have some available balance left on your account.
Instead of adding to your current position to move average entry price lower or adding more margin, you can choose to use additional funds for a counter-trade to hedge your position from liquidation to a certain price point that you feel comfortable with.
Prepare for corrections or trend reversals
Another use case for perpetual contracts is when you are holding a long-term position but you are expecting a short-term correction, now you can make a short-term counter trade on the same account.
Before you had to have an additional account if you wanted to short and long at the same time. Now you can simply make a short-term prediction counter to your long-term trade on the same account without closing your long-term position.
The benefit of this strategy is that if the price makes a correction, you can profit from short-term counter trade and if the price actually makes a full-on trend reversal, your short-term trade worked as a hedge to your long-term Long position.
How Bybit stands out from other perpetual contract providers?
The first clear difference is the UI. The interface is very clear and easy to understand even for a beginner. The UI is quite responsive and there seems to be no lag between input and the system.
You can set take profit levels and stop-loss seamlessly at the same time as you enter a trade on the right-side column. All open positions and price targets are shown on the chart so you always know what to expect. Bybit also allows you to set a trailing stop-loss.
If you look closely at the top right corner of the chart next to the order book, you can see a rectangular box with green and red buttons. These on-chart trading functions allow you to make immediate market orders on the chart. This can be useful in situations when the price is moving fast. You can also flip your current Long position to Short or vice versa, right on the chart.
Other benefits are portfolio margin and the ease of hedge-trading as we showed previously.
Currently, only BTCUSDT pair is supported but more trading pairs will become available as well as an insurance option. The Insurance option will allow you to ensure your current position against losses by paying a premium for up to 48 hours. You are can be insured up to 100% with higher fees and you can even make a profit from the insurance. This is also explained on the video below at 21:40.
Fees for perpetual contracts
- 0.025% for market makers (limit orders)
- 0.075% for market takers (market orders)
USDT Perpetual contract UI overview
Here is a clip from Bybit CEO Ben Zhou showing how to use the platform and how does the UI work.
The UI and function showcase starts from 12:49 and lasts until 20:20.
Get started with $90 bonus on Bybit
Bybit offers up to $90 for new accounts. You can register for Bybit here.
If you are unclear how to claim all the bonuses, you can read our guide how to claim each Bybit bonus here.
Bybit always creates contests and other promotions so their users always get more bonuses.
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