Bybit Leverage Trading Explained: how to leverage trade on bybit?

Founded in March 2018, Bybit is now one of the fastest-growing cryptocurrency derivatives trading platforms in the market. It boasts over 3 million users and deals in over 100 crypto trading pairs from the spot and derivative trades.

Though the exchange offers several known traditional crypto products, leverage trading is what it is popular for. What makes it preferable is its credible customer service.

Whether you are a beginner or a professional crypto trader, if you want to trade in leverage,  Bybit is the perfect platform for you. Be it for the cold wallet storage, user-friendly interface, active customer support, or real-time market insights, Bybit is trusted by millions.

This guide will help you in the leverage trading on Bybit. Let us start:

What Is Bybit Leverage Trading?

Bybit Leverage Trading

Leverage trading is a trade where you are able to open a position worth more money than the margin you have to risk to open that trade position.

This also means, trading with leverage lets you earn larger gains compared to what you would have made without leverage. 

If you are a beginner, it is important to know about leverage trading and the platform you are using to trade. 

Suppose you bet $1,000 on Bybit. If you bet everything on Bitcoin, it means you believe that Bitcoin will rise in value. 

This will have different impacts on the gains based on what leverage you use.

If you buy Bitcoin with $1,000 using 100x leverage, and the price of Bitcoin witnessed a rise of 10%, the leverage can increase your gains. 

Rather than setting for a $100 gain without leverage, you will now earn $10,000. The difference between your gain is as big as $9,900 just because you used leverage.

However, when huge profits are involved, there is usually a huge risk associated with them. Instead of an upward movement, if the Bitcoin value decreases 10%, a non-leveraged trade of $1,000 will see a loss of $100. 

On the other hand, if you have traded with leverage of 100x, it could cost you a loss of $1000. 

To avoid such losses, ByBit offers you an inclusive & customized trading view, using which you can control your trades.

So, if you are sure about your market read and instinct, leveraged trading will enable you to earn considerable gains in a short period of time.

How Much Leverage does Bybit give?

Bybit allows up to 100x leverage. Traders can deal in 15 available currencies on this exchange. This leverage is amongst the highest in the crypto market.

Bybit Leverage Trading Fees

A leverage trading on the Bybit exchange demands a taker fee of 0.075% and a limit order of -0.025. This means, you will need to pay a certain percentage to start a position, and you will be paid to avail of a limit order. 

Another thing to know about Bybit leverage trading is that it charges fees on the full position. A full trading position is the sum of the leverage margin and the initial margin. This means you will have to pay higher fees for the use of higher leverage.

What all can you trade with Leverage On Bybit

Bybit offers you three kinds of trading products: Spot Trading, Derivatives Trading, and Decentralized Finance (DeFi).

  • Spot Trading: At present, Bybit allows traders to spot trade pairs such as BTCUSDT, ETHUSDT, and many other pairs including BIT/USDT, XRP/USDT, and more.
  • Derivatives Trading: Here, traders can deal in crypto pairings through inverse perpetual, inverse futures, and USDT perpetual. Traders can use leverage for every strategy. The leverage limits will be capped based on the derivatives product.
  • Bi-fi Center: Bybit has built this asset management platform to help traders grow their crypto holdings easily. The platform offers competitive APYs to enable more yields, and best-in-class security to protect traders’ funds. 

How To Trade On Bybit With Leverage 

Leverage trading on Bybit is more than just buying coins and waiting for the price to suit your position so that you can sell.

In order to earn profit from your leverage position, you must understand how trading with leverage works on Bybit. Here are instructions on how to trade leverage on this exchange.

Step 1: Select An Order Type

Just like any other account opening process, you start with log-in in to the platform or the app and once that is done, you can start the leveraged trade.

There are three types of orders you can make while trading: Limit order, Market order, and Conditional Order.

Limit Order: Your chance to add liquidity to the exchange’s books once the crypto price reaches the limit order price level. 

Market Order: Here, you become a market taker as you take out liquidity from the company’s books. Bybit charges 0.075% transaction fee on such orders.

Conditional Order: This is a limit or market order that will open if the market meets a specific condition. 

Suppose, after opening an account, you decide to make a market order. Then, you will simply press “market” and mention the leverage and the quantity in USD value. 

bybit market order

Step 2: Stop Loss & Take Profit

Once you decide the type of order you want to place, you need to take care of one important thing, which is stop-loss. On the same window where you choose the order type, you can decide on the “Long/Buy” or “Short/Sell” option.

Through these options, you can decide on a take profit & stop loss, and once you click “Confirm”, the platform will execute your order. Check the image given below.

Once you set these commands, the respective action will get triggered automatically if the price meets those decided levels.

bybit order levels

Once the trade is placed, Bybit allows you to view the current trading position on the trading dashboard. Just as shown in the below-given image.

bybit current trading position

Here, “Qty” will be the contracts that are worth the position at the time of trade opening. One contract is equal to 1 USD of value. 

“Value” is nothing but Qty mentioned in BTC, and equals to a sum of the initial margin and the leverage.

“Margin” displays all the funds that are drawn out of the trading account to open the trade.

“P&L” is your present profit or loss. 

“Daily realized P&L” is the total profit or loss you realized. 

Step 3: Close Your Position 

When it is time for you to close your positions, you do it through market or limit orders. These buttons will be available for use at the bottom right of your Bybit trading dashboard.

What Is Initial Margin in Bybit? 

Initial Margin is the collateral that you require in order to engage in Leverage trading. This margin depends on the leverage you use. The initial margin is equal to the Contract Quantity/ (Order Price x Leverage). 

For example, if you are trading with 100 BTC contract value with 100x leverage, your initial margin will be 1 BTC.

There is a clear breakdown given in the contract rules for every option and order type, making it easier for you to calculate the initial margin.

What Is Maintainece Margin in Bybit?

Maintenance Margin is the minimum margin needed to hold a position while trading with leverage on this exchange. The margin also decides the specific price that will trigger liquidation.

In the case of perpetual contracts, the maintenance margin base rate is 0.5% for BTC and 1% for ETH, EOS, and XRP of the contract value. The margin will however go up or down based on the risk limit.

How To Get Started & Use Bybit Leverage?

If you wish to enjoy the benefits of trading on Bybit, then your journey starts by creating an account using the app or website. Here are the steps you can follow:

  • Visit https://www.bybit.com/ and click on the “Register” button at the top on the right-hand corner.
  • Enter your email address and create a password.
  • You will receive a confirmation code from the exchange on the registered email address.
  • Verify the email using the confirmation code.

Now that your account is created, you have to deposit funds to the Bybit wallet to start trading. Here is how you can do it:

  • Go to the Bybit home page.
  • Click “Assets” at the top right corner.
  • Select the currency you want to deal in and then click “Deposit
  • Bybit allows you to add funds through a wallet address or by scanning a QR code.
  • It might take an hour or so to get your Bybit wallet credit with the funds.

Conclusion   

Bybit is an advanced trading platform with a number of security measures to safeguard your assets. It is one of the credible crypto exchanges available in the market that offers derivative trading with complete transparency.

If you are looking for an exchange to trade with leverage, Bybit is the perfect crypto exchange for you. It allows you to trade with maximum leverage of up to 100x which means you stand a better chance of earning more.

Bybit is a credible exchange designed for both beginners and expert traders.

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Jack Bailey

I am John, a veteran trader turned into a trading coach. Especially in the realm of cryptocurrency derivatives which is now booming and expected to grow big.