ByBit Basic Guide- The NEW favorite Exchange



Lately It is hard to miss the new hot and popular exchange Bybit.

Heavy marketing including crypto social media engagement, competitions, bonuses and much more.


For myself I come to new exchanges with caution especially when it comes to depositing significant sums for trading. But the attractive margin using the ALTS pairs given by bybit has made me look into it and i want to share with you two thoughts regarding this and what I do and MY method. This is not a financial advice in any form so NANP.


1. The given bonuses - I follow Bybit community for news and prizes and stack up bonuses when ever there is a chance for it. I do it not because I anticipate to WITHDRAW the "FREE" money like most of people talk. I use it for buffer for my loss if in loss so for example IF i got 50$ bonus so i can risk my initial deposit in 50$ more from my eyes and still participate at market. 2.Swap Trading - As to this date Bybit exchange is a MARGIN ONLY exchange, but in the near future I anticipate it to open for swap, once opened more prizes and bonuses are likely to flow.





Below is a basic guide for using Bybit, If you find this useful and want to help me stay motivated you welcome to use my referral link by clicking this :

https://www.bybit.com/app/register?ref=GMyK8





What is Bybit exchange?

Bybit is a cryptocurrency derivatives exchange aiming to revolutionize today’s cryptocurrency market by combining the best of cryptocurrencies and traditional finance to bring about the industry’s safest, most reliable, fairest, and most user-friendly exchange to date. 

The features of Bybit exchange?

The following is the first introductory article of Bybit’s features. It will present:

- Perpetual Contracts

- The Dual Price Mechanism

- Bybit’s Mark to Market

- 100x Leverage

- The Contract Loss Mechanism


1. Perpetual Contracts

What is the meaning of Perpetual Contracts? A perpetual contract is a financial derivatives product that is in between Spot trading and Futures trading.

Spot Trading vs Futures Trading vs Perpetual Contracts

However, while spot trading requires immediate settlement and futures contracts require settlement on a specified date in the future, perpetual contracts, on the other hand, do not have an expiry date. It provides a hassle-free trading option and allows traders to hold positions for as long as they want; resulting in even more opportunities for financial gain.



2. Dual-price mechanism

Market manipulations happen regularly in cryptocurrency trading. What is Market Manipulation? Amarket manipulation is the act of intentionally inflating or deflating the price on an exchange for personal gain. Such abnormal price fluctuations may cause malicious liquidations of traders’ positions and result in a very unfair trading environment. Generally speaking, the less volume a market has, the easier it is to be manipulated.

What is the meaning of Dual-price mechanism

Bybit uses the Dual-price mechanism to protect its traders from market manipulations and ensure a fair trading environment.



Where most exchanges use the Last Traded Price as the trigger for liquidation,  Bybit, instead, uses the Mark Price, referring to the global spot index price, as the trigger for liquidation. The Dual Price Mechanism protects investors from malicious liquidations and reduces incentives for bad actors trying to manipulate the market.

Dual-Price mechanism example

If the Last Traded Price of Ethereum on an exchange plummets from $170 to $50 due to a tempted market manipulation, the Mark Price would remain unaffected and stay at $170, effectively protecting traders from being liquidated due to this sudden drop in price as the mark Price is the sole trigger for Liquidation.

With this design, traders on Bybit will be able to trade in the fairest possible trading environment. Even Bybit doesn’t have the power to influence the Mark Price.   

3. Mark to market(MTM)

On Bybit, the contracts’ price is marked to the spot market with the last traded price closely following the spot price. The primary mechanism used to tether its price to the spot price is called  ”Funding”. Funding is exchanged between long and short positions every 8 hours, thus making the last traded price marked to market every 8 hours.



4. Up to 100:1 flexible leverage

Bybit offers 100x leverage perpetual contracts. But what is the difference Leverage Between Spot、Futures and Perpetual Contracts? In the regular spot margin market, the leverage is usually 3-5x, and the borrowing costs may be high, whereas for futures contracts the current exchanges only offer around 5-20x leverage. But with Bybit Perpetual Contracts offering up to 100x leverage, traders can adjust the leverage and margin of an open position at any time. This is a highly flexible form of risk management and ensures the best possible trading experience.



5. Comprehensive contract loss mechanism to protect investors

Lastly, Bybit employs a comprehensive contract loss mechanism to protect its investors. The contract loss mechanism is used to determine who bears the cost when positions cannot be liquidated at bankruptcy price.

Socialized Loss system VS Auto-Deleveraging system

Unlike the commonly used socialized loss system where all profitable traders have to share the costs, Bybit adopts the  “Auto-Deleveraging system” as our contract loss mechanism to protect investors from being affected by large losses caused by risky traders. The ADL system ranks all traders by profit ratio and effective leverage, where the more profitable and higher leveraged traders will be de-leveraged first.



Perpetual Contract

A perpetual contract is an innovative derivatives product that is in between Spot margin-trading and Futures trading. As such, here are five characteristics for the perpetual contracts offered by Bybit.

1. No expiry date

Spot trading requires immediate settlement and future contracts require settlement on a specified future date. Perpetual contracts, on the other hand, do not have an expiry date, providing a hassle-free trading environment for all traders. It is suitable for speculative traders and traders who perform trade hedging as they can buy/sell the positions and hold them for as long as they wish. In addition, investors do not have to worry about settlement fee & roll over cost on Bybit, but should pay close attention to the funding in every 8 hours as they may pay or received a funding fee for holding a position.

2. Dual price mechanismUnlikely to be manipulated

Market manipulation is the act of intentionally inflating or deflating the price on an exchange for personal gain. Such abnormal price fluctuations may cause malicious liquidations on traders’ positions and result in a very unfair trading environment.

Bybit uses the Dual-price mechanism to protect its traders from market manipulations and ensure a fair trading environment. At present, most exchanges use Last Traded Price as the trigger for liquidation. Bybit employs Mark Price as the trigger for liquidation instead of the last traded price. Traders can regard Mark Price as a reference to real-time spot price transactions from major spot exchanges. As such, Bybit does not have the power to influence Mark Price.   

3. Mark to market

Another characteristic of Bybit’s perpetual contracts is that the contracts’ price is marked to the spot market. The last traded price on Bybit closely follows the spot price. The primary mechanism used to tether its price to the spot price is called  ”Funding”. On Bybit, funding is exchanged between long and short positions every 8 hours, specifically at 0400, 1200 and 2000 Beijing Time (GMT+8). As such, the trading price on Bybit is marked to market every 8 hours.

4. Up to 100:1 flexible leverage

In the regular spot margin market, the leverage is usually 3-5x, and the borrowing costs may be high. For futures contracts, the current exchanges offer around 5-20x leverage. On the contrary, Bybit offers Perpetual Contracts at up to 100x leverage! Traders can adjust the leverage/margin of an open position anytime. This is a highly flexible form of risk management and ensures the best possible trading experience.

5. Comprehensive contract loss mechanism to protect investors    

Bybit applies an “Auto-Deleveraging” (ADL) contract loss mechanism to protect investors from being negatively affected by large losses incurred by risky traders. Unlike the commonly used socialized loss system where all profitable traders have to share the costs, ADL mechanism will systematically rank all traders by their profit percentage and effective leverage, selecting the highest leveraged and highest profit traders to be de-leveraged first. The major benefit of ADL is that lower risk takers will have a lower chance of bearing the contract loss.


Perpetual Contracts Quotes


The usual market practice for contracts with direct quotes is that we usually buy/sell the contracts that are denominated in the base currency. For example, on the spot market of BTCUSD, we need to state how many Bitcoin/Ethereum(Base currency) we want to trade, and the profit and loss will be settled in USD(Quote currency).

However, quotes for Perpetual Contracts on Bybit are slightly different from the above-mentioned example.

Firstly, the quotes are given in a direct way (BTCUSD) as per previously, but the actual trading is conducted inversely (USDBTC). Secondly, traders need to indicate their intended opening position volume as denominated in USD contracts and Bybit’s platform will automatically calculate profit and loss figures denominated in BTC.

This feature is specifically designed to provide convenience to all traders as it allows trades as low as 1 USD to be easily keyed instead of inputting a string of decimal places in BTC such as 0.000XX BTC.

Using BTCUSD as an example:

If a trader buys 10,000 contracts at BTC = 8,000 USD on Bybit What he is actually doing is that he is selling 10,000 USD and buying an equivalent value of BTC (10,000/8,000), which is equivalent to 1.25BTC Suppose the trader decides to close all contracts at BTC = 12,500 USD on Bybit Again, what he is actually doing is buying back 10,000 USD worth of contracts and selling the equivalent value of BTC (10,000/12,500) which equates to 0.8 BTC

Profit/Loss for a short position = Beginning Value of Quote Currency - Ending Value of Quote currency                                             = 1.25 BTC - 0.8 BTC                                             = 0.45 BTC

By this logic, we can derive the formula to calculate profit & loss for perpetual contracts on Bybit:

Long position Profit & Loss = Contract Value x (1/Entry Price - 1/Exit Price)



Order Types: Definition, Differences, & Use



Bybit is a cryptocurrency derivatives exchange aiming to revolutionize today’s cryptocurrency market by combining the best of cryptocurrencies and traditional finance to bring about the industry’s safest, most reliable, fairest, and most user-friendly exchange to date.


The following article introduces 3 order types that are available for you on Bybit. They are Conditional Orders, Market Orders and Limit Orders.

Market Orders

This order type is executed instantly and filled at the best available price from the order book. The two order types available are buy market orders and sell market orders. However, though the execution is guaranteed, the price at which it will be executed is not, as it may quickly change. For market orders, charges for taker fees will apply.


Limit Orders

This order type pre-sets a price at which to fill in the order. This guarantees the price but may take longer to be executed. For Buy Limit Orders, the order price must be set at a price lower than the last traded price, or it would be filled immediately as a market order. The same applies to Sell Limit Orders, but the order price must be higher than the last traded price.