1. What is USDT perpetual contract? How does it differ with Inverse perpetual contract?
USDT perpetual contract is a linear contract. The margin used for a linear contract is USDT. On the other hand, an inverse contract means if a trader would like to trade BTC/ETH/XRP/EOS contract, the underlying cryptocurrency has to be used as the margin to trade the respective contract. As compared to Inverse perpetual contract, USDT perpetual contract consists of the following:
- The calculation of margin and P&L of USDT perpetual contract is more direct as compared to Inverse perpetual contract. When trading 1 BTC and the price moves by 100 USDT, the profit/loss of the trader will be 100 USDT. The P&L chart of the USDT contracts will be a linear curve.
- Inverse perpetual contract is traded based on the underlying cryptocurrency. Traders need to hold a much volatile BTC/ETH/EOS/XRP as margin. Hence, even if traders choose not to trade, holding the cryptocurrency itself involves risks. On the other hand, USDT perpetual contract uses stablecoin as margin and thus, traders do not have to hedge their position to avoid the risk of holding the cryptocurrency.
2. How to deposit USDT?
Traders can navigate to My Assets page and click on USDT deposit. Bybit accepts USDT deposits from Omni based on the Bitcoin network and ERC20 from the Ethereum network. The arrival time of the deposit is generally about ten minutes. Traders can also use the asset exchange function to exchange other cryptocurrencies such as BTC or ETH to USDT for trading. For specific steps on how to make a deposit, please click here.
3. What is the highest leverage supported by USDT contracts? Does it support hedging?
Bybit USDT contracts support up to 100x leverage. USDT contracts support hedging. Under isolated mode, traders can use different leverage on long and short position so as to allow more flexibility in managing long-term and short-term speculative position. Under cross mode, by default, the USDT contract uses the highest leverage possible under the current tiered margin to calculate the margin required.
4. Is there a fee applicable when closing a hedged position?
Currently, Bybit does not support internal matching of hedging positions. When a hedged position is closed by a trader, the trading fee is determined on whether it is a taker or a maker order.
5. Will a hedged position be subjected to liquidation?
Under isolated mode, the hedged positions are independent and not related, hence the positions can be liquidated individually. Under cross mode, fully hedged positions will never be liquidated. When the positions are not fully hedged, only the excess contracts that are not fully hedged may be subjected to liquidation, and the positions that are hedged will not be affected.
6. Will a hedged position be subjected to Auto-deleveraging (ADL)?
The same logic for liquidation applies for ADL. Under isolated margin, the individual position has the risk of being ADL. Under cross margin, fully hedged positions will not be chosen for ADL. When the positions are not fully hedged, only the excess contracts that are not fully hedged may be subjected to ADL, and the positions that are hedged will not be affected. The ADL ranking lights indicate the risk of being chosen for ADL where each light lit represents a 20% increment in ADL ranking. When the positions are hedged, the system will compare both the Buy/Long and Sell/Short ADL ranking and reflects the higher ranking.
7. Is it possible to switch back and forth between isolated margin mode and cross margin mode?
When a trader switches a position from isolated margin mode to cross margin mode, if he holds long and short positions of the contract simultaneously, both positions will be switched to cross margin mode. When a trader tries to switch a position from cross margin mode to isolated margin mode, he can only do so when he holds either a long or short position or no position. If he holds both long and short positions of the contract simultaneously, cross margin mode cannot be switched to isolated margin mode.
8. What are the differences between Auto Margin Replenishment (AMR) and Cross margin mode?
The AMR function is similar to cross margin mode in terms of achieving the objective of using all USDT available balance to maintain the current position. The specific implementation process is different:
Under isolated margin mode, traders can choose the leverage used to manage their own trading risks. Under cross margin mode, by default, the system utilizes the maximum leverage to calculate the required margin. Under the isolated margin mode with AMR enabled, traders can realize a similar effect of cross margin mode + the ability to adjust leverage. This way, the amount of leverage to be used can be controlled and all available balance is used to maintain the current position.
The AMR mode will add a fixed amount of margin (the position's initial margin) from the available balance to the position once it is nearing liquidation. Unlike cross margin mode which uses all the available balance to calculate the liquidation price, traders will be notified when AMR is triggered and this allows traders to have time to better manage their position.
However, under isolated margin mode, both long and short position remains independent and can be liquidated in both directions.
9. What is Tiered Margin?
Tiered margin means that the larger the position/order quantity, the higher the required initial/maintenance margin rate. On isolated margin mode, the existing positions and quantity of active orders in the same direction under the same contract determines the tiered margin. On cross margin mode, the existing positions and quantity of active orders in the direction with a higher value under different contract determines the tiered margin of the current contract. Taking BTCUSDT as an example, the base value of the tiered margin is 1 million USDT. For every 1 million USDT contract value increment, the initial / maintenance margin rate increases by 0.5%. Unlike the risk limit level of inverse contracts, the system will automatically calculate the user's current tiered margin, and users do not need to adjust manually.
10. What is the unrealized P&L settlement time for USDT contracts？
Under cross margin mode, all the USDT contracts share the unrealized P&L in real-time, whereby traders can utilize the unrealized profit to open a new position or make a withdrawal. As opposed to the unrealized profit of inverse contract not included in available balance, USDT allows maximum fund utilization to achieve higher effective leverage used. Traders can withdraw the available balance anytime if needed.
While using cross margin mode, please take note that withdrawal will cause position margin to decrease and increase the risk of liquidation.
11. Is the insurance fund of USDT contracts shared among all coins?
Unlike inverse contract which uses the underlying coin as settlement, all USDT contracts will use USDT as settlement. Hence, the USDT insurance fund is shared among all contracts.
12. How to withdrawal USDT? Which method of withdrawal does Bybit support?
At the moment, Bybit only supports withdrawal via ERC20 and do not support Omni. For the steps on how to make a withdrawal, please click here.