A few hours ago, the BitMEX exchange announced the introduction of a new product, the Ethereum futures contracts (ETHUSD).
This is the announcement of BitMEX on Twitter:
We will be bringing another new product to our platform with the launch of an ETHUSD quanto futures contract on 05 May 2020. More details on our blog: https://t.co/1LgME2IfA6 pic.twitter.com/elHFv5iyst
— BitMEX (@BitMEXdotcom) April 24, 2020
These futures are similar to perpetual futures that can be found on other exchanges, but with a different dynamic: these futures are in fact the first of their kind because they have the possibility to trade with leverage up to 50x.
The contract, called ETHUDM20, will go online on May 5th and expire in July. It has a multiplier fixed in bitcoin, 0.00001 XBT (which corresponds to 100 satoshi), regardless of the USD price of Ethereum, allowing the trader to go long or short without touching ETH or USD.
These futures combine the perpetual swaps of ETHUSD with the fixing and closing system of traditional futures, and just like every futures contract, it is settled quarterly.
These are the details of the Ethereum futures contracts:
- Symbol: ETHUSDM20;
- Expiry Date: 26 June 2020, 1200 UTC;
- Bitcoin Multiplier: 0.000001 XBT (100 Satoshis);
- XBT Contract Value: ETHUSD Price * Bitcoin Multiplier (100 Sat/$1);
- Underlying: .BETH;
- Max Leverage: 50x;
- Maker Fee: -0.025%;
- Taker Fee: 0.075%;
- Base Initial Margin: 2.00%;
- Base Maintenance Margin: 0.90%.
The competition for perpetual contracts is getting increasingly intense, partly because it is a very popular tool for traders, hence many exchanges are starting to offer this product on their platforms, whether centralized or not.
BitMEX was recently outperformed by Binance in terms of futures volumes, so perhaps the introduction of this new product is a response to the decline experienced in recent times.
This system has also recently entered into decentralized finance (DeFi), thanks to what dYdX has accomplished with its decentralized perpetual contracts.