6-9% low risk return for 2 weeks. 450-940% annualised

in trading •  10 months ago

Bitmex december futures

The current bitmex quarterly future matures in 2 weeks, it currently has a ~6% premier, trading at $1,000 above it's index price.

On 29 december this future contract will be settled the index price. That means that the futures price is guaranteed to be the index price on the 29th.

The trade: Option 1, very small risk, 6% return, 450% annualised

Simply buy btc and put it on bitmex, then short Dec 29. This way you are no longer exposed to btc movement.

If the price rises your collateral btc increases in value while your position loses value. At the end you will be guaranteed the 6% difference.

The risk is only that your money is on bitmex and out of your control. So could be hacked/stolen. Well worth the 6% return.

The trade: Option 1, small-med risk, 9% return, 940% annualised

This is the trade I have made. You will need to have access to Bitfinex or Kraken(good luck using it though). I used bitfinex and will be referring to it from now on.

Put all funds into BTC like before, but only put 25% of them on bitmex, put the rest onto bitfinex.

With the funds on bitfinex margin long btc for 125% of your total funds. Then on bitmex short Dec 29 225% your total funds.

So for example if you have 10btc, this should be your positions


2.5 btc in wallet

22.5 btc value short


7.5 btc in wallet

12.5 btc value long

This gives you 22.5 total exposure long and 22.5 total exposure short, again fully balanced.

At settlement you will receive 6% of the 22.5 btc, which is 1.35 btc

From this we need to subtract the cost of fees on bitfinex and the general trading fees. Bitfinex margin cost for 14 days on 12.5 btc would be about 1.2% so 0.15. then let's say 0.7% more for total trading 10btc + 12.5btc + 22.5 btc = 45btc. 0.7% of which is 0.315 btc. Total costs 0.465 btc

Lets take that away from the 1.35 btc we earned giving us 0.885 btc or a total return of 8.85%

The risks are the same as before with regard to the exchanges but on top of that you will need to manage your funds. About a 30% move in either direction will liquidate you or one site. That while not a complete disaster is not a great result. You would lose a lot on one site but gain it all back on the other. The big risk is if this happens quickly and then returns.

So you need to be constantly rebalancing the balances on each site, bitmex only lets you withdraw daily and bitfinex can have problems in this regard so this may be difficult at times.

If a rebalance is not possible you may need to reduce the positions on each site, this could result in a profit or a lose. A profit is more likely as the closer we move to settlement the price should come in on the future contract.

Long short short you will be in for a vigilant christmas if you pick this option.

Thanks for reading.

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If you like this post there will be more like it on my posts page, this account will be dedicated to posting about trading cryptocurrencies and maybe a bit of general stock markets.

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Please do not invest on the advice of a stranger on the internet, only use this advice here as a starting point for your own research, and then if you choose to invest please only invest an amount that you can afford to lose.

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This post has received gratitude of 1.00 % from @jout


You got a 0.33% upvote from @postpromoter courtesy of @jout!

i like your post but i dont really encourage u to trade on margin in this volatile markets. Sometimes market can be so volatile that btc crashes and bounce back up. in this unfortunate scenario you might be margin call for both accts. the rewards might seem good but trade with care.