What is Bybit futures trading?

Bybit futures let traders speculate on crypto prices with leverage, offering both USDT and inverse perpetual contracts—ideal for profiting in rising or falling markets.

Jul 22, 2025 at 04:14 pm

Understanding Bybit Futures Trading

Bybit futures trading refers to the process of buying and selling futures contracts on the Bybit exchange, a platform primarily focused on cryptocurrency derivatives. These contracts allow traders to speculate on the future price of assets like Bitcoin (BTC), Ethereum (ETH), and other altcoins without owning the underlying asset. The key appeal lies in the ability to profit from both rising and falling markets. Traders can go long (buy) if they expect prices to rise or short (sell) if they anticipate a decline. This flexibility makes Bybit futures attractive for both day traders and swing traders.

Types of Futures Contracts on Bybit

Bybit offers two main types of futures contracts:

• Inverse Perpetual Contracts: Settled in the base cryptocurrency (e.g., BTCUSD settled in BTC). Profits and losses are calculated in the same coin as the contract.
• USDT Perpetual Contracts: Settled in USDT (Tether), making them more intuitive for traders who prefer stablecoin-denominated gains and losses.
  

  Both types are perpetual, meaning they have no expiration date—unlike traditional futures. This allows traders to hold positions indefinitely as long as they meet margin requirements. The funding rate, which is exchanged between long and short positions every 8 hours, ensures the contract price stays close to the spot market price.

  How to Start Futures Trading on Bybit

  
  To begin trading futures on Bybit, follow these steps:
• Create an account at [bybit.com](https://www.bybit.com) and complete identity verification (KYC) if needed for higher limits.
• Deposit funds into your futures wallet—either in BTC, ETH, or USDT depending on the contract type.
• Navigate to the Futures tab and select either Inverse or USDT Perpetual.
• Choose a trading pair (e.g., BTC/USD) and set your order type: limit, market, or conditional.
• Set leverage using the slider—options range from 1x to 100x depending on the contract and risk tolerance.
• Place your order by clicking Buy or Sell, and monitor your position in the active orders section.
  

  Each step must be executed carefully. For example, if you choose 100x leverage, a 1% adverse price move could result in liquidation. Always use stop-loss orders to manage risk.

  Key Features of Bybit Futures

  
  Bybit provides several tools that enhance the trading experience:
• Risk Limit System: Higher leverage comes with higher risk limits, which affect liquidation prices. Adjusting this manually helps control exposure.
• Take Profit & Stop Loss: These can be set when opening a position or added later via the position panel.
• Partial Close: Traders can close part of a position to lock in profits while keeping the rest open.
• TradingView Integration: Allows advanced charting and technical analysis directly on the Bybit interface.
• Copy Trading: New traders can mirror experienced ones in real time—a useful feature for learning strategies.
  

  These tools are accessible under the Order and Position tabs once a trade is live. Misconfiguring risk settings can lead to unexpected losses, so always double-check before confirming.

  Understanding Leverage and Liquidation

  
  Leverage amplifies both gains and losses. If you open a 10x long position on BTC/USDT with $100, you’re effectively controlling $1,000 worth of BTC. A 5% price increase gives you a 50% return on your margin. However, a 5% drop wipes out your entire margin unless you have additional funds.
  

  Liquidation occurs when your margin falls below the maintenance threshold. Bybit shows a liquidation price for each position. To avoid it:

  • Monitor your margin ratio—the lower it is, the closer you are to liquidation.
  • Add more margin manually via the Add/Reduce Margin button.
  • Avoid maxing out leverage unless you have a precise entry and exit plan.

  Using Isolated Margin Mode (recommended for beginners) caps your risk to the allocated margin. Cross Margin uses your entire wallet balance, increasing risk.

  Common Mistakes to Avoid

  
  New traders often make avoidable errors:
• Overleveraging: Using 50x or 100x without understanding the implications.
• Ignoring Funding Rates: Holding positions long-term without checking if you’re paying or receiving funding.
• No Risk Management: Failing to set stop-loss or take-profit leads to emotional trading.
• Misreading Liquidation Price: Assuming the liquidation price is static—it changes with market volatility and your risk limit.
  

  Always test strategies in Bybit’s Demo Trading mode first. It simulates real market conditions using virtual funds, allowing you to practice without financial risk.

  ---

  Frequently Asked Questions

  What is the difference between isolated and cross margin on Bybit?
  
  Isolated margin restricts risk to the amount allocated to a specific position. Cross margin uses your entire wallet balance as collateral, which can prevent premature liquidation but exposes more capital to loss.

  Can I trade Bybit futures without KYC?
  
  Yes, Bybit allows futures trading without completing KYC, but your deposit and withdrawal limits will be lower. Completing KYC unlocks higher limits and access to more features.

  How often is the funding rate paid on Bybit?
  
  Funding occurs every 8 hours at 00:00 UTC, 08:00 UTC, and 16:00 UTC. If the rate is positive, longs pay shorts. If negative, shorts pay longs. You only pay or receive if you hold a position at the exact funding time.

  Does Bybit support stop-loss orders for futures?
  
  Yes, Bybit supports both stop-market and stop-limit orders for futures. These can be set when opening a position or added later via the position panel. Always verify the trigger price and order type to ensure proper execution.