How to open contract on Bybit

Opening a contract on Bybit involves selecting the contract type, underlying asset, order type, customizing parameters (price, quantity, margin, leverage), and finally placing the order.

Nov 13, 2024 at 04:26 pm

How to Open a Contract on Bybit

Bybit is a popular cryptocurrency exchange and derivatives platform that offers a wide range of contract trading options for its users. Opening a contract on Bybit is a relatively straightforward process, but it does require a bit of understanding of the platform's features and functionality. This guide will provide a step-by-step breakdown of how to open a contract on Bybit, including details on the various order types and settings available.

Step 1: Choose a Contract

The first step is to choose the contract you want to trade. Bybit offers a variety of contracts, including perpetual contracts, inverse perpetual contracts, and futures contracts. Let's explore the three main types of contracts offered on Bybit:

• Perpetual Contracts: Perpetual contracts are contracts that do not have an expiry date and can be held indefinitely.
• Inverse Perpetual Contracts: Inverse perpetual contracts are perpetual contracts that have a fixed value in Bitcoin (BTC) and allow traders to speculate on the price of an underlying asset without actually holding it.
• Futures Contracts: Futures contracts are contracts that expire on a specified date and oblige the buyer to buy or the seller to sell an underlying asset at a predetermined price on that date.

Step 2: Select the Underlying Asset

Once you have chosen the type of contract you want to trade, you need to select the underlying asset. Bybit offers a wide range of underlying assets, including cryptocurrencies, commodities, and fiat currencies.

Step 3: Choose the Order Type

The next step is to choose the order type you want to use. Bybit offers a variety of order types, including limit orders, market orders, stop orders, and conditional orders.

• Limit Order: A limit order is an order to buy or sell an underlying asset at a specified price.
• Market Order: A market order is an order to buy or sell an underlying asset at the current market price.
• Stop Order: A stop order is an order to buy or sell an underlying asset when the price reaches a specified level.
• Conditional Order: A conditional order is an order that is only executed if certain conditions are met.

Step 4: Set the Parameters

Once you have chosen the order type, you need to set the parameters for your order. These parameters will vary depending on the order type you have chosen.

• Price: For limit orders, you need to specify the price at which you want the order to be executed.
• Quantity: The quantity is the number of contracts you want to buy or sell.
• Margin: The margin is the amount of money you will need to post as collateral for your order.
• Leverage: Leverage is a tool that allows you to trade with more capital than you have in your account. However, it is important to note that leverage can magnify both your profits and losses.

Step 5: Place the Order

Once you have set the parameters for your order, you can place the order by clicking on the "Buy" or "Sell" button. Your order will then be added to the order book and will be executed when the specified conditions are met.

Additional Features

In addition to the basic order types, Bybit also offers a number of additional features that you can use to customize your trading experience. These features include:

• Trailing Stop: A trailing stop is a stop order that moves dynamically to lock in profits as the underlying asset price moves in your favor.
• Stop Loss: A stop-loss order is a stop order that automatically closes your position to prevent further losses as the market turns against you.
• Reduce-Only Option: The reduce-only option ensures that you can only reduce your position and allow you to close open positions without taking new ones.

Conclusion

Opening a contract on Bybit is a straightforward process that can be completed in just a few minutes. By following the steps outlined in this guide, you can start trading contracts on Bybit and take advantage of the benefits that this platform offers.