Here's a helpful infographic we put together:
A trader who is long ETHXBT contract on BitMEX will receive the ETH lending rate as an interest payment, and pay the BTC lending rate. On the flip side, traders on the short side of ETHXBT will receive the BTC lending rate and pay the ETH lending rate. Because of the supply and price difference between ETH and BTC, the net of the rate used to make the payment will almost always be positive for shorters on ETHBTC and negative for those who are long.
It has a 25x max leverage (4% initial margin requirement), and the funding credits are paid at 12:00 UTC. The maker/taker fee is still -0.025% and 0.075%. The full withheld profit won't be available until the next Friday on weekly rebalance.
Example of Trading BitMEX ETHXBT Perpetual Swap
1) The interest payment you get at 12:00 UTC each day (positive most of the time when you're short).
2) The decline in the price, which will track spot market value
How much interest will you earn? Look at Poloniex for the reference, below is BTC lending rate:
This is because you are borrowing at a higher rate in BTC and then investing at a lower rate at ETH if you are long ETHXBT, this makes it usually cost money to be leveraged long. Conversely, if you are borrowing ETH to go long BTC, you're paying a lower ETH rate to earn a higher BTC rate, and earning interest when leverage short ETHXBT.
It might seem daunting at first, but it's really as simple as just trading it as if it's spot or margin. You can buy and sell in the market to profit, which is realised ever Friday. Or you can just hold it and earn interest if you're short or just be willing to pay for the leverage if you're long. Remember: every day at 12:00 UTC is when the interest rate payment occurs (positive if short Ethereum, negative if long Ethereum -- most of the time).
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