What is Bitmex downtime and what with my stop orders (stop loss)? - explained

Updated: Jul 15, 2020

Bitmex downtime is not when you see

notification: system overloaded. During "overloaded system" at Bitmex... Yes your stop losses shoud work but only in this case when you insert your stop orders....correct way! How to set up correct stop loss in Bitmex exchange platform?

Bitmex is not market maker and always when you sell somebody have to buy!

Several times in a year, you can experience go down Bitmex platform when Bitcoin prices stopped changing and you were logged out. And you cannot log in again. This downtime often when prices change rapidly

Traders are waiting for re-open trading at Bitmex after downtime and ask:

What with my stop limit orders? What with my profits? WTF now?

Let’s consider what happen if…

An example:

Bitcoin last price is 7300$ next suddenly Bitmex went downtime for 30min

and next new last price is 7000$ (and nothing was traded in the middle).

Look at screenshot from our calculator and let’s consider scenarios 2&3

Scenario 2 – poor trader (A) with long buy

Trader-A had opened 100,000 contracts buy long at 7300 with 1:50 leverage

What means deposit taken by Bitmex 0,2740 BTC

Estimated liquidation price for this trade was: 7192

Let’s say trader-A set stop loss at 7200 (by Last Price)

And after 30min break in Bitmex trading market re-open at…7000

What now? How to calculate loss? Can trader-A lose more than he invested?

Without NBP he should lose much more than 100%.

In this case forget about stop loss order, it will not work, and this trade will be “just“ liquidated. You don’t care at what price gone as you have negative balance protection (NBP – read more here). Trader-A lost all BTC allocated for this trade so… 0,2740 BTC but no more!

What if trader-A had more available BTC deposited on his Bitmex account?

Let’s say he had 1BTC more than he allocated for this unlucky trade. What in this case?

Nothing changes, he can lose only deposit already taken by Bitmex for this trade – no more! That is why liquidation price mechanism was created – to protect our cash.