The BitMEX Calculator lets you calculate your profit/loss, liquidation price and your ROE (Return on Equity).
We will breakdown each section so you can calculate and understand each section of the calculator.
The ROE or Return on Equity is how much you make compared to how much you put down.
For example let’s say you put down $100 in equity and you put your leverage at 10x, in total your position size would be $1000.
If the price of the underlying asset increases by 10% then your position would be worth $1100, so you would have made $100.
Your ROE would then be 100%, as your equity is $100 and your profit is also $100.
With the target price calculator above, you can calculate what entry price is required to achieve the ROE you desire. So if you’re looking to make $100 and you have $100 of equity, you can workout the leverage needed and entry price required to achieve the profit you desire.
The scary word…LIQUIDATION. If you’ve traded on very high leverage, then the word liquidation probably scares you. Working out your liquidation price is quite simple and we’ll show you below on the calculator.
For those that fear liquidation, we recommend you reduce your leverage, which will in turn move your liquidation price further away from your entry.
So I’ll breakdown each section of the calculator above so you can adjust it to your own information.
Quantity: 6500 – this is the position size that you’re opening, for this example I used $6500.
Entry price: The price of the asset that you’ll be entering the trade, so if BTC trades at $6800 today, then that will be your entry price.
Wallet: The amount of Bitcoin in your wallet, for this example I’ll use 0.1.
With all of this information in our calculator, you can see we have the liquidation price in the bottom right at $6193. So if Bitcoin reaches the price of $6193, then the BitMEX liquidation engine will take over your position and you will LOSE all your Bitcoin in your wallet.
To move your liquidation price further away, you can adjust the quantity to a lower amount. For example if we adjusted our position size in half from 6500 to 3250 we would get a new liquidation price and this saves you from ending up on the rekt BitMEX list.
When it comes to calculating your profit or loss, it’s quite simple. From the image below I’ll explain how you can work out the amount of profit you can make trading on BitMEX.
So for this example we have several inputs.
Quantity: The position size you are taking including the leverage you use, so if your equity is $100 and you use 10x leverage, your position size will be $1000.
Entry price: The price at which you open the trade.
Exit price: The target price that you want to exit the trade.
Leverage: The multiplier of house money that you use to increase your position size up to 100x.
From this you can see that a 10% price move, gives us 90.9% ROE and a profit of 0.0151 Bitcoin.
But note, if the price were to move in the other direction and go down 10%, your position would likely be liquidated and the margin you provided of 0.0169 Bitcoin would disappear from your account and go to Arthur Hayes insurance fund.