Here we will show the difference between the liquidation price on DMEX vs BitMEX as well as the collateral difference. For this purpose, we will try to create two identical orders on both platforms and compare the liquidation prices.
For this example, we will create an order of 1 BTC at price 9000 USD with 100x Margin.
First, we go to BitMEX, from the screenshot below you can see that the order price is 9000 USD at the top, the value is 0.9999XBT (almost 1 BTC) and the Liquidation Price is 8957 USD.
Now we do the same with DMEX. In the screenshot below you can see the order amount is 1 BTC, the price is 9000 USD and the Liquidation Price is 8910 USD.
Therefore the difference in Liquidation Price for an identical position on BitMEX and on DMEX is 47 USD which represents a 52% difference.
Experienced traders will remark the magnitude of this difference because having a liquidation price at 8957 is much much riskier than having the liquidation price at 8910. Any small move in price will get your position liquidated, and all your collateral will be lost.
Collateral Difference
If you compare the collateral used in both cases you will notice, that the collateral on BitMEX is 0.0115 BTC, if we transform that to USD it is 103.5 USD (0.0115 x 9000 USD). Now when we check the collateral on DMEX we see the 0.506357 ETH or 90 USD at the time of order.
So BitMEX not only has a much worse liquidation price, but it also takes more collateral then it should. If you open a 100x position, you should be providing 1% of the order value, that means 9000 USD / 100 = 90 USD. In fact, BitMEX is taking as collateral of 1.15% of the order value (or 15% more than it should).
Lets now go back and calculate the real leverage of the position on BitMEX:
Order Price: 9000 USD
Order Value: 9000 USD
Collateral: 103.5 USD
Liquidation Price: 8957 USD
Remember, for 100x leverage, you have to provide 1% of the order value as collateral and the liquidation price must be 1% below the order price. Lets now calculate the actual values on BitMEX:
The difference between the order price and liquidation price is 43 USD (9000–8957), this means that the Liquidation Price is 0.48% below the order price (not 1%). Now let’s calculate the same thing for the collateral, 103.5 represents 1.15% of the order value (not 1% again).
What this means, is that you have disproportionate odds of loosing on BitMEX. Based on the above numbers you can see that you are at a significant disadvantage while trading on BitMEX. It liquidates you at the wrong price and it takes more than required as collateral.
On DMEX, on the other hand, the collateral is exactly 1% of the order value (90 USD of the 9000 USD) and the liquidation price is exactly 1% below the entry price (8910 USD).
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