What is Spread Trading on Bybit?

Spread Trading on Bybit provides a simplified way to enter trades, allowing traders to capitalize on spreads with just a few clicks. It involves simultaneously buying and selling two financial instruments, such as Spot, Perpetual or Expiry contracts with different expiration dates, to hedge risks and optimize potential returns.

 

 

 

What's the difference between Bybit Spread Trading and Bybit Arbitrage?

Spread Trading differs from Arbitrage Trading in four key ways:

• Locked-in spread: In Spread Trading, the difference between the entry prices of the two legs always matches your intended spread. In Arbitrage Trading, however, execution prices may deviate from expected values, especially during periods of high volatility.

• Full hedging: Spread Trading uses an atomic execution mechanism, ensuring that both legs are executed in matching quantities — or not at all — eliminating leg risk. In contrast, Arbitrage Trading doesn't guarantee equal execution for both legs.

• Independent liquidity: Spread Trading operates separately from the regular order book, with trades executed against spreads rather than underlying assets. Arbitrage Trading, on the other hand, relies on liquidity from the regular order book.

• More trading combos: Spread Trading expands the range of supported combinations, allowing for Perpetual & Expiry and two Expiry contracts, providing greater flexibility.

 

 

 

What assets and instruments are supported in Spread Trading?

Currently, BTC, ETH and SOL are supported as base assets, and any new Expiry contracts for these assets will be automatically available in Spread Trading. We also support USDT Spot, Perpetual and Expiry contracts. Stay tuned for more assets and instrument types in the future.

 

 

 

What trading combinations are supported in Spread Trading?

Currently, we support Spot & Perpetual, Spot & Expiry, Perpetual & Expiry and two Expiry contracts with different expiration dates (e.g., Quarterly vs. Bi-Quarterly).

 

 

 

What margin modes are supported in Spread Trading?

Cross Margin and Portfolio Margin modes are available for Spread Trading. Isolated Margin mode is not supported at the moment.

 

 

 

What is the order price in Spread Trading?

In Spread Trading, the order price represents the spread between the far leg's entry price and the near leg's entry price, which can be positive, negative or zero.

 

Order Price = Far Leg's Entry Price – Near Leg's Entry Price

 

 

 

Is a spread considered to have increased or decreased based on its numeric value or the absolute difference?

It's based on the numeric value. For example, if your entry spread (order price) is -100 and it changes to -80 at exit, the spread has increased. If it changes to -120, it has decreased.

 

 

 

What are the possible profit strategies?

Here are four potential strategies that may help you generate profits:

 

Strategy 1: Spot & Perpetual (Funding Fee Arbitrage)

• Bullish on the market: Sell combo — buy Spot & sell Perpetual

• Bearish on the market: Buy combo — buy Perpetual & sell Spot

When the market price rises, the funding rate turns positive, meaning long position holders pay funding fees to short position holders. By buying Spot and shorting an equivalent Perpetual position, you can earn the funding fees. This strategy is often referred to as positive arbitrage. The reverse applies when the market price drops.

 

Strategy 2: Spot & Expiry (Carry Trade)

• Sell combo — buy Spot & sell Expiry

When an Expiry contract is trading at a premium to its underlying Spot price, you can go long on Spot and short on Expiry in equal quantities. As settlement approaches, the two prices naturally converge, allowing you to close both positions and capture a profit equal to the initial price difference.

 

Strategy 3: Expiry & Expiry (Futures Spread)

• Buy combo — buy the farther-dated Expiry & sell the nearer-dated Expiry

If the price difference (spread) between the two contracts increases when you exit, you'll lock in a profit.

 

• Sell combo — buy the nearer-dated Expiry & sell the farther-dated Expiry

If the price difference (spread) between the two contracts decreases when you exit, you'll lock in a profit. For more details, refer to Introduction to Spread Trading.

 

Strategy 4: Expiry & Perpetual (Perp Basis)

• Bullish on the market: Buy combo — buy Expiry & sell Perpetual

• Bearish on the market: Sell combo — sell Expiry & buy Perpetual

This strategy follows a similar approach to Strategy 1. Additionally, since Expiry contracts tend to trade at a premium, there's a higher chance to profit by going long on Perpetual and short on Expiry in equal quantities, just like in Strategy 2.

 

Note: These strategies are for reference only and do not constitute financial or investment advice. Be sure to do your own research before making any trading decisions.

 

 

 

Can I trade the individual legs in the regular order book after placing a Spread Trading order?

Yes. Once your Spread Trading order is executed, each leg will become a separate position. You can close them via Spread Trading or trade them individually in the regular order book.

 

 

 

Is the liquidity in Spread Trading shared with regular trades?

No, liquidity in Spread Trading is exclusive to Spread Trading orders. Trades are executed separately from the regular order book, meaning these orders are not visible in the regular order book, and vice versa.

 

 

 

What happens if liquidation occurs in Spread Trading?

Spread Trading is simply a method of order placement. Once executed, orders function like regular trades and follow the standard liquidation process. For more details, please refer to Trading Rules: Liquidation Process (Unified Trading Account).

 

 

 

Who is eligible for Spread Trading?

Only users in non-service-restricted countries or regions where derivatives trading is permitted can access Spread Trading.

 

 

 

What are the fees in Spread Trading?

The fees for Spread Trading are 50% lower than executing the two legs separately in the regular order book. VIP users enjoy the 50% discount based on their existing VIP fee rates.

 

 

 

How is P&L calculated for orders placed via Spread Trading?

The P&L for Spread Trading orders is calculated the same way as it is for regular orders. To learn more about how P&L is calculated for USDT contracts, check out this article.

 

 

 

If one leg (e.g., the Expiry contract) in my combo expires, will the other leg be automatically settled?

No, Spread Trading simply makes it easier to place spread orders. Once both legs are executed and the positions are open, they behave just like any other trades, meaning you'll need to manage them actively.

 

 

 

Can orders from Spread Trading be partially filled?

Yes, Spread Trading orders can be partially filled. However, they follow the principle of atomic execution — both legs must be filled with matching quantities, or the order won't execute at all.

 

 

 

Are profits guaranteed in Spread Trading?

No, Spread Trading doesn't guarantee profits. It simply provides a seamless way to enter trades, reducing the need to place and manage multiple orders separately. Your profitability depends on your strategy and market conditions. Always conduct your own research before trading.

 

 

 

 

To learn more about Bybit Spread Trading, check out the following articles:

• Introduction to Spread Trading

• How to Get Started With Spread Trading