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Bybit Pre-Market Trading: Granting Early Access to Crypto Gems

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Bybit Guide
Mar 8, 2024
6 min read

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The crypto space is rapidly evolving each day, and enthusiasts are constantly on the lookout for innovative avenues to gain an edge. Among these, pre-market trading stands out as a significant opportunity, especially for those looking to access potential crypto gems before they hit the mainstream market. In this article, we’ll explore Pre-Market Trading, Bybit's latest offering, and offer a comprehensive guide on how it operates, the advantages it brings to traders and the potential risks involved.

Key Takeaways:

  • Bybit Pre-Market Trading is a specialized over-the-counter (OTC) platform that allows users early access to trade new cryptocurrencies at desired prices before they’re listed on the main Spot market. 

  • If you’re looking to dive into Bybit Pre-Market Trading, be well prepared with sufficient funds and the ability to finalize your transactions within the allotted time frame.

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What Is Bybit Pre-Market Trading?

Bybit Pre-Market Trading is a specialized over-the-counter (OTC) platform that allows users early access to trade new cryptocurrencies at desired prices before they’re listed on the main Spot market. It facilitates the process for both buyers and sellers to set and agree on prices for trades in advance. Users looking to dive into Bybit Pre-Market Trading need to be well prepared, with sufficient funds and the ability to finalize their transactions within the allotted time frame. Not adhering to these commitments in a timely manner could result in the loss of the collateral you've committed to the trade.

How Does Bybit Pre-Market Trading Work?

Bybit Pre-Market Trading functions through a straightforward yet effective process. Participants have the flexibility to either buy or sell a specific cryptocurrency before its official market release. This setup allows traders to assume either of two roles: Makers, who establish orders at predetermined rates, or Takers, who fulfill existing orders on the platform. 

In order to ensure the integrity of these transactions, both buyers and sellers are required to secure their trades with collateral on Bybit, which acts as a safeguard for the timely execution of trades. This deposited security is refunded following the successful completion of a trade, with all transactions conducted in USDT.

Pre-Market Trading is accessible exclusively to individuals who use a Bybit Unified Trading Account (UTA).

Let’s dive deeper into the mechanics. Participants in Pre-Market Trading can be categorized as either buyers or sellers, each one with specific obligations.

Buyers

If you wish to place a buy order, you first need to pay a transaction fee, in addition to the payment for the order, based on the order’s value. Upon a successful match with a seller, you’ll await the delivery of tokens at the designated settlement time. If the seller fails to meet this delivery deadline, you’ll be compensated with 90% of the seller's collateral, in addition to the return of your initial payment. 

Sellers

If you want to place a sell order, you’ll incur a transaction fee and must also provide a collateral amount (determined by the pledge rate) for your order. Following a match with a buyer, you’re expected to deliver the tokens at the agreed-upon settlement time. It's crucial that you ensure these tokens are readily available in your UTA by the deadline. This means that you may need to deposit tokens from an external wallet, or acquire them on the Bybit Spot market once they’re listed (before settlement time). After you’ve successfully delivered the tokens, you’ll receive your payment in your UTA.

It's important to note that tokens held in accounts other than your UTA, or acquired via pre-market trades, are ineligible for fulfillment. Sellers who fail to deliver the full token amount by the deadline face forfeiture of their entire collateral for the specific pre-market order, where 10% of the collateral will be charged as platform fees.

In addition, keep in mind that only orders yet to be matched can be canceled. Once an order matches a counterparty, cancellation is no longer an option. Moreover, any orders that remain unfilled by the end of the pre-market trading period are automatically canceled.

Benefits of Using Bybit Pre-Market Trading

Participating in Bybit Pre-Market Trading comes with several benefits. First, it grants traders early access to promising cryptocurrencies, often at a more favorable price as compared to their potential future value on the open market. This early access can lead to significant returns on investment as the market recognizes the value of these new tokens.

Furthermore, Bybit’s stringent selection process for pre-market tokens ensures that only projects with solid fundamentals and growth potential are presented to traders, reducing the time and research traders need to invest in scouting promising investments.

Risks of Using Bybit Pre-Market Trading

Bybit Pre-Market Trading isn’t devoid of risks. The primary risk involves the inherent volatility and uncertainty of investing in new cryptocurrencies. Projects can fail to live up to their potential, resulting in losses. Additionally, fixed pre-market prices may not always reflect the true market value of a token post-listing, and can lead to potential market corrections that have an impact on initial investments.

In addition, sellers are particularly exposed to the risk of losing their collateral should they fail to completely and punctually fulfill their token delivery obligations.

On the flip side, buyers are safeguarded to some extent. For example, in instances where a seller falls short in delivering the tokens (either partially, or fails to meet the deadline), the buyer is entitled to compensation along with reimbursement. Conversely, if the seller meets their obligations and delivers the tokens within the agreed-upon time frame, the buyer receives the tokens for which they’ve paid.

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How to Get Started With Bybit Pre-Market Trading

To get started with Bybit Pre-Market Trading, you will first need to sign up with Bybit and upgrade your account to a UTA. You can then create a pre-market order with your UTA and start buying or selling as a maker or a taker. After creating your pre-market order, you can manage it in different ways, such as viewing your active and past orders, and fulfilling or canceling your pre-market order.

Should You Use Bybit Pre-Market Trading?

Whether Bybit Pre-Market Trading is suitable for an individual trader depends upon their risk tolerance, investment strategy and interest in exploring new cryptocurrency projects. For those willing to navigate the risks for the potential of high rewards, Bybit Pre-Market Trading offers a unique opportunity. However, it's crucial to approach these opportunities with caution and informed decision-making.

The Bottom Line

Bybit Pre-Market Trading presents an exciting opportunity for cryptocurrency traders to gain early access to potential crypto gems. While it offers the prospect of significant returns, it's also accompanied by risks that are inherent to investing in new and unproven tokens. As always, thorough research and a calculated approach are paramount in navigating the pre-market landscape effectively.

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