Bybit Sub-Accounts: Easy Setup & Management Guide

A typical ByBit trading bot can be connected to the CEX via API using the subaccount ByBit feature which is a new way of limiting access to investable capital while maintaining a certain level of flexibility. If you have capital that you want to be managed by a hired professional, using this new functionality is a great idea.

Using ByBit sub-accounts for portfolio separation

The feature was implemented to allow investors to better manage finances and work with financial advisors or trust managers. However, it can also be used for other purposes. Let’s talk about potential applications:

●        Giving access to friends and family. If you want to allow your close ones to monitor finances and even make trades, splitting your portfolio can be a good idea.

●        You can hire a manager. Trust management is still a big deal in the world of investment. If you do not feel confident engaging with the market, you can find someone who will do it for you.

●        Managing different types of strategies. Many investors think that managing different access points to your capital is necessary only when you have someone else using or viewing your portfolio. However, you can have third-party services like automation vendors and portfolio trackers to use them securely.

These are the most common applications for secondary accounts. Some people find niche uses like preventing themselves from depositing more than necessary or making trades using a limited size of investable capital.

ByBit sub-account features

These can be incredibly useful to many crypto investors who want to use a variety of financial services and securely manage their assets deposited to this particular centralized exchange. Here are the most important features that you must be aware of:

●        It has a separate balance from the main one and cannot use the funds that are not directly moved to it.

●        It can open and close market positions, use investment products, and move funds back to the main balance.

●        It cannot deposit or withdraw funds or be used to otherwise interact with the client’s general settings.

In essence, it is a way to give someone or something an ability to use to a portion of your investable capital. It can be a trust manager, a legal advisor, or a third-party provider connecting to the exchange using your credentials via API. Note that if you want to engage in automated trading using secondary access points, you will need to use a separate API key (which will be available to you after the creation of a sub).

The process of making one for various purposes is not complicated. However, one should always remember security measures and precautions like using different login and password, setting up multi-factor authentication, and never sharing details and sensitive information with people who are trusted with keys to your subs.

Creating sub-accounts on ByBit

This centralized exchange is known for its user-friendly UX/UI design and streamlining of as many processes as possible to ensure that all users have an easy time using all of the services including the creation of subs. Whether you need one to run a trading bot on the platform or plan to allow a professional to handle your financial operations, it won’t take too long to set everything up.

Below is a step-by-step instruction on how to do it:

1. Log in to your main account on the exchange using your credentials.
2. Click on the relevant item in the menu under the profile icon.
3. You will be redirected to the management page where you need to click the button to create it.
4. Select the type of that you need (standard, custom, or custodial trading).
5. Create a new set of credentials that will be used to log in to the CEX.
6. You can now enter the exchange using the button “Log in with Subaccount”.

While you may be interested in adjusting the settings of the new sub to make it more suitable for certain activities, it still takes just a couple of seconds to set everything up. Note that your main account must be fully verified and multi-factor authentication must be enabled.

If you have Google Authentication to protect data and verify authorization, it will also be used for the sub. However, you can turn it off by doing the following:

1. Go to the Subaccount management page and find the one you want to disable Google Authentication for.
2. Click “Settings” and navigate to “Account Security” in the pop-up menu.
3. Click “Unlink” Google Authentication and use the code from Authenticator to confirm the action.

Note that disabling security features should be done with caution. Make sure that you are giving access to an unprotected sub to people you trust.

A short set of tips on how to use it effectively

To use “subs” effectively, you need to know some nuances that we will cover in this section. Let’s start with the obvious. There are three types of “subs” that you can create:

1. Standard is the one that does not need a second password and can be entered only by using the switch feature.
2. Custom ones must be protected by a different set of usernames and passwords. It can be used to log in using the appropriate login page.
3. Custodial trading is used to entrust other people with the ability to manage investable capital. It is designed to work as a safe way for investors to allow professional managers and third-party services to access the CEX on your behalf.

Choosing the right type is important but not essential since you can simply delete subs that you don’t want or create by mistake. In most cases, a custom sub is more than enough to provide the necessary operational flexibility to investors. However, a custodial one can be a good solution if you plan to use third-party financial services or hire a professional who will need separate, all-day access to the CEX.

Here are some additional nuances that you should know before trying to make a sub:

●        You won’t be able to use the switch functionality for Custodial Subs, frozen accounts, or when the permission to use it is turned off.

●        Using the “Log in using Subaccount” button on the login screen will prevent you from switching to the main account.

●        Deleting or freezing a Sub is done in the settings on the management page. Note that deletion is permanent and irreversible.

●        You can create an Islamic version of it if you need one. Shariah-compliant subs can be created by all users of the platform.

Transferring assets and investable capital

Moving funds between the main and sub is not prohibited if you are doing it from your main. However, the sub can only move funds back to the main and cannot initiate an incoming transfer. You can move funds from the Assets page of the profile management section of the CEX.

Here’s how you can do it:

1. Click “Transfer” in the actions column of the Assets Page.
2. Switch to “Across Subaccounts” in the new tab.
3. Pick the appropriate source and destination for a transfer.
4. Click “Confirm” to finalize the operation.

It is possible to set up a DCA trading system on the website and regularly transfer acquired excess assets to the main for storage while limiting the investable capital available to the sub. It is a good setup for an automated trading system (ATS) deployed with a specialized vendor that connects to the CEX via API.

Transferring rewards

The CEX allows investors to accumulate incentive points that can be categorized by the markets in which they are received:

●        Derivatives bonuses and coupons (fee savers);

●        Spot fee savers or coupons;

●        USDC holding bonus and coupons (fee savers);

●        Passive Earn ARP Booster for savings programs.

If you did not use these rewards and still have them, it is possible to move them to the newly created sub. Here’s how you can do it:

1. Go to the Rewards Hub in the upper menu.
2. Navigate to “My Rewards” on the new page.
3. Pick the reward you want to manage.
4. Click “Transfer Reward” and choose your sub.

Note that these bonuses and perks cannot be used by Master Trader and Custodial Trading Subs meaning that only standard and custom can use them. Rewards can be incredibly useful in many cases and you should never allow them to expire. If you decide to spend more time trading with your Sub to limit the reachability of investable capital, transferring your rewards is a must.

How to use sub-accounts on ByBit for API connections

Note that only Custodial Trading and Master Trader Subs can have separate API keys allowing you to connect various third-party providers and software. When using automated trading systems (ATS), you can connect them to a sub to further increase the level of safety and prevent overexposure to risks by limiting the size of investable capital accessible by bots.

Contemporary robots can be used for a wide range of purposes and even manage massive portfolios. For example, WunderTrading offers an AI-assisted statistical arbitrage system that can analyze the market history, identify patterns, and find new ways to adjust portfolio composition to ensure that it stays profitable. Using such tools can be very effective for many crypto investors.

To integrate a third-party instrument capable of running sophisticated strategies like the aforementioned AI-enhanced statistical arbitrage bot, you can use a separate API key which is available on the Subaccount management page.

Here’s a simple step-by-step instruction on how to make a new set of API keys:

1. Click the profile picture and choose API.
2. On the new page, click “Create New Key”.
3. Adjust the settings and make it for subs only.
4. Click “Submit” and you will have a new key on the API management page.

You can use it to establish a link to any third-party provider. We will use WunderTrading as an example. To create a new strategy and run something like a grid trading system with this platform, you will need to do the following:

1. Go to the dashboard at WunderTrading.
2. Click “My Exchanges” in the left menu.
3. Find “ByBit” in the table and click the “+” icon.
4. Click “Real Account” in the pop-up menu.
5. Switch to “Connect with API keys” in the new tab.
6. Insert the relevant username, API key, and secret.
7. Click “Connect to exchange” and you will see ByBit among available CEXes.

The whole process takes just a couple of minutes and does not require you to jump through endless hoops just to get started.

Here are some tips to use subs effectively for ATS deployment:

●        Make sure to limit the size of investable capital and allow robots to use only a portion of your holdings to open new positions.

●        Disable Google Authentication when trying to connect using an application-specific interface key as it can create a conflict and disrupt the connection.

●        You can limit which digital assets can be accessed with a sub and do the same when creating a new robot on WunderTrading.

●        Create new keys for each new connection if you want to stay safe and ensure that your funds cannot be used without authentication.

We strongly recommend using multi-instance strategies on WunderTrading to take full advantage of using an alternative point of entry as it will have the ability to work with all digital instruments. The AI-enhanced statistical arbitrage system, HFT strategies, and market-making bots can be extremely efficient in this centralized exchange. Use them with a sub to optimize all operations.

Don’t forget that you can only use Custodial and Master types of subs to allow API connections with third-party providers.

The main takeaway

Subaccounts are excellent tools for many strategies. You can limit yourself and avoid depositing too much if you are still learning how to trade cryptocurrencies. It is possible to allow a professional to handle the investment process on your behalf and have free access to management functionality without the ability to deposit or withdraw funds. Lastly, you can simply link a third-party provider via a new API key dedicated to a sub and make the connection even safer.