You’ll need an exchange that allows for crypto derivatives trading if you want to start. Some of the best cryptocurrency exchanges you already use support derivatives trading. Since it’s not been around for long, a lot of exchanges are still adding these features for traders. We went in search for the most widely used and trusted ones so that you don’t have to.
Here are the best derivative exchanges:
Let’s review them one by one
6 Best Derivative exchanges for Crypto:
Bybit hasn’t been in the crypto market for long. What makes it a good platform is that its main purpose is to cater for crypto derivatives trading. It supports four derivative pairs, including BTC, ETH, XRP, and EOS. These crypto-assets are all paired against the USDT.
You can only fund your account through crypto. There’s no support for a credit card or wire transfers.
Bybit’s team claims the platform can process up to 100,000 transactions per second. This makes it powerful for both individual and institutional traders.
For user experience, Bybit is clean. It’s built to appeal to newcomers and veteran traders alike. There are a lot of basic educational resources for newbies to learn trading on the platform. Traders can easily access Bybit on any browser or download its mobile app.
Read: Bybit review
You can deposit any amount of your choice. But there’s a minimum withdrawal amount depending on the crypto asset. We outline this below:
- Bitcoin: 0.0005BTC
- Ethereum: 0.01ETH
- Ripple: 0.25XRP
- EOS: 0.1EOS
Newcomers on Bybit get a bonus of $90.
2. Binance Futures account
Binance which is the #1 exchange for spot trading, rolled out margin, and futures trading in past few quarters. Unlike other platforms that support just a few cryptos, Binance supports a whole lot. Apart from BTC, ETH, BCH and a few popular ones, Binance also supports over 25 altcoins.
Fees are also reasonable on the platform. There’s no fee if you’re depositing. For traders, both takers and makers pay 0.04% on each trade. And the withdrawal fee is 0.0005 BTC for all derivative traders.
Comes with two-factor authentication for users. And there’s good customer support. The downside is that the platform isn’t available for US traders. But you can still trade if you use a VPN.
Bitmex is a popular crypto exchange where you can trade derivatives. It’s been in the game since 2014 and has grown as a good platform for many traders. The platform offers weekly futures contracts, daily contracts, and swaps. You can trade margins, futures or perpetual contracts.
The platform supports only Bitcoin for the transaction. Thus, withdrawals, deposits, and transaction fees are all done in BTC. And it also supports Ethereum, Cardano, Bitcoin Cash, Litecoin, Ripple, and Tron for trade purposes. While you may trade pairs in these assets, you have to withdraw or deposit in only BTC.
Market takers pay 0.075% per trade and makers get a 0.025% rebate. This is a refund given to makers for providing liquidity for the platform.
Read: Bitmex review
There’s 24/7 support for traders who need help. Bitmex stores some of your crypto on a cold storage for safekeeping. There’s also a two-factor authentication to prevent malicious parties from accessing your account. Bitmex supports English, Japanese, Chinese, Korean, and Russian.
The exchange has a vast variety of products in the derivatives market and almost 90% of the exchange’s volume is generated through derivatives products only.
Following are the derivative products offered by FTX Exchange:
- Non-inverted Futures Contracts
FTX has non inverted Futures Contracts which are denominated in stablecoins. For Example: a BTC futures contract is BTC/USD and not USD/BTC
There are 2 types of contracts:
- Quarterly – these futures expire at the end of the quarter in which they are issued
- Perpetual – these futures don’t expire. Instead, every hour, each perpetual contract has a funding payment where longs pay shorts or vice versa. This helps to keep the price of the perpetual futures in line with the price of the underlying index without ever closing down positions for expiration.
- Prediction Markets
These are the futures contract through which you can bet on a real world event. This is a digital form of traditional betting.
Few of the prediction contracts available are as follows:
- Trump 2024 – TRUMP-2024 is a futures contract on FTX. It expires to $1 if Donald Trump wins the 2024 US presidential general election, and $0 otherwise.
- Superbowl Futures – NFC-SB-2021 (National Football Conference Superbowl 2021) is a futures contract that expires to $1 if a team in the National Football Conference wins the 2021 United States Superbowl, $0 if a team in the American Football Conference wins, and $0.50 if there is no winner by July 1, 2021.
- All the options are priced on Black-Scholes Model
- A user can buy a call or put open to hedge his or her market portfolio to substantial market deviations
Why futures contracts listed on FTX are different:
- FTX futures are stablecoin settled: you deposit stablecoins as collateral for all of the futures, and your profit or loss is settled in stablecoins. This means that you get legitimate USD-based price exposure and settlement, without needing a bank account; you can also use the same base currency as collateral for all of the contracts, making it easy to shift your positions around.
- FTX futures have a unique backstop liquidity provider program which jumps in to provide to accounts in danger of bankruptcy, helping to avoid clawbacks.
- FTX futures have careful, measured margin calls to avoid large price dislocations.
FTX has futures for many tokens such as BTC, ETH, EOS, XRP, USDT, LTC, ADA, and many more.The collateral for the futures contracts is in stablecoins.
The USP of the exchange is its team which has relevant and dynamic experience in the crypto and traditional trading sector. FTX team comes from some leading Wall Street quant funds and tech companies: Jane Street, Optiver, Susquehanna, Facebook, and Google. The team has ample exposure to the traditional secondary market. Members have backgrounds in equity derivatives trading and seem to have an understanding of how derivatives are traditionally designed, and what kind of derivatives are in demand.
Deribit is another great exchange for crypto futures and options trading. It started in 2016 and has built a user-friendly platform for derivative traders. Deribit is open to traders in over 100 countries. It comes with no fee deposit and free withdrawal options up to certain amounts. And only allows for the buying and selling of Bitcoin futures and options.
Supported trading coins:
Deribit has a lot of features. It offers dashboards for trading history, recent trades, and order books. It also has statistics for futures, index, volatility, and technical indicators. Deribit’s interface appeals to a newcomer and serves as a powerful tool for veterans.
You can trade via its web portal or download an Android/iOS app. Deribit supports many trading bots and uses cold storage to keep your assets safe.
Market takers pay 0.075% on trades while makers pay 0.025%. For withdrawals, traders pay 0.0006BTC per withdrawal. Deposits, withdrawals, and trades are in BTC only. There’s 24/7 support for traders. Deribit supports English, Korean, Spanish, Russian, Japanese, Chinese, and Turkish.
To trade, you need to create an account, make a deposit, and choose either futures or options trading. Their blog has helpful content if you get stuck.
You’ve either used it, heard of it, or seen a different trader use it. OKex is a big name in crypto with support for many assets. It is the top exchange for derivatives trading according to CryptoCompare.
OKex offers a lot, including perpetual swaps, futures, and margins. It supports nine cryptocurrencies in its derivatives market.
If you want to trade with particular crypto, you have to fund your account with that same asset. For instance, traders who want to trade bitcoin futures must fund their account with BTC. Thus, an Ether contract requires ETH. Litecoin requires LTC, which is the same for all the nine assets OKex supports.
There is also a beginner knowledge quiz for newcomers going into futures and swaps. The test is simple, so don’t skip it. OKex wants traders to come into their derivatives market with a little knowledge of how things work. The quiz lets you learn margin calls, swaps, futures, funding, and withdrawal schedules on OKex.
Another cool part about Okex is its Customer to Customer dashboard (C2C). The C2C allows you to pair your derivatives trade with six fiat currencies. Currencies include Euro, Turkish Lira, Pound, Renminbi, Rubbles, and the Vietnamese Dong. This allows you to make trade in a currency of your choice. And you won’t have to suffer exchanging from one currency to the other when withdrawing your funds.
In general, OKex is a great place to trade crypto assets.
Which crypto derivative exchange should you be using?
There are a lot of factors you need to consider to pick the best derivative exchange for you. If you are looking for something simple, and powerful pick: Bitmex.
Bitmex doesnot require KYC, which is another plus point.
They are friendly for beginners, and also offers paper trading for you to practice derivative trading.
For high liquidity, Bitmex is a great choice. Their derivative trading fees is the highest among these three, but they are the oldest and offers one of the highest liquidity.
For those looking to trade in more coins, Binance futures is definitely an idle choice. Unfortunately, both these exchanges are not available for users from the USA, and you could use it only by using a VPN.
Over to you:
Let me know which crypto derivative exchange are you using and why? If we like your recommendation, will include this in our list of top exchanges for crypto derivatives trading.
Harsh Agrawal is the Crypto exchange and bots expert for CoinSutra. He founded CoinSutra in 2016, and one of the industry’s most regarded professional blogger in the fin-tech space.
An award-winning blogger with a track record of 10+ years. He has a background in both finance and technology and holds professional qualifications in Information technology.
An international speaker and author who loves blockchain and crypto world.
After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.
Join us via email and social channels to get the latest updates straight to your inbox.