Deribit Bitcoin Trading Platform
Deribit – The best alternative to Bitmex
Deribit is a trading platform which specializes in futures and options on Bitcoin. In fact, the name of the platform “Deribit” is derived from the words “Deri for Derivatives” and “Bit for Bitcoin”.
Established in 2016 by its CEO John Jansen, Deribit is based in Stationsstraat, Netherlands. They provide some of the best product offerings for traders from all over the world. They offer traders leverage as high as 1:20 with tight spreads.
Likewise, their futures offerings are open to anyone regardless of location. In August 2018, Deribit introduced a new perpetual swap instrument that tracks the spot market for bitcoin and offers leverage of up to 100:1. Currently, in beta, the Deribit team plans to do the same for Ethereum as well.
Top Platforms to trade Bitcoin and Ethereum
Creating a Deribit account
An account can be created on Deribit in a few easy steps. The first step is by going to their website Deribit.com and click on create an account. This will automatically redirect you to a new page and you will be requested to provide an email, alias/nickname, and password for your new account. After that has been done, check the “accept terms and conditions” box beneath and then click submit. You will then get a prompt informing you that your account creation process was successful and that you need to click the confirmation link sent to the provided email address. Please note that you get a few verification emails after clicking on the link; these are not spam. New users can commence trading after six network confirmations. Hence, depending on how fast you read, and assuming you do not need to buy bitcoin, you should be able to finish this review and begin trading deribit derivatives within 15 minutes.
Derivative trading at Deribit
Deribit is among a few platforms around the world that exclusively offers Bitcoin options to traders. The trading accounts are set up with a margin requirement of 10% for every trade, and you are required to maintain a 3% margin on your trade. As soon as your margin falls below the 3% maintenance margin, your positions will be automatically liquidated until the margin balance surpasses the maintenance margin.
Deribit offers monthly and quarterly terminations on both options and futures, as well as a new “perpetual swap”, modeled on bitmex. The perpetual swap is fixed to the spot market using a premium, which is applied every 8 hours, which charges a fee to ensure trading stays relatively close to the underlying instrument. For example, if deribit bitcoin perpetuals are trading higher than the original index, then buyers (longs) will pay the sellers (shorts) a certain amount. If your position is liquidated, a higher fee is charged, the majority of which is used to finance an insurance fund. In the event that options smaller than 1 BTC are being traded, fees are capped at a generous 20% of the option price. Note that a negative fee indicates a refund.
Future contracts are sold for $10 with the leverage set at 1:10. As for the mid-market price, it is an index called the Deribit index and is gotten from the average prices from 5 major exchanges. The expiration price also uses the average of the Deribit index but is derived from the prices indicated for every 6 seconds starting from 30 minutes prior to the trading day settlement.
Placing a market order is simply done when you offer more than the asking price on the order book. Also, you can minimize risk by selecting “post only” so the order does not get matched instantly. Once placed, the order will then move to open orders or positions. You can still edit or cancel the order under the open order tab. However, the platform does not allow you to trade protections such as stop loss or take profit. Also, you cannot close your position under the open order tab. To set your stop loss, take profit level or close your position, you have to do it from the trade slip.
Deposit and Withdrawal Options
Deposits and withdrawals can also be done via Bitcoins. To deposit your Bitcoins, simply log in to your account and get the deposit address. Also, there is a QR code in the wallet platform which you can scan to obtain the address. To avoid any errors, a minimum deposit of 0.001 BTC is recommended.
Similarly, you can also withdraw by making deposits into your bitcoin wallert. Once you log in, click withdraw and you will be automatically redirected to the withdrawal page. Proceed to make your withdrawal by providing your wallet address, stating the amount you intend to draw. After you entered the amount to be withdrawn, the fee will be automatically calculated. The amount of the fee will depend on the priority level that you have selected.
Fees and Charges
Apart from the futures contract price of $10 per contract, there is also a Maker fee of 0.02% and a Taker fee of 0.05%. For options trading, the underlying fee is 0.04% per option contract for both makers and takers.
Other applicable fees included the following:
- 025% Futures
- 02% Options
For options, the fee is not more than 20% of the option’s value.
- 15% for futures trades (0.1% will go to the insurance fund)
- 1% of the underlying option contract
Privacy and Security
Unlike most bitcoin trading platforms where users are required to register and be verified; verification which takes days in some cases, Deribit does not require such, Users can open their account, fund it with relative ease by transferring their bitcoins to the stated wallet address and start trading. The sole reason why Deribit doesn’t require any verification is that the platform deals exclusively in Bitcoin. As for the security of the platform, it should be noted that 90% of the Bitcoins are kept in cold storage.
As for the customer support at Deribit, there is a highly comprehensive FAQ’s section of the site which you can access from inside the trading platform. Additionally, to get any assistance from the support team, you need to contact them by email or through live chat.
- Can trade in futures as well as options
- Hassle free account creation process
- Have fund insurance protection
- Reasonable fees
- Fast Deposits & Withdrawals
- Multi-Currency Exchange
- Secure Platform
- High Fee’s
- Does not support altcoins
- Not Beginner friendly
Deribit is a Dutch cryptocurrency derivative trading platform. They provide Bitcoin futures and options, while account types are also in the most popular cryptocurrency. Deribit is able to facilitate hundreds of transfers per second from each individual account and streams all data on the platform in real time. Interestingly, the Deribit platform is built on the same ERLANG/OTP stack that is used for Whatsapp, allowing for extremely low latency and a huge amount of concurrent users.