Deribit cryptocurrency derivatives

Deribit 

Deribit cryptocurrency derivatives trading platform appeared in Amsterdam in 2016. Deribit offers BTC and Ethereum futures .

Technology platform 

The technology platform is impressive. The whole structure of the platform has been designed in such a way that it can process a large number of requests with ultra-low latency (<1ms).

Trading Charts / Trading Review 

Apart from the amazing and responsive website, Deribit also takes the technical analysis needs of its traders very seriously. This is evident as the platform has included a trade view charting kit in its online platform. This charting suite has many built-in indicators and a very clean and easy to use charting interface. It helps traders to carry out technical analysis without problems. These charts are very customizable, easy to navigate and very efficient for traders.

Deribit Fees 

Deribit derivatives trading platform uses the Maker and Takers fee structure to open and close positions on its platform.

For futures contracts: Deribit charges a flat fee of $10 per futures contract. There is also a creator fee of 0.02% of the base contract size and a receiver fee of 0.05% of the base contract size that is added to this flat fee.

For options trading: Deribit charges a flat fee of 0.04% for each options trade made. This fee of 0.04% covers the fee for both creators and recipients and is deducted from the size of the underlying position.

Liquidation Fees

This commission is withheld when the open futures contract or option position is closed. Deribit charges a liquidation fee of 0.35% per futures contract. Deribit also charges a liquidation fee of 0.19% per option contract.

Delivery fee 

These fees are charged for the execution of a specified contract or options trade on a specified date in the future. Deribit charges a delivery fee of 0.025% for any futures contract and 0.02% for options trades. Deribit derivatives trading fees are some of the lowest in the industry.

Leverage 

Deribit crypto derivatives trading platform offers its traders two types of leverage. Leverage depends on what you want to trade.

In the futures market for Deribit crypto derivatives trading, you can use up to 100x leverage. In the less popular options market, leverage is 10x.

However, Deribit also requires that all trading accounts maintain margin requirements of 10% and 3% on all of your open positions. As soon as the account balance falls below the margin requirement, Deribit will automatically begin to close open positions. This is necessary to free up funds and provide the necessary margin for the account. In this way, the platform can prevent excessive losses for traders.

Two-factor authentication 

Deribit also implements a two-factor authentication method for its users when they perform any important events on their accounts. For example, withdrawing funds, changing the account password, or editing various user functions on the platform.

Notifications 

Deribit also uses notification as a warning to users when certain types of events occur on a user's account. Thus, the user, having received a notification, can take measures so that illegal transactions are not carried out with his account.

Deribit Insurance Fund 

Deribit also offers insurance coverage for customers' deposited funds. Thus, both the company and all its traders are protected, even when any trader suffers huge losses or becomes bankrupt.

This insurance is used to limit losses and ensure that the company's customers receive money no matter what. The move also paved the way for other exchange platforms and boosted traders' confidence in the company.

Support service 

It is important that the trading platform you use has customer support. This makes solving various problems that you may encounter along the way very simple and easy.

By trading Deribit crypto derivatives in the Philippines you can get 24/7 support. 

The support service consists of a back-up professional team that knows the platform well. The Deribit website also has an FAQ section that provides detailed answers to many questions. These are the most common problems that traders usually face when using the platform.

However, if the FAQ section does not suit you, you can request assistance by contacting the support team via email or live chat.

Derivatives 

Derivatives are financial instruments that are based on another asset. 

The simplest example is an agreement to buy bitcoin on a specific date and at a specific price. It is based on the value of the coin at the time of the conclusion of the contract. Such a derivative is called a futures and it is a derivative instrument from bitcoin. In addition to cryptocurrencies, an asset can be commodities, currencies, loans, stocks and other securities.

On the exchanges, there is a division into spot trading and derivatives trading. In the first case, the trader buys or sells one coin for another. In the second case, the trader replenishes the account with bitcoin or another cryptocurrency. When concluding an agreement - a derivative - a part of these coins is blocked by the exchange as collateral. To get the deposit back, you need to fulfill the obligations under the contract. If the transaction is successful, the trader receives back the deposit and profit. That is, there are more bitcoins in his account. If the transaction was unsuccessful, he does not receive the deposit back and the coins become smaller.

Why use derivatives? 

In normal cryptocurrency trading, a trader has several limitations. Firstly, he can earn only one way - to buy cheaper and sell more expensive when the asset rises in price.

Derivatives provide an opportunity to earn not only on growth, but also on falling prices. 

For example, Bitcoin has risen in price and the trader is sure that the price will fall soon. Therefore, he uses a special subspecies of a derivative - short (short) - which will allow him to take a loan in bitcoin and immediately sell it, and return it later when the price falls. That is, he will borrow 1 BTC and immediately sell it. When the price falls, he will buy 1 BTC, repay the debt and stay with the profit.

Secondly, the profit of a trader in ordinary trading is limited by the capital available to him. If the capital is small, then the profit is correspondingly small.

Derivatives provide the opportunity to trade with leverage. That is, the trader borrows funds from the exchange against the security of the balance in his account. For example, x10 leverage increases income by 10 times. But such trading increases the risk of losing collateral, that is, the trader's balance. 

Derivatives types  

There are 16 types of derivatives in total. There are 5 of them in cryptocurrencies: perpetual contracts, futures contracts, exchange-traded funds (ETFs), swaps and options. Now let's briefly talk about the two most popular.

Deribit cryptocurrency derivatives in the Philippines are represented by futures and options.

Futures 

Futures trading refers to a method of speculating on the price of assets, including cryptocurrencies, without actually owning them. 

Similar to commodity or stock futures, cryptocurrency futures allow traders to bet on the future price of a digital currency.

There is not much difference between conventional trading and futures trading. This is because traders in both cases are doing the same thing - going long and short and using the right risk management techniques.

However, futures contracts are very different from spot trading because they do not deal with the underlying asset, but only with their price action. Without a real asset, futures are much more fluid and easier to manage. In addition, they allow margin trading with high leverage.

What are futures contracts? 

Initially, futures contracts were traded on many commodities such as food, oil and metals. However, they soon went beyond their original assignments and conquered all financial markets, including cryptocurrencies. Today, most commodity price quotes you see on financial portals include futures, usually with a one-month expiration date.

In short, a futures contract is an agreement between two parties to buy or sell an asset (such as a digital currency) on a predetermined date and at a predetermined price. The contract tracks the underlying asset, be it a commodity, stock, or cryptocurrency. In fact, this is a kind of bet on the future movement of the asset price.

For example, if you think that Bitcoin (BTC) will rise in price by the end of the month, you go long by buying a Bitcoin futures contract with a one-month expiration date. Otherwise, if you think that the price of bitcoin will fall, you will open a short position. When the contract expires, both parties involved in the trade are settled and the contract is closed.

One of the terms of a futures contract is its expiration date, but there is a sub-category of cryptocurrency futures called perpetual contracts. What sets Perpetual Contracts apart from the rest is that they do not have an expiration date, as the name implies. All unlike traditional futures, there is no predetermined end date and settlement.

The price of a perpetual contract tracks the spot price of the cryptocurrency and trades very close to it. The main mechanism that makes perpetual contracts possible is the interest rate that long and short contracts regularly pay each other depending on the market situation.

Options 

An option is a contract that provides for the right of the option holder to buy (Call) or sell (Put) the underlying asset within a specified period and at a certain price, such a price is called a "strike".

The duty of the option writer is to sell or buy the asset on the expiration date of the option at a specified price. The buyer receives a right, not an obligation. This is the key difference from futures. The buyer of the option may not enter into a deal until the end of the contract. In the case of futures, he has no such right. For his right, the buyer of the option pays the seller a certain amount, which is called the option premium.

How to trade? 

Deposit Method 

It is not difficult to top up an account as the exchange platform allows users to fund their trading account using only bitcoins.

This deposit process does not require any commission and is quite easy to complete. All you have to do is log into your Deribit account and click the "Deposit" button to generate a Bitcoin wallet address. Then you transfer bitcoins to the wallet address. Once the transaction is completed, you will receive a confirmation message.

If you don't have bitcoins, you will have to buy bitcoins before using Deribit.

Withdrawals 

The withdrawal method is very similar to the deposit method and requires you to have a Bitcoin wallet. You can receive funds in your personal wallet. Withdrawals on the Bitcoin network are usually subject to a fee. This commission is not paid to Deribit, but is paid to the miners of the network. The Bitcoin network fee varies from day to day, but is very small. Typically, a $10,000 transaction will incur a fee of no more than $1.

Also, before you are allowed to complete your withdrawal, you need to complete two-factor authentication. This adds an extra layer of security to your funds. Deribit uses this feature to ensure that transactions are carried out by a legitimate user.

Earn money with Deribit - it's a great resource for online trading!