What Is the Deribit Exchange?
Stock markets around the world offer futures and options contracts to investors. These contracts allow investors to speculate on the price action of commodities or other underlying assets. Futures and options are attractive investments in todays stock market, giving investors exposure to the price of commodities, stock market indices, and various other derivative instruments.
Deribit is one of the first crypto exchanges to offer traders futures and options contracts on Bitcoin. One of the most attractive points about trading with Deribit comes from its use of leveraged products. Leverage describes the ability to gain exposure to larger amounts of money for your trade.
Deribit provides up to 100X leverage for your contracts. This 100X leverage means that if you have $100 to invest, you can purchase futures contracts to the value of $10,000. Other platforms and exchanges offer you BTC futures and options. However, Deribit specializes in this trading, and we feel they have the best, and most affordable, offering.
How Do You Start with Deribit?
Logon to the Deribit exchange and create a free user account. Since Deribit is an unregulated exchange, you don’t have to worry about verifying your identity, since you won’t be dealing with any fiat currencies for deposits and withdrawals.
After signing up, you can fund your account by clicking on the deposit button on your dashboard. By clicking the deposit icon, you create a deposit address allowing you to transfer your BTC to your trading account for use on the platform.
Deribit uses a web-based trading platform, and your dashboard has all of the trading tools you need for analysis. You get access to trading history, order book, and your recent trades, all from within your dashboard.
The trading platform also includes index, futures, and volatility charts, as well as a range of technical indicators to help you with your trade analysis.
You have the option of managing your account using the iOS or Android application for your mobile device. Deribit also integrates with other trading bots like BotVS, HaasOnline, and Actant. We like the fact that Deribit secures 95% of its user’s funds in cold wallet storage, mitigating the risk of a hack.
What Cryptocurrencies Does the Deribit Exchange Support?
Deribit only works with Bitcoin. It doesn’t provide any trading opportunities for other cryptocurrencies.
The platform only works with margin and derivatives trading, and specifically BTC derivatives, meaning that there are no other cryptos available for purchase on Deribit. The platform offers you 10X leverage for trading, and up to 100X leverage for derivatives.
The futures contracts are standard and come with monthly strike dates for expiration. Deribit compiles its trading and price data from other leading exchanges, such as Bitstamp, Coinbase, Bitfinex, Kraken, and Gemini.
Deribit sells BTC futures contracts for $10, offering you order types such as limit, market, stop limit, and stop market.
What Fees Does Deribit Charge?
As mentioned, Deribit specializes in facilitating futures and options trading in BTC. Therefore, you’ll need to deposit BTC into your account before you start trading. This unregulated exchange doesn’t provide any option to buy your BTC with any form of fiat. Instead, you’ll need to go to another exchange like Coinbase and buy your BTC there using USD or another type of fiat.
After completing your transaction on the regulated site, you’ll need to transfer your BTC to your trading account on the Deribit platform. Deribit doesn’t charge you for depositing BTC into your account. However, withdrawals do come with a fee you need to pay to miners on the network for processing the transaction.
Deribit also offers you a taker-maker model for fees, giving you the option of lower fees for adding or making liquidity in the market, as opposed to taking liquidity from the market. Those futures orders that add liquidity to the market receive rebates of 0.02%. Orders removing liquidity from the market come with a fee of 0.05%
Perpetual futures contracts that provide liquidity to the market receive a rebate of 0.025% while taking liquidity results in a fee of 0.075%. You will also have to pay 0.04% of the underlying contract or 0.0004 BTC per options contract. Fees have a cap at 12.5% of the option price.
The fee for liquidating perpetual contracts is 0.375%, while futures contracts cost you 0.35%. Liquidating your options contracts will cost you 0.19% of the underlying asset, or 0.0019BTC per contract.
Deliveries only have half the fees of taker orders, meaning that you pay 0.025% for futures, 0.025% for perpetual contracts, and 0.02% for options.
Is Deribit a Safe Exchange?
Deribit runs a cold storage wallet, meaning that user funds are away from the reach of hackers if they compromise the security on the platform. Deribit also utilizes two-factor authentication, and IP pinning to ensure you have the protection you need to secure your account from hackers.
Deribit started an insurance fund to protect itself from incurring the losses of traders that blow up their accounts and end up in the red. Unfortunately, options and futures are popular with beginner traders due to the simplicity involved with taking the trade.
However, the reality is that it’s just as challenging as traditional trading strategies, and you are at risk of losing more than you have in your account due to the ridiculous 100X leverage on contracts. If you’re new to trading, then you need to ensure you understand leverage and how it works before you start trading.
Deribit Customer Support
The Deribit support team is available to help you with any issues you have with the platform or your account. The site has an FAQ page that features useful information and a Telegram group for immediate chat assistance.
You also have the option of contacting the support team through the company’s Twitter account, or you can open an email ticket with the support team. Deribit also has a YouTube channel that explains the nuances involved with futures and options trading for BTC, as well as other demos of the platform.
Who Are the Deribit Team?
Deribit is a Bitcoin derivatives exchange with offices in Amsterdam, Netherlands. The company incorporated in 2016 as Deribit B.V.
Current CEO John Jansen founded the company with the CTO Sebastian Smyczýnski. This pair of enthusiastic Bitcoin traders keen to create a trading platform that caters to their passion. The company got its name from the inclusion of two words – Derivative and Bitcoin.
The company is transparent, but they are not a regulated platform, and you can only use it with BTC. Deribit does not deal in fiat currencies such as the Dollar and the Euro.