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A derivative is a financial contract between two or more parties based on an underlying asset’s future price. Crypto derivatives are, therefore, tradable contracts between parties regarding the future of an underlying asset, which in most cases, is Bitcoin (BTC) or other top cryptocurrencies. Trading crypto derivatives enables traders to mitigate volatility-associated risks and hedge against potential losses in trading.
In recent years, crypto-derivatives have grown in popularity. The enormous growth in crypto derivatives is largely attributed to the launch of bitcoin futures trading by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) at the end of 2017.
There are various derivatives products in the crypto space, including Swaps, Futures, Forwards, Options, and Perpetual Futures. With the numerous derivative exchanges available in the crypto space, it can be daunting to choose an ideal exchange. This piece will shed light on the nine best exchanges to trade crypto derivatives.
9 Best Exchanges to Trade Crypto Derivatives
Binance is among the oldest and reputable crypto trading exchanges. In addition to spot trading, Binance features margin and futures trading. The exchange supports derivative trading in the form of Binance Futures.
It provides Perpetual Contracts with leverage of up to 125X and margin trading for BTC and altcoins with up to 1:3 leverage. Binance is not available in certain countries, such as the U.S. The platform has a 24h volume of $15, 476, 568, 375 with a daily turnover of 4 billion and allows settlement in cash.
OKEx exchange is a user-friendly crypto futures trading platform that fits both professional and novice traders’ needs. The exchange offers both bitcoin & cryptocurrency futures trading with live charts for enhanced marked technical analysis.
The exchange was recently ranked the world’s largest crypto derivatives exchange according to CoinDesk Research. OKEx is among the leading crypto exchanges regarding BTC futures and providing crypto derivative products beyond the traditional future. Out of the ten major cryptocurrency derivatives exchanges, OKEx offers the second-lowest swaps funding rate at an average of 0.0052%.
The platform offers contract expirations daily, weekly, bi-weekly, monthly, quarterly, and bi-quarterly. This enables traders to execute diverse derivatives trading strategies.
FTX is a relatively new crypto derivatives trading platform that offers a range of innovative trading instruments such as Perpetual Futures, crypto indices, and volatility contracts. The platform also features special FTX leveraged tokens, which are ERC-20 tokens for leveraged exposure to crypto markets.
FTX offers leverage of up to 101x and charges the industry’s lowest trading fees at 0.07% with no deposit or withdrawal charges. Some of the standard security features implemented on the platform include encryption and 2FA. FTX is available in 14 different languages and supports over 30 cryptocurrencies.
Bitcoin Mercantile Exchange (BitMEX) supports crypto derivatives trading and accepts deposits and withdrawals in Bitcoin only. The exchange offers the next generation of Bitcoin trading products with up to 100x leverage on Bitcoin and high leverage on Altcoin contracts.
BitMEX features an advanced API with a feature-rich trading dashboard with all the tools and charts needed to make a trading decision. The exchange employs the latest in multi-factor security and risk management measures, including auto deleveraging capabilities and insurance funds to keep users safe from price manipulation.
C-Trade has gained a great reputation among crypto derivatives traders attributed to its fast and secure trading infrastructure that provides cryptocurrency Perpetual and Futures contracts. The C-Trade platform can handle over 100 000 TPS and comes with updated Spot Price Index and Market Price index systems to ensure trades’ reliability.
It offers Bitcoin perpetual futures contracts with up to 150x leverage, low fees, and high market liquidity. Customer funds are stored in multi-signature wallets with the platform employing manual authorization for withdrawals.
Bybit is a user-friendly, intuitive, and smart platform for Perpetual Contract trading with up to 100x leverage. Users can choose from a wide range of deposit options, including BTC, ETH, EOS, XRP, and even fiat currencies.
Furthermore, the platform offers real-time market data, a customizable trading dashboard, reliable customer support, insurance risk fund, and ADL for risk management. The Singapore-based exchange allows users to make deposits as low as $5 and start trading.
Huobi Future is another excellent digital asset derivatives trading platform that also offers margin trading, spot markets, futures, etc. The platform offers a safe, professional, and efficient digital asset derivative trading service that meets professional crypto derivative investors’ needs.
The exchange offers 5x leverage for spot trading and allows credit card payments. Users are offered secure storage with dedicated multi-signature cold wallets, 24/7 security monitoring, and a dedicated 20 000 BTC Security Reserve Fund.
Kraken Exchange supports crypto futures trading with 50x leverage. The exchange also includes spot and margin trading. Users can easily transfer between Kraken Spot and Kraken Future markets. It’s one of the most secure crypto exchanges and offers relatively low trading fees.
While the trading interface is flexible and intuitive, it’s not the best for novice traders. Traders can deposit and withdraw using a wide range of options such as SEPA, SWIFT, money wire, and domestic payment methods. Kraken Exchange boasts of high liquidity, industry-leading security measures as well as 24/7 live customer support.
Founded in 2012, Bitfinex is the longest-running and most liquid major cryptocurrency exchange. The exchange supports the trading of derivatives contracts enabling traders to speculate on the price of an asset.
The major supported perpetual contract on the platform is Bitcoin/Tether Perpetual Contract (BTCF: USTF). In addition to derivatives, Bitfinex allows margin trading of up to 5x leverage and offers traders access to a peer-to-peer lending market.
Crypto derivatives allow traders to predict the future prices of assets without purchasing the underlying asset itself today. This means that the trader does not have to spend as much to gain exposure to the market.
The growing interest in crypto derivatives has seen the growth of crypto exchanges supporting derivative trading. The exchanges highlighted in this review are excellent if you’re looking for an ideal platform to trade crypto derivatives, including futures, swaps, forwards, options, and perpetual contracts.
Furthermore, the platform charges low trading fees and is very secure. Trading crypto futures is very profitable, especially if you’ve got the right skills.