8 Best Derivatives exchanges for Crypto:
1. Binance
Binance is the #1 exchange for spot trading, rolled out margin, and derivatives trading in the past few quarters. It has the most extensive customer base and trading volume in the global crypto markets.
Derivatives products on Binance are categorized as follows:
- USD-Margined Futures Contracts
These are perpetual as well as delivery contracts which are settled in USDT and BUSD.
- Coin-Margined Futures Contracts
These are perpetual and delivery contracts that are settled in cryptocurrency such as BTC, ETH, etc.
- Binance Leveraged Tokens
Leveraged tokens allow a user to have increased exposure to a particular crypto asset.
- Binance Options
These are European-style vanilla options that can be used either to maximize profits or to limit losses.
Binance has a very reasonable fee for derivatives trading. There is no fee for the deposit of funds on Binance. The trading fee is variable and varies from 0.01% to 0.05% of the transaction value. Further, a user can reduce this fee by holding the in-house token of Binance, i.e., BNB.
The exchange is pretty secure and also has an option of two-factor authentication for users. And customer support is also excellent.
The only downside is that the platform isn’t available for US traders. But you can still trade if you use a VPN.
Read Binance review
2. Bybit
Bybit is a specialized platform that is dedicated to derivatives markets only. It has been in the market since 2018.
Derivatives products on Bybit are categorized as follows:
- USD Margined Perpetual
These are perpetual contracts that are settled in USDT
- Coin Margined Inverse Perpetual
These are perpetual contracts that are settled in cryptocurrency such as BTC, ETH, etc.
- Coin Margined Inverse Futures
These are delivery contracts that are settled in cryptocurrency, such as BTC, ETH, etc.
Bybit hasn’t been in the crypto market for long. What makes it a good platform is that its primary purpose is to cater for crypto derivatives trading.
The trading fee structure of Bybit is pocket-friendly. It charges 0.075% of the transaction from the market taker but rewards 0.025% of the trade to the market maker.
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 essential 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
Newcomers on Bybit get a bonus of $90.
3. FTX
FTX is a robust addition to the crypto markets and was established in May 2019.
The exchange has a wide 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 two 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 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.
A few of the prediction contracts available are as follows:
- Trump 2024 – TRUMP-2024 is a futures contract on FTX. It expires at $1 if Donald Trump wins the 2024 US presidential general election and $0 otherwise.
- Superbowl Futures – Bolsonaro2022 is a futures contract that expires at $1 if Jair Bolsonaro wins the 2022 Brazilian presidential election and $0 otherwise.
- Options
All the options are priced on Black-Scholes Model. A user can buy a call or put open to hedge their market portfolio to substantial market deviations
Why are futures contracts listed on FTX 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 that jumps in to provide to accounts in danger of bankruptcy, helping avoid clawbacks.
FTX futures have careful and measured margin calls to avoid significant 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 with 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 understand how derivatives are traditionally designed and what kind of derivatives are in demand.
4. Bitmex
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. It is another specialized derivatives exchange.
Derivatives products on Bitmex are categorized as follows:
- Perpetual Contracts
These are perpetual contracts that are settled in Bitcoin.
- Futures Contracts
These are futures contracts that are settled in Bitcoin.
Further, Bitmex also offers a margin of up to 100x on these contracts. Bitmex offers derivatives products on various tokens such as BTC, ADA, BNB, DOT, DOGE, EOS, ETH, etc.
The point worth noting is that all these contracts are settled in BTC. Thus, withdrawals, deposits, and transaction fees are all done in BTC.
In total, the platform offers 17 perpetual and 84 futures contracts.
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
Some additional features of Bitmex are as follows:
- There is a 24/7 customer support
- For safekeeping, Bitmex stores some of your crypto on a cold storage
- The platform has a feature of two-factor authentication to prevent malicious parties from accessing your account
- Bitmex supported languages are English, Japanese, Chinese, Korean, and Russian.
5. Gate.io
Gate.io is an excellent crypto exchange that has gained popularity because of its unique product offerings. It stands tall in the list of best crypto exchanges, and its derivative products are also not short of anything.
The various derivatives products offered by Gate.io are categorized as follows:
- Perpetual Contracts
These are perpetual derivative contracts that are settled either in USDT or in BTC.
- Futures Contracts
These are delivery contracts that have a fixed expiry date.
- Warrants
These are options that can be used either to maximize profits or to limit losses.
The trading fee on Gate.io is as follows:
| Type of Contracts | Maker fee | Taker fee |
|---|---|---|
| Perpetual Contracts | -0.025% (Rebate) | 0.075% |
| Futures Contracts | NIL | 0.04% |
| Options | 0.02% | 0.05% |
In addition to the above, Gate.io charges a settlement commission of 0.015% on Futures contracts. The platform offers 149 perpetual contracts and various futures contracts.
Read Gate review
6. Huobi Global
Huobi Global is one of the leading crypto exchanges that have huge liquidity. In addition to this, the exchange is good on all security parameters. In addition to essential services such as spot and margin trading, Huobi has a substantial trading volume in the derivatives market.
Huobi offers 168 perpetual contracts and 56 futures contracts.
The derivatives products offered by Huobi can be categorized as follows:
- Futures
These are delivery contracts that are settled on a specific date.
- Coin Margined Swaps
These are perpetual contracts that are settled in cryptocurrency, such as ETH, BTC, etc.
- USDT Margined Swaps
These are perpetual contracts that are settled in USDT.
- Options
These are options that can be used either to maximize profits or to limit losses.
The trading fee charged by Huobi for derivatives trading is as follows:
| Type of Contracts | Maker fee | Taker fee |
|---|---|---|
| USDT Margined Swaps | 0.02% | 0.04% |
| Coin Margined Swaps | 0.02% | 0.05% |
| Futures Contracts | 0.02% | 0.04% |
| Options | Variable | Variable |
7. OKEx
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 one of the top exchanges for derivatives trading, according to CoinGecko.
Derivatives products on OKEx are categorized as follows:
- Perpetual Contracts
These are perpetual contracts that can either be USD-margined or Coin Margined. This means that they can either be settled in USD or cryptocurrency.
- Futures Contracts
These are futures contracts that can either be USD-margined or Coin Margined. This means that they can either be settled in USD or cryptocurrency.
- Options
These are European-style vanilla options that can be used either to maximize profits or to limit losses.
OKEx exchange offers 139 perpetual and 1336 futures contracts. This huge variety of derivative products makes OKEx viable for traders who want to trade in Altcoin derivative products. Further, OKEx is one of the most liquid exchanges for derivatives trading.
There is also a beginner knowledge quiz for newcomers going into futures and perpetual 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.
The base trading fee on OKEx is as follows:
| Type of Contracts | Maker fee | Taker fee |
|---|---|---|
| Perpetual Contracts | 0.02% | 0.05% |
| Futures Contracts | 0.02% | 0.05% |
| Options | 0.02% | 0.05% |
This fee can be reduced once a user attains VIP status.
Another cool part about OKEx is that it allows its Customer to pair derivatives trade with fiat currencies. This allows you to make a 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.
8. MEXC Global
MEXC Global is an exchange that brings a number of low cap gems at their incubation stage. The exchange was established in 2018 in Seychelles, East Africa. The exchange has its presence in more than 200 countries and has served more than 6 million users.
The exchange supports 11 different languages. In derivatives markets, MEXC Global only deals with perpetual contracts. Users are also provided margin on these contracts up to 125x.
The exchange offers both USDT margined as well as Coin margined contracts. The trading fee for perpetual contracts on MEXC Global is 0.02% for makers and 0.06% for takers.
The exchange has a pretty decent user interface, and it also has a mobile application for iOS and Android versions.
