In this crypto trading guide article we compare the best cryptocurrency derivatives trading platforms.
We will compare different derivative trading instruments and what fees are associated with those.
We will look into some om the top Bitcoin trading sites:
With the current cryptocurrency market hitting investors left and right, the talk about how cryptocurrency derivative trading could help pull the prices out of the slump is louder than ever.
What are crypto derivatives?
Cryptocurrency derivatives a category of crypto trading instruments.
contracts between two entities which don’t have value but
are valued according to the underlying asset. The most common derivative in the cryptocurrency market is Bitcoin (BTC) futures contract.
What Bitcoin futures contract does is that it obliges a trader to acquire BTC at the predetermined price and time, providing a form of a shield from the high volatility cryptocurrencies are known for.
Despite the mentioned claims that the derivatives market could revitalize the bear market, not all cryptocurrency trading sites offer derivatives trading services to their customers. Therefore, we are going to dissect some of the most used and compare their general characteristics, security, features, support, and reputation (not necessarily in that order).
Trading Cryptocurrency Derivatives with Binance
Binance offer derivatives cryptocurrency trading in a few different products. The main categories can be seen in the screenshot below which is taken from header menu called derivatives on the Binance trading platform. In the menu, you can see
- USDT Futures
- Coin Futures
- Leveraged Tokens
USDT futures on Binance are traded with no expiration date and with a leverage up to 125x.
COIN futures are traded as token margin and comes with both expiration date and without expiration date. The leverage is up to 125x.
Binance leveraged tokens are traded with a leverage up to 3x and with no risk for liquidation.
BitMEX the largest crypto derivatives trading platform
Despite the fact that BitMEX was already mentioned in our article about cryptocurrency margin trading, the exchange is a professional trader’s tool and therefore, we had to include this extraordinary cryptocurrency derivative trading platform in this comparison.
Deposits to BitMEX are feeless and are
possible only in cryptocurrencies, while withdrawals are only processed once
per day, and will be charged between 0.001 BTC and 0.05 BTC, depending on the priority of the transaction.
has a few more derivative trading options than Deribit, which can also be traded
- Futures, available for Bitcoin (BTC), Bitcoin
Cash (BCH), Cardano (ADA), EOS, Ethereum (ETH), Litecoin (LTC), Ripple (XRP),
and Tron (TRX), with fees varying in accordance with the asset (see the
- Perpetual Contracts, with 0.0250% rebate for
makers to 0.0750% for the market takers, and long funding fee of 0.0100%, while
the short funding is rebated with 0.0100%, every eight hours.
- Upside Profit Contracts, which carry no fees
if traded without leverage.
- Downside Profit Contracts, to which the same
rule as for their upside counterparts applies.
technical security, BitMEX is offering a very similar set of features as
Deribit, while its current insurance safety net of 21 BTC is, compared to
Deribit’s, a bit lower for bankrupting positions.
less experienced in cryptocurrency trading may, however, find BitMEX to be on
the user-unfriendly side, as its interface is developed for advanced users, and
as such, has a wide variety of complex features.
The company was founded in Hong Kong back in 2014. Read more about BitMEX in our BitMEX review.
Bitfinex cryptocurrency derivatives trading platform
Bitfinex is a great platform for cryptocurrency derivatives trading. In the screenshot below you can see how you navigate to the derivatives trading products on Bitfinex. You can see the derivatives are markes in the header menu and in the left sidebar you can see all available perpetual swaps.
On the right side of Derivatives you can see a tab called funding. This is for margin funding, or margin lending, which simply means that you can earn interest on your holdings on Bitfinex by lending them via their peer to peer system. We have an article about how to make bitcoin passive income with Bitfinex lending.
Kraken cryptocurrency derivatives trading platform
Kraken is one of the most trusted crypto trading platforms and recently they bought Crypto Facilities to incorporate futures trading into the Kraken family.
As you can see in the screenshot below Kraken futures is still separated from Kraken spot trading.
With Kraken you can trade derivatives with up to 50x leverage and you can transfer between Kraken spot and Kraken futures seamlessly. Read more about Kraken in our Kraken review.
What is the best cryptocurrency derivatives trading platform?
Trading cryptocurrency derivatives isn’t for everybody. One has to be familiar with the concept and risks of futures, options and other contracts, especially if they are combined with a margin option.
Still, each of these platforms offers some
features that some traders may or may not like.
BitMEX is meant to be used
by advanced traders who know how to fully exploit all the trading options andhave previous experience by derivative trading and leverage trading.
Sometimes, many features tend to confuse
newcomers, and the simplicity of Kraken and Binance may just be the thing that an
aspiring trader needs to get on his feet.
In the end, it is up to each individual to find the one trading site that suits his needs, and since none of us has the same preferences, he has to experience the interface and features on his own. He has to explore.
Until the next time, trade responsibly.