3 things every crypto trader should know about derivatives exchanges | eBitcoinics.com

BTC/USD $ 26712.9

|

ETH/USD $ 1796.60

|

LTC/USD $ 92.39

|

DASH/USD $ 44.41

|

DOGE/USD $ 0.07324

|

|

ADA/USD $ 0.3676

|

USDT/USD $ 1.00

|

SHIB/USD $ 0.00000866

|

HOLO/USD $ 0.003566

|

BTT/USD $ 0.00000060

|

WINK/USD $ 0.0001995

|

YFI/USD $ 6739.04

|

PAXG/USD $ 1995.93

|

MKR/USD $ 630.44

|

BCH/USD $ 117.30

|

WBTC/USD $ 26739.6

|

COMP/USD $ 35.00

|

AAVE/USD $ 62.48

|

ZEC/USD $ 33.10

|

|

TRB/USD $ 11.87

|

ETC/USD $ 18.36

|

NMR/USD $ 13.50

|

|

LINK/USD $ 6.62

|

|

|

ATOM/USD $ 10.78

|

|

|

SUSHI/USD $ 0.8944

|

BAND/USD $ 1.47

|

EOS/USD $ 0.8928

|

OMG/USD $ 0.8033

|

|

MIR/USD $ 0.05600

|

BNT/USD $ 0.4149

|

XTZ/USD $ 0.8899

|

CGLD/USD $ 1.74

|

1INCH/USD $ 0.4109

|

CRV/USD $ 0.8177

|

KNC/USD $ 0.6039

|

ENJ/USD $ 0.3523

|

MATIC/USD $ 0.8601

|

STORJ/USD $ 0.3080

|

ZRX/USD $ 0.2240

|

ALGO/USD $ 0.1679

|

GRT/USD $ 0.1221

|

OGN/USD $ 0.09479

|

CTSI/USD $ 0.1985

|

MANA/USD $ 0.5062

|

BAT/USD $ 0.2212

|

|

USDC/USD $ 0.9998

|

REN/USD $ 0.07770

|

XLM/USD $ 0.08778

|

NKN/USD $ 0.09859

|

OXT/USD $ 0.06790

|

LRC/USD $ 0.2967

|

SKL/USD $ 0.03220

|

CVC/USD $ 0.08861

|

SAND/USD $ 0.5290

|

NU/USD $ 0.1500

|

GNT/USD $ 0.00000001

|

DNT/USD $ 0.02720

|

ANKR/USD $ 0.02588

|

LOOM/USD $ 0.05156

|

AMP/USD $ 0.002960

|

MANY/USD $ 0.3509

|

WTK/USD $ 0.02170

|

POSI/USD $ 0.02355

|

WINR/USD $ 0.00003100

|

DEFT/USD $ 0.00002080

|

ISA/USD $ 0.0001070

|

RULER/USD $ 0.006669

|

SPORE/USD $ 0.9137

|

DEFLCT/USD $ 0.7343

|

HVE/USD $ 0.0004395

|

JCB/USD $ 0.00004900

|

FWC/USD $ 0.00000000008000

|

FDC/USD $ 0.00000021

|

YETI/USD $ 0.003856

|

SMR/USD $ 0.06492

|

BTC/USD $ 26712.9

ETH/USD $ 1796.60

LTC/USD $ 92.39

DASH/USD $ 44.41

DOGE/USD $ 0.07324

ADA/USD $ 0.3676

USDT/USD $ 1.00

SHIB/USD $ 0.00000866

HOLO/USD $ 0.003566

BTT/USD $ 0.00000060

WINK/USD $ 0.0001995

YFI/USD $ 6739.04

PAXG/USD $ 1995.93

MKR/USD $ 630.44

BCH/USD $ 117.30

WBTC/USD $ 26739.6

COMP/USD $ 35.00

AAVE/USD $ 62.48

ZEC/USD $ 33.10

TRB/USD $ 11.87

ETC/USD $ 18.36

NMR/USD $ 13.50

LINK/USD $ 6.62

ATOM/USD $ 10.78

SUSHI/USD $ 0.8944

BAND/USD $ 1.47

EOS/USD $ 0.8928

OMG/USD $ 0.8033

MIR/USD $ 0.05600

BNT/USD $ 0.4149

XTZ/USD $ 0.8899

CGLD/USD $ 1.74

1INCH/USD $ 0.4109

CRV/USD $ 0.8177

KNC/USD $ 0.6039

ENJ/USD $ 0.3523

MATIC/USD $ 0.8601

STORJ/USD $ 0.3080

ZRX/USD $ 0.2240

ALGO/USD $ 0.1679

GRT/USD $ 0.1221

OGN/USD $ 0.09479

CTSI/USD $ 0.1985

MANA/USD $ 0.5062

BAT/USD $ 0.2212

USDC/USD $ 0.9998

REN/USD $ 0.07770

XLM/USD $ 0.08778

NKN/USD $ 0.09859

OXT/USD $ 0.06790

LRC/USD $ 0.2967

SKL/USD $ 0.03220

CVC/USD $ 0.08861

SAND/USD $ 0.5290

NU/USD $ 0.1500

GNT/USD $ 0.00000001

DNT/USD $ 0.02720

ANKR/USD $ 0.02588

LOOM/USD $ 0.05156

AMP/USD $ 0.002960

MANY/USD $ 0.3509

WTK/USD $ 0.02170

POSI/USD $ 0.02355

WINR/USD $ 0.00003100

DEFT/USD $ 0.00002080

ISA/USD $ 0.0001070

RULER/USD $ 0.006669

SPORE/USD $ 0.9137

DEFLCT/USD $ 0.7343

HVE/USD $ 0.0004395

JCB/USD $ 0.00004900

FWC/USD $ 0.00000000008000

FDC/USD $ 0.00000021

YETI/USD $ 0.003856

SMR/USD $ 0.06492

3 things every crypto trader should know about derivatives exchanges

Marcel Pechman 26 Apr, 2021 https://cointelegraph.com/news/3-things-every-crypto-trader-should-know-about-derivatives-exchanges Views: 453

Understanding open interest, funding rates and the differences between futures contracts is the starting point for any investor interested in trading crypto-based derivatives.

In the past two years futures contracts have become widely popular among cryptocurrency traders and this became more evident as the total open interest on derivatives more than doubled in three months.

Additional proof of their popularity came as futures turnover surpassed gold, which is a well-established market with $107 billion in daily volume.

However, each exchange has its own orderbook, index calculation, leverage limits and rules for cross and isolated margin. These differences might seem superficial at first, but they can make a huge difference depending a traders' needs.

Open interest

Aggregate futures open interest (blue) and daily volume (black). Source: Bybt

As shown in the above, the total aggregate futures open interest rose from $19 billion to the current $41 billion in three months. Meanwhile, the daily traded volume has surpassed $120 billion, higher than gold's $107 billion.

While Binance futures hold the larger share of this market, a number of competitors have relevant volumes and open interest, including FTX, Bybit, and OKEx. Some differences between exchanges are obvious, such as FTX charging perpetual contracts (inverse swaps) every hour instead of the usual 8-hour window.

BTC and ETH futures open interest, USD. Source: Bybt

Take notice of how CME holds the third position in Bitcoin (BTC) futures, despite offering exclusively monthly contracts. The traditional CME derivatives markets also stand out for requiring a 60% margin deposit, although brokers might provide leverage for specific clients.

Stablecoin versus token-margined contracts

As for the crypto exchanges, most will allow up to 100x leverage. Tether (USDT) orders are usually denominated in BTC terms. Meanwhile, the inverse perpetual (token margined) order books are displayed in contracts, which might be worth $1 or $100 depending on the exchange.

BTC perpetual USDT futures order entry. Source: Bybit

The above picture shows that Bybit USDT futures order entry requires a BTC-denominated quantity and the same procedure takes place at Binance. On the other hand, OKEx and FTX offer users an easier option which allows the client to enter a USDT quantity, while automatically converting to BTC terms.

BTC perpetual USDT futures order entry. Source: OKEx

In addition to USDT-based contracts, OKEx offers a USDK pair. Similarly, Binance perpetual futures also offers a Binance USD (BUSD) book. Therefore, for those unwilling to use Tether as collateral, there are other options available.

Variable funding rates

Some exchanges allow clients to use very high leverage and while this might not pose an overall risk as liquidation engines and insurance funds are in place for these situations, it will pressure the funding rate. Thus, longs are usually penalized on those exchanges.

ETH futures 8-hour funding rate. Source: Bybt

The above chart shows that Bybit and Binance usually display a higher funding rate, while OKEx constantly presents the lowest. Traders need to understand that there are no rules enforcing this, and the rate may vary between assets or momentarily leverage demand.

Even a 0.05% difference equals 1% in additional costs per week, meaning, it is essential to compare the funding rate every once in a while, especially during bull markets when the fee tends to escalate quickly.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Share with :

All Comments (0)

No comment yet

Please login to leave a comment. Click here to Login.

Quick Links

Use Our System

Our Blockchain Services

About Us

Get In Touch

Airport Roundabout, Manhyia Road - Dichemso, Kumasi, Ashanti Region, Ghana W/A
Digital Address - AK-022-4332

+233 550 697 850

help@eBitcoinics.com

Copyright All Right Reserved - 2022

Terms Of Service | Privacy Policy | About Us

Designed & Developed by solutionsnics.com