Deribit Review 2020
Established in 2016, Deribit is an online platform that specializes in futures and options on Bitcoin. In fact, the name of the platform “Deribit” is derived from the words “Deri for Derivatives” and “Bit for Bitcoin”. Founded by its CEO John Jansen, Deribit is based in the Netherlands. Its office is located at Stationsstraat 2b, 3851 Ermelo, Netherlands. The platform product offerings are open to traders from all over the world. They offer leverage as high as 1:20 with tight spreads.
- Trading Futures
- Trading Options
- Deposit and Withdrawal Options
- Fees and Charges
- Privacy and Security
- Customer Support
- Pros and Cons
The platform offered by Deribit is available to trade both the futures and options markets. A web-based platform, it is geared towards more experienced traders rather than beginner traders.
Futures contracts are priced at $10 with the default leverage being 1:10. However, Deribit does offer leverage as high as 1:20. As for the mid-market price, it is an index called the Deribit index and is derived from the average prices from 5 major exchanges. The expiration price also uses the average of the Deribit index but is derived from the prices indicated for every 6 seconds starting from 30 minutes prior to the trading day settlement.
Placing a market order is simply done when you outbid the order book. Note that if you want to minimize the fee, you should select “post only” so the order does not get matched instantly. Once placed, the order will then move to open orders or positions. You can still edit or cancel the order under the open order tab. However, it should be noted that the platform does not allow you to trade protections such as stop loss or take profit. You also cannot close your position under the open order tab. To set your stop loss, take profit level or close your position, you have to do it from the trade slip.
In terms of the Bitcoin options, the market for the Bitcoin option is relatively small. This is to be expected as the market for the option is still considered new. Regardless, Deribit is one of the few platforms around the world that offers Bitcoin options. While the trading accounts are initially set up with a margin requirement of 10%, you are required to maintain a 3% margin on your position. Once your margin falls below the maintenance margin, your positions will be automatically liquidated until the margin balance surpasses the maintenance margin.
Deposit and Withdrawal Options
In terms of deposit and withdrawals options, you can only transfer BTC to and from your account. To deposit your BTC, simply log in to your account and get the deposit address. There is also a QR code which you can scan to obtain the address. To avoid any errors, it is recommended that you deposit a minimum of 0.001 BTC.
To withdraw, the process is similar to making a deposit. Log in to your account and choose Withdrawal to be redirected to the withdrawal page. Next, provide the address of the wallet that you want to withdraw to. After you entered the amount to be withdrawn, the fee will be automatically calculated. Take note that the amount of the fee will depend on the priority level that you have selected.
Fees and Charges
On top of the futures contract price of $10 per contract, there is a Maker fee of 0.02% and Taker fee of 0.05%. For options trading, the underlying fee is 0.04% per option contract for both makers and takers.
Other applicable fees included the following:
- 0.025% Futures
- 0.02% Options
- For options, the fee is never more than 20% of the option’s value.
- 0.15% for futures trades (0.1% will go to the insurance fund)
- 0.1% of the underlying option contract
Privacy and Security
While most Bitcoin platforms require their users to be registered and verified before they can commerce transactions on their platforms, Deribit does not have any such requirements. Users of the platform merely have to register to open their account and they can immediately transfer BTC to their account and start trading. The reason why Deribit doesn’t require any verification is that their platform deals solely in Bitcoin. As for the security of the Deribit platform, it is stated that 90% of the Bitcoins are kept in cold storage.
As for the customer support at Deribit, there is a highly comprehensive FAQ’s section of the site which you can access from inside the trading platform. Additionally, to get any assistance from the support team, you need to contact them by email or through live chat.
Pros and Cons
- Can trade in futures as well as options
- Hassle free account creation process
- Have fund insurance protection
- Reasonable fees
- Does not support altcoins
- Not Beginner friendly
How do I open an account with Deribit?
To open an account with Deribit, you merely need to register and provide an email address for the account.
Do I have to verify my account?
No. You are not required to verify your account.
What are the trading fees like?
For futures, the taker fee is 0.05% and there is a rebate for makers of 0.02% in the futures. Options fee is 0.04% fee
Where is Deribit based?
Deribit is based in the Netherland and its office is located at located at Stationsstraat 2b, 3851 Ermelo, Netherlands.
The beauty of the Deribit exchange is the fact that it allows you to trade in Bitcoin derivatives rather than the physical asset itself. This opens up a whole new world of opportunities for those who are interested in speculating with Bitcoin. Nevertheless, the whole idea of trading Bitcoin derivatives is still new and hence it accounts for the small volume traded. But if Bitcoin derivatives trading were to take off, then we can expect Deribit to be leading the pack.
- 5Great exchange, very reliableJason
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