Deribit Coupon – Discount Code
In addition to classic exchanges, which specialise either in spot market trading or trading in old coins, there is a third category. Here, everything revolves around trading in so-called derivatives. Derivatives are highly speculative financial instruments that are much more complex than traditional investment products. In general, the price of a derivative is derived from an underlying product. Such a basic product can be a share or a bond, for example. In the area of crypto currencies, the underlying product is usually the Bitcoin and the respective derivatives can be used to speculate on its price development. An advantage of derivatives is often that one does not have to buy the underlying product in order to participate in its price development.
Because derivatives usually follow this price development disproportionately, they are suitable for two purposes. The first is to hedge investments that have already been made. If, for example, you hold Bitcoin and expect a fall in prices, you could hedge your investment by speculating on the falling price of Bitcoin with a much smaller portion of your assets. The second possibility is simply to speculate in order to make a profit. Since derivatives make it possible to achieve relatively high profits even with a small investment, they seem attractive to many investors for this reason. However, the risk – regardless of the purpose for which derivatives are traded – is also extremely high. Depending on the product, there is a risk of a total loss of deposits or even an obligation to make additional contributions, so in such a case the losses incurred through trading must be offset. This also applies if the amount of the loss exceeds the amount of the deposit. However, an obligation to make additional contributions is not provided for in the case of most products offered in the crypto currency area.
There are different types of derivatives, not all of them are offered by different providers specializing in crypto currencies. The three most common are perpetual swaps, futures and options. It should be noted that the products offered are not standardised. This means, for example, that the perpetual swap from supplier “A” is not offered at the same conditions as the product of the same name from supplier “B”.
The largest supplier of such products in Europe is the Dutch company Deribit. The name derives appropriately from the terms “Derivatives” and “Bitcoin”. Three different derivatives can be traded. These are perpetual swaps, futures and options. The underlying product is the “Deribit BTC Index” and its price development. This index is made up of spot market prices and is oriented towards large exchanges, including Kraken, for example. The index thus derives the price for the Bitcoin. Although derivatives to other crypto currencies are also planned for the future, they are not currently available. A special feature compared to traditional providers of derivatives is that all contracts are calculated in US dollars, but are always settled in Bitcoin. This is because deposits and withdrawals in euros or US dollars are not provided for with Deribit.
Futures and perpetual swaps function very similarly in principle, one of the most important differences between the two products being the expiry date. While the futures have a fixed date at which the contract is terminated at the latest, perpetual swaps have an unlimited term. Both products can be traded with 100-fold leverage. This means, for example, that if a Bitcoin deposit of $100 is made, up to $10000 will be available to open positions. The higher the effective leverage used, the higher the risk of losing all your deposits. At the same time, however, the amount of potential gains also rises. For both products it is possible to speculate on the rise or fall of the price. If you are right with your assessment, then the price difference forms the profit margin. If the speculation does not work out, the price difference forms the loss. A detailed explanation of the functioning of perpetual swaps and futures on deribit can be found in the official documentation of the exchange. Among them also some example calculations.
Trading with options
The market for options is relatively young and small, at least in the area of crypto currencies. Deribit can certainly be described as a pioneer in this segment. Options have a completely different function compared to futures and perpetual swaps. Although options are also based on falling or rising prices, the contractual conditions are completely different. With an option on Deribit you acquire the right to buy or sell a certain amount of Bitcoin at a certain price at a certain time. It should be noted that the option can only be exercised at the end of the agreed term and not during the entire term. In addition, the option is automatically exercised at the end of the term. Therefore, gains and losses from trading the option are automatically booked at the end of its term. Example calculations and a comprehensive description of the exact conditions can be found in the official documentation on the options.
The structure of the trading interface is very clear, whereby beginners with most control elements might be overstrained first of all. With the help of the documentation and the community chat you can get help quickly. In addition all elements can also be adapted, so that one can move the data into the foreground, which one considers particularly interesting. Professional charts are also included, which provide all necessary tools for the technical analysis of the market. Another positive aspect is the significantly higher number of different order types and conditions. This is remarkable because exchanges for crypto currencies usually only offer a very spartan range of order types. Since Deribit trades futures and swaps with high leverage, a larger selection is urgently required. After all, traders want to be able to influence their risks and opportunities in their favour via the various subtleties of the orders. In this area, however, all types of Trailing orders are still missing. Since the competition has not implemented these either, this is not an exclusive minus point, but still has room for improvement.
Server and infrastructure
Deribit’s infrastructure is convincing, with the exception of maintenance, the markets are open 24/7 throughout the year. The servers can handle an extremely high number of orders and accesses at the same time. A special feature is the co-location of the servers, which is located in France. Professional traders can reduce the latency for access to the matching engine to 0.1 milliseconds if they rent a server there from the same provider. The test servers are also available to all users. Updates are implemented there first and can be tested before they are mature and implemented on the Exchange.
In addition to the use in the web browser, own apps for iOS and Android are available. Traders can therefore always access their accounts and are not tied to the use of a PC. If the browser is not enough for you, you can use different programs to trade on Deribit. Among the multitude of tools is also the very popular trading platform NinjaTrader. There is also the possibility to realize automated trading via bots. Here the market offers a wealth of paid offers, but also open source projects are active in this area. Those who can and want to program themselves will find a comprehensive documentation of the API.
When it comes to safety, Deribit meets the standards commonly used on the market. Users can additionally protect their accounts and deposits via Google-2FA. According to the company, only 1% of all Bitcoin deposits are located in a hotwallet. The rest is stored in a cold storage facility, which is kept under lock and key in a bank. This is to ensure that the majority of deposits are protected against theft, while users do not experience any restrictions and have access to their deposits at all times. According to Deribit, a good 98% of all withdrawals from the hotwallet can generally be handled. So it seems to be a good compromise between security and user-friendliness. Remarkable is the waiver of a KYC taking place in advance. Users do not have to identify themselves in advance in order to be able to trade on Deribit. However, it should be noted that customers from the USA and the Netherlands are excluded from using Deribit. If one travels or uses a VPN abroad it could come to problems if necessary.
Deribit’s own telegram channel is the fastest interface between Deribit employees and users. At the same time, this chat offers the opportunity to exchange ideas with like-minded people or to ask for tips. If you have a serious problem, you can write an e-mail to the support to open a ticket. Also very helpful are the videos about the different products and the trade on Deribit. Since each derivative is designed individually and comparatively complex, one can acquire the necessary knowledge together with the very comprehensive documentation.