Deribit – A derivative Cryptocurrency exchange

Introducing Deribit Cryptocurrency Exchange:

Deribit is a cryptocurrency derivatives exchange allowing traders to trade Bitcoin and Ethereum Options, Perpetual and futures. Deribit keeps its customers’ deposits in their cold storage with most of the funds stored in vaults with multiple banks safes. Though at this point in time, Deribit only accepts Bitcoin and no fiat currency as funds to deposit. 

 

Deribit Futures:

Futures on Deribit receive a cash settlement instead of physical Bitcoin, that means the buyer of the futures do not buy the actual Bitcoin and the seller won’t sell the actual BTC and what will be transferred is the transfer of profits and losses at the agreed settlement price of the contract on the expiration price. 

The minimum tick size to trade futures is 0.50 USD and all daily settlements happen at the coordinated universal time (UTC) 8 am. The expiration time is also at UTC 8 am at the end of each month. The size for the contracts at Deribit future exchange is 10 USD with initial margin starting at 1.0% with a linear increment of 0.5% per 100 BTC. The delivery price is the Time Weighted Average of Deribit BTC index measured in the half an hour before the UTC 8 am (7:30 am).

 

Deribit Perpetual

At Deribit exchange, Perpetual is a derivative very similar to Futures but with no fixed maturity and no exercise limit. The perpetual derivatives are to keep their price close to their underlying cryptocurrency price, which at Deribit exchange is referred to as “Deribit BTC Index”.

The Deribit Perpetual contract is 1 USD per Index Point with a contract size of 10 USD. The minimum tick size 0.50 USD and settlements are done at UTC 8 am. The contract size for trading Prepetuals in Deribit is 10 USD. As mentioned earlier there is no delivery/expiration when trading Prepetuals on Deribit. 

 

Deribit Options:

Options on Deribit are traded with what so-called the “European style”. This indicates that options cannot be exercised before expiration, but can only be exercised at expiration. Which this happens automatically on Deribit.  Options on Deribit are priced in Bitcoin and Ethereum and also viewable on USD.

BTC option deribit

Deribit Index:

There are 8 exchanges and the highest and lowest prices are taken out, and the remaining 6 are each at 16.67% accountable for creating an index in Deribit. 

Deribit Crypto Index

 

Market Making on Deribit:

Deribit does not include an in-house trading desk, therefore all active market makers are the third party Market Makers. The liquidity is provided by these parties and Deribit sees these services as a crucial point to their business. Based on the volume, designated market makers receive tailored agreement on fees.