Our Take On Deribit
THE BOTTOM LINE:
As far as derivatives-only exchanges go, Deribit is a great choice. Deribit’s focus on options and futures means those markets enjoy deep liquidity, and traders can be sure they get the best derivatives trading experience possible.
- Desktop, mobile, or API-based trading
- Insurance fund to cover leverage shortfall events
- Deep liqiuidity for supported derivatives
- No volume discounts on fees
- Limited supported assets for futures and options
- Not available in the US
In this guide, we look at the Deribit trading platform, its features and benefits, and compare Deribit to some other exchanges out there.
Deribit At A Glance
|Main Supported Assets||Instruments Offered||Available in the US?||Trading Fee Range||Daily Trading Volume|
|BTC, ETH, SOL||Options, Futures, Perpetual Futures||No||-0.02% to 0.05%||~$400 million|
Deribit was co-founded in 2016 by a three-person team consisting of brothers John and Marius Jansen and Sebastian Smyczýnski. The exchange has European roots but is currently based in Panama, which is a more crypto-friendly jurisdiction. John Jansen serves as Deribit’s CEO, while Marius Jansen is COO.
The Deribit exchange supports options, futures, and perpetual futures contracts. Each of these markets can be used to trade profitably, but it’s important to understand them before investing your money.
Options Trading: Crypto options are contracts that allow you to purchase or sell some asset at a future date. Options are separated into calls and puts. Call options allow you to purchase some asset, such as BTC or ETH, at a date in the future for a predetermined price, regardless of what they’re actually trading for on that date. Put options allow you to sell BTC or ETH at a date in the future for a predetermined price. Options do not have to be executed and can expire without being used.
Futures Trading: Futures are similar to options, however, they obligate a buyer and seller to execute a transaction at an expiry date. Futures are contracts to either buy or sell an asset at a specified price in the future. Futures must be exercised, meaning the buyer of the futures contract must buy the underlying asset at the agreed-upon price on the date, and the seller of the futures contract must sell the underlying asset on that date.
Perpetual Futures Trading: Perpetual futures are futures contracts without an expiration date. In effect, these instruments perform similarly to traditional crypto trading (“spot” trading), however, you don’t have to actually take possession of the underlying crypto asset — such as BTC or ETH — you can just trade on the price of it and profit when your price predictions are correct.
The main drawbacks of Deribit are:
- No volume discounts on fees
- Few supported assets
- Not available in the US
What Is Deribit And How Does It Work?
While most popular cryptocurrency exchanges, such as Coinbase, support “spot” markets as their main offerings, Deribit is strictly a derivatives exchange.
This refers to the most basic form of cryptocurrency trading. This is normally the type of trade you execute when purchasing or selling a cryptocurrency. A spot trade consists of submitting a buy or sell order to an exchange and taking custody of the cryptocurrency when you buy, and losing custody of the cryptocurrency when you sell. Spot trades are usually finalized when they are executed (on the “spot”).
This is a more complicated type of trade that gives you the opportunity to buy or sell an asset (such as BTC, ETH, or SOL) at some point in the future. Derivatives contracts “derive” their value from the underlying asset, but they are a separate transaction that does not represent the actual asset itself being traded.
Derivatives can be “exercised”, or used, at a point in the future that is different from when the derivative contract was purchased. This means derivatives have an expiration date and their value depends on how the markets are expected to move in the future. Derivatives are generally used to lock in the price of a cryptocurrency in advance and either buy it or sell it for that price on the expiration date, regardless of what the market is actually trading at on that date.
Deribit is a centralized (CeFi) exchange, which means that it stores client funds in platform-custodied crypto wallets and it manages all of its markets directly. Other popular exchanges, such as Coinbase, are also centralized exchanges.
This is as opposed to decentralized (DeFi) exchanges which simply connect two trading parties (buyers and sellers) together via smart contracts and do not custody assets or provide liquidity. Examples of decentralized exchanges are Uniswap and Sushiswap.
The Deribit platform is a great choice for intermediate and advanced traders who are comfortable speculating on future price moves and maintaining the necessary margin to cover their derivatives contracts. These trades can be very profitable, but they are also risky and can quickly wipe out inexperienced traders.
Deribit Benefits And Features
Advanced Order Trade
As with any exchange that supports futures and options trading, Deribit provides some complex trading instruments. These include:
- Market Order: Your trade will be executed as quickly as possible by being “filled” (completing) for the current market price of the asset you are trading. This type of trade prioritizes speed over getting the best possible price.
- Limit Order: You enter a pre-set limit amount that your trade has to be executed for, thus ensuring your trade only completes at the price that you set or better. “Buy” orders will only complete if there is a seller selling at or under the limit price, while “sell” orders will only complete if there is a buyer buying at or over the limit price. Limit orders usually take longer to complete than market orders and may sit unfilled in the order book for hours or days.
- Market Limit Order: A blend of market and limit orders. A trade enters the market and starts to be filled at the market price. However, if the market price changes before the order can be fully filled, the rest of the order gets filled as a limit order — filling at or above the limit price if it’s a sell order and at or below the limit price if it’s a buy order.
- Stop Market Order: A “stop” order uses a defined price that the market must hit before the order gets submitted to the order book. Stop orders are only available for buy orders. For example, I can set a stop price of $20,000 for buying a Bitcoin perpetual contract, and the order will only be submitted to the market when the market price hits $20,000. Stop orders work similarly to limit orders. However, the differences are that limit orders are publicly visible while they wait to be filled, while stop orders are not and stop market orders do not run the risk of being left unfilled the way limit orders do. Keep in mind that stop-market orders enter the market at a defined “stop” price. But they actually get filled at whatever price the market is at immediately after the order enters the order book. These two values may be different depending on how the market moves in the split second between the order triggering and it being completed.
- Stop Limit Order: Similar to a stop market order, however, you define both a stop price and a limit price. The stop price determines when the order is triggered and enters the order book, while the limit price determines what price the order actually gets filled for once it’s triggered.
- Take Market Order: Take orders are the inverse of stop orders. While stop orders are only available for buying an asset, take orders are only for selling an asset. A take market order enters the order book when the asset price reaches the take price. The order then gets executed as a market order, so it gets filled immediately for whatever the market price is.
- Take Limit Order: Take limit orders and submit a sell order to the exchange whenever the market price of an asset reaches a certain price. The order then stays on the order book until it can be sold for the limit price or higher.
Advanced order trades also include order attributes that can help you optimize for fees or hide your trades from the order book. Finally, “time in force” attributes determine what happens to transactions that can’t be immediately filled: either staying on the books indefinitely, getting canceled immediately, or getting canceled after 24 hours.
Since Deribit is an exchange focusing on options and futures trading, each account must maintain a minimum set of assets that can cover their obligations to their contracts in the future. This minimum is calculated based on a proprietary risk engine that the platform uses.
Deribit will automatically liquidate account assets if the risk engine determines that your positions do not have enough coverage to be executed according to market conditions.
Market Maker Protection
An important strategy for traders looking to ensure they’re getting the lowest fees possible is to enter the market when their trades can be classified as maker trades. Market maker protection helps to automate this process by allowing traders to set rules on price, time interval, delta values, and other attributes that can help ensure they time their market entry for maximum benefit.
Due to the computational nature of blockchains, transactions normally take anywhere between a few minutes to upwards of an hour to settle. In fast-moving markets with a lot of capital at stake, this inefficiency causes problems for traders.
Off-exchange settlement is a solution to this problem in which parties agree to an exchange using Deribit, but their assets actually trade hands off the exchange. Settlement can be reached in seconds, and intermediaries help reduce counter-party risk and increase asset security when moving funds between wallets.
Block Trade Functionality
Block trades are private transactions between two parties that do not go through the public exchange and use their own liquidity. This feature can be used to complete larger trades (of $100,000 or more) like, OTC trades, directly with another trader that are agreed upon ahead of time. Block trades are available for both options and futures contracts.
Given that the options and futures contracts on Deribit require transactions at some point in the future, the platform requires traders to maintain a level of margin that will ensure these obligations can be fulfilled. The standard practice for determining this margin is to look at every individual asset separately (BTC, ETH, SOL etc.) and keep independent margin figures per asset.
Portfolio margin, on the other hand, combines all your assets into one risk calculation. This means that you have more freedom to arrange your portfolio, and you don’t have to maintain margin requirements on a per-asset basis.
The Deribit position builder can be used to plan and visualize your trades ahead of time. Through its interface, you can enter any option or futures trade and select among a variety of strike prices and expiration dates. The builder will then generate a profit/loss graph which helps you get a visual sense of how your position works when it’s profitable, and how it changes over time.
Deribit provides traders with access to the exchange’s application programming interface (API). This enables technical traders to create programs and scripts that automatically perform actions on the Deribit platform without direct user involvement. The API can be used to execute trades, manage account balances, and display data.
Earning Opportunities And Rewards
As a derivatives trading platform, Deribit will provide the best opportunities to traders looking to make bets on futures and options markets.
Profiting From Options
Options are speculations on the price of crypto at some point in the future. You can speculate that the price of the cryptocurrency will either be higher than its current price or lower.
To profit from an options trade when the future price is higher than the current price, purchase a call option. This allows you to purchase crypto for a lower price at some point in the future and turn around and immediately sell it for a higher price.
To profit from an options trade when the future price is lower than the current price, use a put option. The trade here is to buy crypto from the open market when it’s at a lower price in the future and use your put contract to sell it for a higher price.
Profiting From Futures
Profiting from futures is very similar to profiting from options. The difference between futures and options is that while options give you the choice of not exercising them, futures are required to be exercised. This means that if you buy a futures contract, you are obligated to actually go through with the purchase of an asset at some point in the future, and the same if you sell a futures contract.
Actually, profiting from futures contracts is similar to profiting from options contracts. If you think the price of a crypto may go up in the future, you can buy a futures contract for it, and when the price of the underlying asset goes up, you will profit from the price difference. If you think the price of a crypto will go down, sell a futures contract to profit from the price difference.
Profiting From Perpetual Futures
While traditional futures have an expiration date on which the profit or loss is calculated depending on the price of the underlying asset, perpetual futures are indefinite futures contracts with no expiration date, hence the “perpetual” term.
The strategy for profiting from perpetual futures is very similar to that of profiting from regular crypto trading — buying the contract at a low price and selling it at a high price. The price of a perpetual futures contract is usually very close to, if not the same as, the price of the underlying crypto asset.
Trading the perpetual futures contract rather than the asset itself gives you the advantage of executing the trade without having to worry about taking custody of the cryptocurrency.
No Volume Discounts On Fees
Most crypto exchanges provide fee discounts depending on trading volume. While this may not necessarily be useful to smaller traders, those who trade a lot or use institutional funds to take positions may be disappointed to find that Deribit does not provide fee discounts for large traders. The maker and taker fees of the platform fluctuate only depending on the particular derivatives market and do not take historical trading volume into account.
Few Supported Assets
The crypto world is quickly expanding, and there are hundreds of cryptocurrencies that are now considered “blue chip” tokens. Many of these are supported by the biggest exchanges out there, ensuring that asset selection is not a factor in picking out the best exchange.
This is, unfortunately, not the case with Deribit. The platform currently supports just 13 assets, and the majority of these are only available as perpetual futures contracts. The regular futures and options markets on the exchange are available for just 3 assets.
Not Available In The US
The Deribit exchange is not available to residents of the United States. This is not a failure on the part of the Deribit platform itself, rather, it is due to regulatory conditions in the US — which has some of the strictest financial trading requirements in the world. Options and futures trading is only available to accredited investors in the US.
Deribit Security Features
Deribit, like most big-name exchanges, employs state-of-the-art security technology to ensure client deposits are safe and the integrity of the platform is protected. The exchange holds 99% of client funds in cold storage wallets that cannot be accessed over the internet.
The servers used by Deribit are in a 24/7 surveilled data center with on-premise security personnel. Finally, the platform provides a host of security features for users, including 2-factor authentication, Yubikey support, and IP white-listing functionality.
Deribit maintains a platform insurance fund that covers defaults of over-leveraged traders and helps to reduce counter-party risk. Each of the four main supported assets — BTC, ETH, SOL, USDC — maintains their own pool of insurance funds. These funds are rarely used since the platform maintains strict liquidation guidelines that liquidate collateral before traders can default on their obligations. Bankruptcies that do occur are tracked on a case-by-case basis, and the counter-parties of these trades are made whole using the insurance fund. The fund itself is refilled through the platform’s liquidation fees.
The Deribit risk management system constantly analyzes your available funds to determine whether or not you can meet your trading obligations. For some users, it may be useful to partition their funds in order to create separation for different trades and strategies. This can be done by using Deribit’s sub-accounts. Each user account can have up to 20 sub-accounts. Each sub-account’s margin is treated separately from every other account. Funds can be transferred between sub-accounts instantly and at any time.
Deribit supports four main assets that all options and futures markets on the platform are in terms of:
|Options And Futures|
The platform also supports a wider variety of assets that are only supported for perpetual futures markets:
|Perpetual Futures Only|
Deribit Platform Availability
Due to strict regulations around the trade of financial derivatives, the Deribit platform is not available to residents of the US.
The exchange is also unavailable for residents of the following jurisdictions:
|Deribit Available Jurisdictions|
Democratic People’s Republic of Korea
Syrian Arab Republic
Virgin Islands (U.S.)
Deribit Customer Support Options
To get help, traders can open a support ticket to talk with Deribit’s support team, or, for faster turnaround, you can join the exchange’s official Telegram group and request help there.
For questions regarding Deribit’s API or any other technical features, you may email email@example.com.
Deribit Mobile App
Deribit provides an iPhone and Android mobile app which allows you to access your account, execute trades, and manage your trading positions from anywhere.
Deribit Fees And Costs
As a derivatives exchange, Deribit has several tiers of fees that include trading fees, delivery fees, and liquidation fees.
Like many other exchanges, Deribit uses a maker/taker model for its trading fees. This fee structure is used to encourage traders to add to (make) liquidity markets rather than taking liquidity. The trading fees for each contract available on Deribit are below:
|Contract||Maker Fee||Taker Fee|
|BTC Weekly Futures||-0.01%||0.05%|
|ETH Weekly Futures||-0.01%||0.05%|
|SOL Weekly Futures||-0.02%||0.05%|
|BTC Futures & Perpetual||0.00%||0.05%|
|ETH Futures & Perpetual||0.00%||0.05%|
|SOL Futures & Perpetual||-0.02%||0.05%|
|BTC Options||0.03% of the underlying or 0.0003 BTC per options contract||0.03% of the underlying or 0.0003 BTC per options contract|
|ETH Options||0.03% of the underlying or 0.0003 ETH per options contract||0.03% of the underlying or 0.0003 ETH per options contract|
|SOL Options||Zero maker fees||0.03% of the underlying or 0.0003 SOL per options contract|
Deribit also charges delivery fees on the following trades. Delivery fees are charged whenever the derivatives contract is settled and the underlying asset is “delivered” to the trader. For futures, the delivery date is the same as the expiration date, so delivery fees are paid by the person receiving an asset on contract expiration.
|BTC/ETH/SOL Weekly Futures||0.0%|
|BTC/ETH/SOL Daily Options||0.0%|
|BTC/ETH/SOL Options||0.015% – this fee can never be higher than 12.5% of the option’s value|
Liquidations for different instruments on the platform are also subject to several fees. Part of these fees get added to the Deribit insurance fund.
|BTC/USDC Futures & Perpetual||0.75%, (0.75% for maker orders and 0.70% for taker orders will be added to the insurance fund).|
|BTC/USDC Options||0.19% of the underlying asset or 0.0019 BTC per options contract (0.16% of the underlying asset, or 0.0016 BTC per contract is added to the insurance fund).|
|ETH/SOL Futures & Perpetual||0.9%, (0.90% for maker orders and 0.85% for taker orders will be added to the insurance fund).|
|ETH/SOL Options||0.19% of the underlying asset or, 0.0019 ETH or SOL per options contract (0.16% of the underlying asset, or 0.0016 ETH or SOL per contract, are added to the insurance fund).|
Who Should Use Deribit?
Deribit is a good choice for more advanced traders who are looking for a derivatives platform with low fees and a straightforward trading interface. While the platform does not support a ton of assets, those that it does offer feature deep liquidity and a team dedicated to making sure trades are executed quickly and securely.
Deribit Alternatives To Consider
Deribit is one of the most fully featured derivatives exchanges currently on the market. There are much bigger exchanges out there, however, and some of these alternatives beat out Deribit in terms of supported assets, fees, and markets. We compare some of these other options with the Deribit platform below.
Deribit Vs. Bybit
|Trading Fees||Supported Assets||Supported Derivatives Markets||Daily Trading Volume|
|Bybit||0.00% to 0.06%||50+||Options, Perpetuals, Futures||$7.38 billion|
|Deribit||-0.02% to 0.03%||13||Options, Perpetuals, Futures||$400 million|
Bybit is one of the few exchanges to provide derivatives and options that are as fully featured as Deribit in terms of supported assets and markets. The exchange lags behind when it comes to trading fees, however, with no option for fee rebates similar to those that Deribit provides.
Deribit Vs. BitMEX
|Trading Fees||Supported Assets||Supported Derivatives Markets||Daily Trading Volume|
|BitMEX||-0.01% to 0.075%||20+||Options, Perpetuals, Futures||$500 million|
|Deribit||-0.02% to 0.03%||13||Options, Perpetuals, Futures||$400 million|
BitMEX, similarly to Deribit, is a crypto derivatives exchange that provides a wide range of assets, low trading fees, and several derivatives markets. Deribit provides slightly lower fees, though they support fewer cryptocurrencies. Both exchanges support every type of crypto derivative, including options, regular futures, and perpetual futures.
How To Sign Up For Deribit
Step 1: Head to https://www.deribit.com/ and click Don’t have an account? to open the registration menu.
Step 2: Provide your email address, and country of residence, and select a unique username and password.
Step 3: Look for the activation link Deribit sends to the email you provided and click on it. You’ll be redirected to Deribit with your account now confirmed.
Step 4: With your account confirmed, you can start trading on Deribit.
Final Thoughts On Deribit
Deribit is a good choice for traders looking to buy and sell derivatives contracts. The exchange supports a handful of cryptocurrency assets — mainly BTC, ETH, and SOL. While Deribit does not have the largest selection of cryptocurrencies, they do offer rock-bottom fees and a hefty daily trading volume that ensures all trades have enough liquidity.
Frequently Asked Questions
Since Deribit is not licensed to operate in the US, they do not report to the IRS. However, crypto profits are traditionally subject to capital gains tax in most countries.
No, Deribit is not licensed to operate in the US.
Deribit is headquartered in Panama.
Yes, Deribit is a great choice for derivatives traders. Please note that Deribit is exclusively for derivatives and does not offer spot markets.
Yes, Deribit requires an identity verification process to be completed before you can trade.
Yes. Deribit has a track record of safety that is backed up by a whole host of security features and an insurance fund in case of trader insolvency.
Deribit provides leverage trading up to 50x.
Deribit features maker fee rebates for traders at -0.02% and taker fees that go up to 0.05%. These are generally considered low fees for the crypto exchange industry.