Best Crypto Futures and Options Exchanges
Best Crypto Futures and Options Exchanges - Bybit
Top Crypto Futures and Options Exchanges:
Bybit - top on the list of crypto derivatives exchanges
BitGet - Wide Variety of Tokens and Coins
Huobi Global - Provides traders with yield-generating opportunities
Binance - Low non-instant and instant buy fee
OKEx - Extensive Range of Pro Trading Options
The mediums to trade, sell and buy crypto continue to advance as more people understand the value of cryptocurrencies. Crypto derivatives are a great example of such mediums that allow people to easily make all crypto-related transactions.
It's worth noting that the behavior of derivative markets influences the price dynamics of cryptocurrencies. If you're unfamiliar with crypto derivatives, you're at the right place. Keep reading to learn about the types of derivative trading, trading options, their pros and cons, and some helpful tips for crypto trading.
Start trading crypto derivatives right now with ByBit!What are Crypto Derivatives?
A crypto derivative is a secondary contract deriving its value from primary underlying assets, such as cryptocurrencies. A few popular types of crypto derivatives are crypto futures, crypto options, and perpetual contracts.
Crypto derivatives and traditional derivatives work the same way because the buyer and seller enter the contract to sell or purchase an underlying asset. There's a predetermined time and price for the sale of these assets.
This way, the derivative has no value and only depends on the underlying asset for value. So, for example, the Ethereum derivatives depend on the value of the Ethereum cryptocurrency.
Bitcoin (Crypto) Futures
Crypto Futures refers to when a buyer and seller agree to trade cryptocurrency in the future, with a specific date and price agreed upon. Most of the time, the contract terms are the same, but the other details may differ.
Institutional investors prefer to utilize crypto Futures to predict future movements in price and market sentiment. Depending on the future price movement, the trader may gain or lose. For example, an investor may buy Bitcoin futures contracts, anticipating a price increase or decline.
If the buyer gets a future contract for one BTC, worth $40k, and the price increases to $60k, the buyer gains a $20k profit. However, if the price drops to $30k in that time, the buyer suffers a $10k loss.
A Bitcoin Futures contract is the agreement in which a seller agrees to sell a certain amount of Bitcoin to a buyer on a specific date in the future.
Crypto Options
Crypto Options refer to a crypto derivative in which a buyer or seller trades crypto for a set price at a predetermined date in the future. Options differ from Futures because buyers have the Option not to buy the crypto if they choose.
Call and put options and American and European options are a few types of crypto Options. Buyers can use the call option to buy the crypto at a specific date, while sellers can use the put options to sell the crypto at a specific date.
The European Option ensures that the crypto is sold exactly on the agreed date, while the American options allow traders to sell it before the agreed date. In crypto Options, traders must pay additional fees on top of the crypto price.
For example, if they're purchasing one BTC worth $40k in crypto Options, they have to pay $40k on top of the Option price. The Option could cost, say, $800. The final payment by the trader would be $40,800.
So, if the price drops to $30,000, you can choose not to fulfill the
Perpetual Swaps/Contracts
Unlike traditional Futures contracts, a Perpetual contract is a type of Futures contract that doesn't have a contract expiry date. This allows traders to hold their position for as long as they want.
Perpetual contract trading or Perpetual Swaps are based on an underlying Index Price. This Index Price is the average price of the coins being traded, according to its relative trading volume and the major spot markets.
This is why most cryptos sold in Perpetual Swaps have a price close to or equal to those on spot markets. It's worth noting that the mark price may differ from the spot market price, but only in extreme market conditions.
Best Crypto Derivatives Exchanges 2024
Here is a complete comparison of the best Bitcoin derivatives options exchanges and their minimum deposit, max leverage, and supported coins.
| Minimum Deposit | Max Leverage | Supported Markets | ||
|---|---|---|---|---|
$0 |
100x |
111 |
||
₮1 (USDT) |
Up to 1:125 |
over 100 |
||
$100 |
125x |
174 |
||
$10 |
20x |
201 |
||
0.00005 BTC / 0.00000001 USDT |
1:1 |
over 100 |
Crypto Derivatives Fees Compared
Here is a complete comparison of the minimum and maximum maker and taker fees of the best crypto derivatives exchanges of 2023.
| Max Taker Fee | Min Taker Fee | Max Maker Fee | Min Maker Fee | |
|---|---|---|---|---|
ByBit |
0.1% |
0.06% |
0.1% |
0.01% |
BitGet |
0.075% |
0.03% |
0.025% |
0.05% |
Huobi Global |
0.04% |
0.04% |
0.02% |
0.02% |
Binance |
0.03% |
0.03% |
0.01% |
0.01% |
OKEx |
0.15% |
0.04% |
0.08% |
0% |
Supported Contracts Compared
Here is a complete comparison of the crypto contracts supported by the best crypto derivatives exchanges of 2023.
| ByBit | Huobi Global | Binance | OKEx | BitGet | |
|---|---|---|---|---|---|
Bitcoin Futures |
Yes |
Yes |
Yes |
Yes |
Yes |
Altcoin Futures |
No |
No |
No |
Yes |
Yes |
Inverse Futures |
Yes |
No |
Yes |
Yes |
Yes |
Crypto Options |
Yes |
Yes |
Yes |
Yes |
Yes |
Perpetual Swaps |
Yes |
Yes |
Yes |
Yes |
Yes |
Best Crypto Derivative Exchanges Review
Here is a list of the best crypto derivatives exchanges we picked out regarding their additional services, fee structure, availability, ranges of coins offered, and rapid transfers. Check out the in-depth overviews on each platform, ponder the pros and cons, and pick the best.
Bybit
ByBit is top on the list of crypto derivatives exchanges since it is a specialized platform that deals only with the Bitcoin derivatives market. It gives you a choice to trade from different countries for bigger profits.
Bybit claims that its platform can deal with up to 100,000 transactions every second, making it extraordinarily supreme for buyers and sellers. Another reason why Bybit is the most chosen platform is its 0% fee structure.
This way, both the buyer and seller can make transactions at an optimal and settled price without any extra fee required by the platform. The coins supported by Bybit include:
Bitcoin (BTC)
Ethereum (ETH)
Bitcoin Cash (BCH)
Tezos (XTZ)
Chainlink (LINK)
In addition, the exchange supports more than 80 payment methods which makes it even more accessible for the traders. That includes credit/debit cards, in-person cash payments, bank transfers, etc.
This platform was launched in 2018, but its growth has been remarkable. It has more than 2.5 million registered users around the globe, and that number only continues to grow.
It also allows you to test how the platform works through the Bybit test net, ensuring transparency throughout the interface. The exchange's robust security management includes SSL certificates and two-factor authentication.
Users can simply access Bybit through the website or their app, and every newcomer gets a bonus of $90 to kickstart their trading!
👍 Pros
•Fewer risks of price manipulation
•Leverages toward a bigger profit
•Supports a wide range of coin and USDT settled contracts
•More than 80 payment methods
•Increases bonuses
👎 Cons
•Unregulated platform
•Limited trading pairs
•Difficult navigation
BitGet
BitGet is a popular crypto exchange based in Singapore, offering traders a great selection of digital currencies to trade on the spot or in futures markets. It’s also a trusted platform with regulatory licenses from the US, Canada, and Australia.
Pros
Wide Variety of Tokens and Coins
Bitget supports a wide variety of tokens and coins. These options give users the ability to access a broad range of cryptocurrencies and diversify their portfolios.
Copy Trading Feature
Bitget has a copy trading feature that allows users to copy the trades of successful traders. This means that users can replicate the strategies of top traders and increase their trading profits.
Cons
Risk Level
The prices of cryptocurrencies can be volatile and can change quickly due to various factors.
Withdrawal Methods
Bitget only offers cryptocurrency withdrawals, meaning users cannot withdraw funds in their local currency.
Huobi Global
With its outstanding reliability and liquidity, Huobi has secured a leading position in the crypto exchange market. Along with its on-point security parameters, it also offers smooth and quick services.
Huobi offers more than 90 payment methods for crypto trading, such as Apple Pay, wire transfer, credit/debit cards, or bank transfer. With an easy signup process and high security, this platform is safe and simple for even beginners.
It offers a big security reserve fund for its traders to deal with extreme security accidents and maintain a high level of safety. What traders like about Huobi Global is that there are no transaction fees for buyers and sellers.
Huobi also supports a wide range of cryptocurrencies, with over 400 cryptos on the exchange. The most frequently used cryptocurrencies include:
Tether (USDT)
Ethereum (ETH)
Litecoin (LTC)
Huobi Token (HT)
Huobi USD (HUSD)
Bitcoin (BTC)
Uniswap (UNI)
Zcash (ZEC)
Monero (XMR)
Huobi was launched in 2013 in Asia before expanding further around the globe in 2017. Although this platform has faced many challenges in the past, its impressive services and high liquidity rate have made it possible for Huobi to gain consumer trust again.
👍 Pros
•Highly liquid
•Provides traders with yield-generating opportunities
•Supports 400+ cryptos
•Intuitive user interface
•90+ payment methods
👎 Cons
•Unregulated platform
•Not beginner-friendly
•Lengthy verification process
Binance
When it comes to Bitcoin derivatives trading, no exchange can compete with Binance. It is well-known for its reliability and the wide range of 60+ supported cryptocurrencies. Some of the popular cryptos supported by this decentralized platform include:
BNB
Bitcoin (BTC)
Ethereum (ETH)
The exchange offered by Binance is secured and provides two-factor authentication for traders. Furthermore, as P2P trades can be very slow, Binance accelerates the progress by charging an additional fee of 0.5% for a faster transaction.
Binance P2P Platform ReviewMoreover, the standard fees on Binance are 0% for the taker and 0.35% for the maker. Users can reduce this fee further by owning Binance's native token, BNB. When it comes to Bitcoin derivatives trading, Binance is pretty versatile.
It offers Binance Options, Binance Futures, and Binance Perpetual Contracts. It also has various order types available: limit order, market order, stop-limit order, stop market order, trailing stop order, post only order, and one-cancels-the-other order.
Crypto options trading on Binance offers only one strike price. This strike price is equal to the BTCUSDT perpetual contract on Binance Futures. In addition, Binance offers American options instead of European, which means you can exercise the Option before the predetermined expiry date. These options are also settled in cash, which means the physical delivery of crypto is unnecessary.
👍 Pros
•Low non-instant and instant buy fee
•Variety of trading options and order types
•Risk and reward profile of Binance Options
•Over 400 coin selections
•Intuitive and straightforward design
👎 Cons
• Margin trading and other order types are not available on the US version.
• Issues in account verification
•No built-in digital wallet is available.
OKEx
OKEx is a premier cryptocurrency exchange that offers a variety of products and services for crypto traders. OKEx offers both crypto-to-crypto trading, as well as fiat-to-cryptocurrency trading.
Pros
Extensive Range of Pro Trading Options
OKEx offers an extensive range of professional trading options including futures, fiat-to-crypto support, leverage trading, and more.
Secure
OKEx uses encryption technology to protect users' data and funds, as well as two-factor authentication for added security.
Cons
Mixed Reviews on Customer Service
OKEx's customer service has received mixed reviews from users, with some claiming the service is too slow or unhelpful.
CNY Only Fiat Supported for Now
At this time, OKEx only accepts deposits in Chinese Yuan (CNY). This option makes it difficult for non-Chinese traders to access the exchange.
OKEx Fees and Minimum DepositHow To Trade Crypto Derivatives
Here is a complete step-by-step guide on how to trade crypto derivatives:
First, you must register on any crypto derivatives exchange that supports derivatives trading. Binance, Huobi Global, and Bybit are a few great options to consider.
Click on "Open Now" to activate your crypto exchange account.
Navigate to the "Options Trading" or "Futures Trading" page.
Click on the contract you want to trade based on the price and date.
Then, adjust the position mode before selecting "Hedge Mode. Don't forget to set the Leverage Multiplier.
Then, transfer your assets into the Futures account.
Click on "Open a Position" and see the various order types available on the exchange, such as limit, market, and stop limit.
Continue to monitor your position. You can check all your positions at the bottom of the screen.
Finally, close your position by clicking on the "Limit Close" or "Market Close" option. Make sure that you select a one-way mode.
Click on "Close" under the Hedge Mode option. Now, you're ready for Options or Futures trading.
Crypto Futures Trading Fees
When trading futures and derivatives contracts, it is important to be aware of the various fees that may be involved. The most common fees associated with crypto futures trading include
Trading Fees
These are fees charged by the exchange for placing trades.
Funding Fees
These are fees that traders pay for the privilege of entering into a leveraged position.
Extension Fees
These are charges incurred when a futures contract is held past its expiration date.
Leverage Fees
These are charges for using additional leverage beyond what is available to traders on the platform.
Is it Legal to Trade Crypto Futures?
Many regulators, including the CFTC and SEC, are involved in crypto regulation in the United States. In the UK crypto regulation is overseen by the Financial Conduct Authority or FCA, with crypto being classed as a financial service.
Depending on the country, laws and regulations can vary greatly, so it’s important to understand the legal implications before trading crypto futures.
Are Crypto Options safe?
Cryptocurrency markets are known for their volatility, making it difficult to predict in which direction the prices will move accurately.
When trading crypto futures and options, you should not chase the price and stay within your limits. The money you put in any single trade should never exceed what you are willing to lose.
Should I Trade Crypto Derivatives?
Investors mainly use crypto derivatives for hedging or speculation. Investors that enjoy more flexibility than just spot trading in an exchange opt for derivatives trading. It allows them to explore different types of trading, such as Futures, Options, and Perpetual Swaps.
Investors can purchase contracts that allow them to buy or sell crypto at a price that is agreed upon ahead of time. However, it all depends on the type of crypto derivative they choose. Those that are ready for such a commitment should trade crypto Futures.
Those who need more flexibility in crypto derivatives trading would benefit more from Options trading. Crypto Options trading allows you to exercise the Option only if you want to; you can back out before the contract reaches its expiry.
The benefit of crypto options is that if you back out of a contract, you only have to pay the initial amount for the Option, not the cryptocurrency. But it's worth noting that backing out of too many crypto options will leave you with no cryptos in your account while still paying an additional fee multiple times. So it's best to utilize this flexibility wisely.
Keep in mind that the crypto market is pretty volatile, so you can never accurately predict the prices of tokens in the future. This is not a recommendation or financial advice for crypto derivatives trading. Investors must invest in crypto at their discretion if they have the appropriate risk appetite and financial freedom.
Pros
Here are a few advantages of trading crypto derivatives:
Derivative contracts require low transaction fees
Crypto derivatives help traders practice market efficiency and ensure accurate market prices
Crypto derivatives help with risk mitigation when it comes to fluctuating crypto prices
Traders can benefit from crypto derivatives by using leverages to increase profit margins
Crypto derivatives help determine the price of crypto
Crypto derivatives help traders diversify their portfolios and minimize portfolio risks
Crypto derivatives markets are highly liquid
Cons
Here are a few disadvantages of trading crypto derivatives:
Crypto derivatives trading is not legal globally
Crypto derivatives can be volatile due to fluctuating crypto prices
OTC Futures trades don't always stick to compliance procedures
Crypto Options Trading vs. Traditional Options Trading
While traditional options trading has been around for decades, the recent rise of cryptocurrencies has introduced a new domain of options trading: Crypto Options Trading. These two forms of trading differ significantly in various aspects, including underlying assets, market accessibility, regulation, volatility and liquidity, and market maturity.
Underlying Assets
Traditional options trading involves a broad array of assets such as stocks, bonds, commodities, and indices. Conversely, crypto options trading focuses on cryptocurrencies as the underlying assets, with Bitcoin and Ethereum being the most common.
Market Accessibility
Traditional options markets follow set trading hours, typically in line with standard stock market hours. Crypto options markets, on the other hand, operate 24/7, given the global and decentralized nature of cryptocurrencies.
Regulation
Traditional options markets are well-regulated by financial authorities like the SEC in the US and the FCA in the UK. Crypto options trading is less regulated due to the novelty of the asset class and its global and decentralized nature.
Volatility and Liquidity
Traditional options markets tend to be less volatile and more liquid than crypto options markets. Cryptocurrencies can experience substantial price swings, leading to higher volatility in the crypto options market. Additionally, the crypto market is still in its infancy, leading to less liquidity compared to established traditional options markets.
Market Maturity
Traditional options markets are mature, with sophisticated tools and strategies developed over years of trading. Crypto options markets are still relatively new and developing, offering fewer tools and less established strategies.
Why Trade Crypto Options?
Crypto options trading has gained increasing popularity due to the potential benefits it offers. Like traditional options, crypto options provide a way for traders to profit from price fluctuations without needing to own the underlying asset directly. Here's why many traders are gravitating toward crypto options:
Earn Passive Premiums
Writing or selling options can generate passive income, known as premiums. When a trader writes a crypto option, they collect a premium from the buyer. If the option expires worthless (i.e., the price of the underlying cryptocurrency doesn't hit the strike price), the writer keeps the premium, thus earning a passive income.
Price Speculation
Crypto options allow traders to speculate on the price movements of cryptocurrencies without having to buy or sell the actual digital assets. Traders can purchase call options if they believe the price will rise, or put options if they think the price will fall, potentially earning profits if their predictions are correct.
Hedging
Crypto options can be used as a form of insurance to protect against price fluctuations in a trader's cryptocurrency portfolio. For instance, owning a put option acts as a hedge because it increases in value if the price of the underlying cryptocurrency falls, offsetting losses from the decline in the portfolio's value.
Earn Through Volatility
Crypto markets are known for their high volatility. While this can be risky, it can also present opportunities. Traders can potentially profit from this volatility by trading options. For example, an increase in implied volatility often leads to a rise in option premiums. Traders who write options in such situations can collect higher premiums, thus boosting their potential returns.
Are Crypto Options Safe?
Trading crypto options involves a degree of risk, like all forms of trading, and its safety depends on several factors. Understanding these risks is crucial for anyone considering this type of trading. Here are some important points to take into account:
Market Volatility
Cryptocurrencies are highly volatile. This can lead to substantial gains but also significant losses. This volatility can be particularly problematic for options trading, as rapid price changes can quickly make an option out-of-the-money.
Lack of Regulation
The cryptocurrency market is still developing and lacks the rigorous regulation seen in more established financial markets. This can increase the risk of market manipulation and fraud.
Counterparty Risk
In the world of crypto options, you're often dealing with other individual traders rather than large, regulated institutions. This presents a counterparty risk. For example, if you purchase an option, there's a risk that the seller won't fulfill their obligation if the option is exercised.
Technical Risks
Crypto options trading often involves complex platforms and wallets, and technical glitches can lead to losses. Also, because cryptocurrencies are digital, there's a risk of losing access to your assets if you lose your private keys or fall victim to a hacking attempt.
Lack of Investor Education
Crypto options are complex financial instruments. Understanding them is not easy, especially for new traders. Without proper knowledge, traders can make mistakes and potentially lose money. It's important to learn about crypto options before starting to trade to reduce risk and make better trading decisions.
Summary
Derivatives trading is a unique type of crypto trading, and it comes in three forms: Options, Futures, and Perpetual Swaps. Each type of contract has different terms but the same result: the purchase of crypto at a predetermined time and price.
While Futures promise a guaranteed trade, Options offer less commitment. Meanwhile, Perpetual contracts are entirely different, requiring no predetermined time or expiration date.
Binance, Bybit, and Huobi Global are some great exchanges for derivatives trading safely and efficiently. They offer a wide range of cryptocurrencies and order types, low transaction fees, and an exceptional trading experience.
Like any crypto trade, derivatives trading can be pretty volatile and risky. So you must ensure that you're careful and consider your financial freedom before investing your hard-earned money into crypto. Follow our step-by-step guide on how to trade crypto options efficiently.
FAQs
Here are the answers to the most frequently asked questions about the best crypto derivatives exchanges in 2024:
Why Are Crypto Derivatives Important?
Crypto derivatives are important for a myriad of reasons. Firstly, they help increase liquidity in the crypto market, making it easier for traders to open or close positions. In addition, derivatives traders can also benefit from portfolio risk mitigation and diversification. Lastly, crypto derivatives help trade optimize the price discovery by facilitating short-term or long-term investments.
What is the Initial Margin?
The "initial margin" refers to the minimum value that a trader pays to open their leveraged position. This leverage can range from 2x to 125x, depending on the derivatives exchange you choose.
For example, traders can buy 10,000 BNB with a 1,000 BNB initial margin at a 10x leverage. Their initial margin would be 10% of the complete order. This initial margin acts as collateral for your trade, backing up your leveraged position.
What is the Maintenance Margin?
The "maintenance margin" is the minimum collateral a trader holds to keep their position open. But, your margin level may drop below this level. In this case, you either receive a margin call or get liquidated. A margin call requires you to fund your account further.
The value of maintenance margins is dynamic as it changes according to your account balance and the market price.
What is the Funding Rate?
Regular payments between a buyer and seller are known as "funding." Contract buyers have to pay contract sellers when the funding rate is positive (above zero.) Contract sellers have to pay contract buyers when the funding rate is negative (below zero.)
The interest rate and the premium are the main factors influencing the funding rate. But, of course, different exchanges have different interest rates. Meanwhile, the price difference between Futures and spot markets affects the premium.
Methodology for compiling our ratings of crypto exchanges
Traders Union applies a rigorous methodology to evaluate crypto exchanges using over 100 quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
User reviews. Client reviews and feedback are analyzed to determine customer satisfaction levels. Reviews are fact-checked and verified.
Trading instruments. Exchanges are evaluated on the range of assets offered, as well as the breadth and depth of available markets.
Fees and commissions. All trading fees and commissions are analyzed comprehensively to determine overall costs for clients.
Trading platforms. Exchanges are assessed based on the variety, quality, and features of platforms offered to clients.
Extra services. Unique value propositions and useful features that provide traders with more options for yield generation.
Other factors like brand popularity, client support, and educational resources are also evaluated.
Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.