Deribit Review — Options, Fees, APIs and Testnet
A comprehensive review of Deribit Exchange
In this article, we will review Deribit, an online cryptocurrency exchange platform founded in 2016. Deribit is based out of the Netherlands and specializes in the futures and options market. It’s matching engine follows a principle of “first come, first serve.” It can process thousands of orders per second and hundreds of orders per second from a single account. It does not allow self-trading. It has 24/7 trading hours.
How to create an account on Deribit?
You can create an account under the Register tab. It will send you an email verification link. After you click on the link, your account will be created.
Now you have to complete your KYC verification. For the detailed process, you can check the next section. Now you are ready to start trading.
Deribit KYC Process
It offers two different levels of KYC — Level 0 and Level 1. Only necessary information is required in Level 0, whereas in Level 1, identification proof is required.
KYC Requirements
If you give any false information, Deribit can immediately close your account and liquidate any open positions. It has partnered with Chainalysis for monitoring any suspicious cryptocurrency transactions. You can do your KYC under the verification tab under my account.
Trading options
Deribit provides an extensive range of trading options, and users have access to both an Options and a Futures exchange. The platform specializes in offering leveraged trading. It provides up to 100x leverage in Bitcoin and up to 50x leverage in Ethereum. You can also participate in margin trading and practice their trading strategies on the Deribit testnet.
Deribit Futures
It is an agreement to buy or sell bitcoin or Ethereum at a predetermined price at a specified time in the future. One contract is for 10 USD. It also offers perpetual futures, i.e., they do not have an expiry date. All the settlements take place at 8:00 UTC on the last Friday of the month. There are three quarterly futures — Last Friday of March, June, September, and December. All the profits made are added in real-time. One million maximum contracts are allowed.
The price at which a futures contract will be valued during trading hours is called the mark price. It is the addition of index price and 30 seconds EMA (Futures Market Price — Index Price).
Deribit Options
It offers European style options that can be exercised only when they expire. This happens automatically when you are using Deribit. All the cash settlements will take place rather than the transfer of assets.
It also gives you other important information, such as Delta, volatility, and others. A lot of information is available on the platform. You can view the recent trades and order books on the platform. You can also check your order history and trade history. There are different types of options available such as Limit, Market, Stop-Limit, and Stop-Market.
Order Types
Limit: It has a predefined price. It can only be canceled if it has been executed or has been removed manually.
Market : These orders are executed immediately. It would be at the bid for a sell and the offer for a buy.
Stop-Limit: It is a limit order that has a stop loss attached to it. It can be only executed at the market price, and then you will have a stop loss to protect the losses.
Stop-Market: It is a market order that has a stop loss attached to it. It can only be executed at the market price, and then you will have a stop loss to protect the losses.
The duration for which you want your order to be alive is called “Order Life.” There are three types of order life -
- Good-Till-Cleared (GTC): This limit order will remain open permanently. It can be closed only if it is either manually canceled or the order has been executed.
- Fill-Or-Kill (FOK): This will either execute an order immediately and in its entirety or not at all. Partial orders are not at all possible.
- Immediate-Or-Kill (IOC): It is similar to the FOK order except that it only allows for partial execution. It will execute part of the order and cancel those portions that cannot be executed.
If you want absolute control over your orders, GTC is a great option.
Security
Deribit uses cold storage to secure its users’ funds. Approximately 95% of the funds are stored in this manner. This makes it safe from any hacking attempts but reduces the speed of customer withdrawals.
It also has two-factor authentication (2FA). It is not enabled by default. You can set it up after login. Additionally, it has a feature of IP pinning; if there is a change of IP address during a session, it terminates the session. You can adjust their session timeouts and the default timeout period.
Cryptocurrency support
Deribit supports Ethereum and Bitcoin. If you have to trade in Bitcoin futures, perpetual contracts, or options, you have to deposit Bitcoin and the same for Ethereum. It does not support any other cryptocurrency.
User Experience
It has an intuitive and user-friendly UI. It has a trade matching engine with less than 1ms latency. TDeribit website supports both light and dark themes. Deribit App is available on both Android and iOS. Deribit API integrates with trading bot software, for example, HaasOnline, Actant, and others. This way you can use run Deribit trading bots.
Deribit Review: Deposits and withdrawals
To make a deposit, you need to select “ Deposit” from the dropdown in the upper right-hand corner. It generates a unique Bitcoin address. You can deposit your fund at that address. It generates a new address each day.
For your withdrawals, you need to create a new wallet profile and attach your external wallet address. Your withdrawals will be processed immediately if funds are present in hot storage else it will take time. If your withdrawals are pending, it is due to the busy bitcoin network. If you want your transaction to be accelerated, you can try theBTC.com transaction accelerator.
Deribit Fees and Charges
It follows a maker-taker model. There are two types of order. A “maker” order adds liquidity to the order book. It is executed instantly. A “taker” orders removes liquidity from the order book. It is not executed instantly.
The options fee can never be more than 12.5% of the options price.
There is also an additional fee for options and futures delivery. It is 0.025% and 0.015% for futures and options respectively.The additional fee for options can never be more than 12.5% of the options price.
There is also an additional fee for liquidation. It is added to the insurance fund automatically.
There are no fees charged for deposits. If the amount you want to withdraw is present in the cold storage, there is no fee deducted. Only a percentage of coins is present in hot storage. The rest of it is in cold storage. So there is a chance that the withdrawal cannot be completed immediately. If it is required, then once a day, balance can be added from cold storage to hot. So the withdrawal fee actually depends on the state of the network. Learn more about Deribit Fee here.
Languages and supported countries
Deribit is supported in all the countries except if you are located or a resident of the following countries -
- Canada (Quebec)
- United States
- Panama
- Cuba
- Japan
- Guam
- Sudan
- Iraq
- Panama
- Virgin Islands (U.S)
- Iran
- Samoa
- Republic of Korea
- Syrian Arab of Republic
- Puerto Rico
- Sudan
It supports English, Chinese, Korean, Japanese, Spanish, Russian, and Turkish.
Deribit Referral Incentives
Like many other crypto exchanges, Deribit also has referral incentives through its “Deribit Affiliate” program. All the new users who join through the affiliate program get a 10% discount for the first six months. The users who refer get a 20% commission for the first 6 months and a 10% commission after that. To participate in this program, you have to agree to the terms and conditions.&text=If%20Deribit%20collects%20fees%20in%20USDT%2C%20Deribit,pay%20out%20fees%20in%20USDT.).
Use our Deribit referral link and support our work.
Deribit review: Insurance Fund
Deribit offers an insurance fund that helps in covering the loss of bankrupt traders. It ensures that the winning trader receives full payment and the losing trader is not in debt. It helps in giving negative equity protection to you. If insurance funds get exhausted, then the amount is balanced from the winning traders though there is a margin involved.
It is not used to cover the losses of the traders but used to cover any difference between the bankruptcy price and the execution price of the liquidation order. They publish all the real-time occurring bankruptcies and the state of the insurance fund.
Deribit Customer support
Deribit always pays a lot of importance to its customers. It has a live chatbox. and you can also use Deribit Telegram channel for interacting with its users. Zqoon and MrJozza are the community managers in the channel to help you solve your queries. To contact their support staff you can raise a ticket in deribit.zendesk.com.
You can also email them at support@deribit.com. For feedback, you can write to them at feedback@deribit.com
If you have any technical queries regarding their API or any bug reports, you can write to them at dev@deribit.com.
For business and press and investor relations, you can contact them at info@deribit.com and ir@deribit.com, respectively.
They also run a Youtube channel that has a lot of explanatory videos. They can also be contacted via Twitter.
Deribit API
It is helpful for traders who develop their own trading algorithms and bots. Deribit APIs have a lot of scope for developers. It has a Websocket API and a REST API. The REST API has both public and private parts.
If you want to develop something using the market data, you can use the public API. Or, if you want to use the private API, it must be signed with your API key.
You can get your API key under your account in the API tab. You should keep your API key safely. It is the only way to recover your API keys if it is lost.
Deribit Testnet
Deribit offers live testnet. It can be accessed ontest.deribit.com. You can create another account or use the same one and get 10 BTC as demo funds.
Deribit Demo account is helpful for beginners or traders who want to get used to the Deribit UI. It can also be used to develop bots on the Deribit API. You can try your cryptocurrency algorithms before using it on live accounts. It cannot replicate the “slippage” of live orders. This feature is only provided by a few cryptocurrency exchanges.
Deribit Pros and Cons
Pros
- Transparent team.
- Offers high leverage.
- Trading fees are competitive.
- Deribit has insurance fund protection.
- It is a safe and trustworthy platform. It has never suffered from any major attacks. Once their trading engine malfunctioned, they paid all the affected customers.
Cons
- It is not beginner-friendly.
- It does not have fiat support.
Conclusion
In conclusion, we can summarize that Deribit has a lot of features such as futures and options, insurance funds, Deribit API, Testnet, strong customer support, and a very secure platform to perform cryptocurrency exchanges. Deribit is a legit exchange, build for professional traders.
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