FTX Crypto Exchange Review | Trading Fees, Features, Pros and Cons
A comprehensive review of cryptocurrency derivatives exchange FTX
FTX is a crypto exchange backed by Alameda Research, a top cryptocurrency liquidity provider. It is among the top five derivatives exchanges by volume. Binance, a leading cryptocurrency exchange, invested a large sum in FTX in December 2019. This shows that it is a promising and trustworthy platform.
Tradable Products
Let’s see different tradable products offered by FTX.
1. Futures
It is a type of agreement to buy or sell an asset at a predefined price. It supports perpetual futures on more than 20 cryptocurrencies such as BTC, BNB, LINK, etc. FTX crypto exchange also offers Index Futures, which allows you to trade several segments of the crypto market with much more ease. They include large-cap, mid-cap, and small-cap coins. You can also trade exchange tokens, privacy tokens, and regional baskets. There are oil contracts that expire to the spot price of WTI oil.
2. FTX Leveraged Tokens
These tokens provide you leveraged exposure to the cryptocurrency market without managing a leveraged position. FTX exchange provides 45 different leverage tokens.
The platform offers up to 101x leverage. It places 10x leverage as default for safety. There are divided into three different categories:
- 1x tokens are known as Hedge. If ETH goes up by x%, ETHHEDGE goes down by the same percentage.
- 0.5x Long is known as HALF. If ETH goes by 2x%, it goes up by x%.
- 3x tokens are known as BULL or BEAR
The Bull tokens are ERC20 token. If ETH perpetual futures go up by x%, then the ETHBULL goes up 3x%, and ETHBEAR goes down by 3x%.
The BULL and the BEAR tokens automatically rebalance themselves to maintain target leverage and prevent liquidations.
3. FTX MOVE Contracts
Move Contracts allow you to trade based on the movement of the price of a specific cryptocurrency by risking only a small amount. The movement can be in either direction.
They are futures that expire according to the raw amount of BTC. It can be daily, weekly, monthly, or quarterly. The weekly contracts need not correspond to the calendar week. The primary determinant is the overall volatility of the BTC over a set period. This feature attracts a lot of users to the exchange.
4. Options
It offers a European style options contract. They give you the right to sell an underlying asset at a predefined date and price, but it is not mandatory. When you open an options contract, you can choose it as either ‘right to buy’ or ‘right to sell.’
You can trade long or short with leverage. Also, you can set your strike price and expiration time. After entering all the necessary information for setting up the options contract, you get a quote from FTX to generate a bid or offer the deal within 10 seconds. They are highly customizable.
Also, read our Deribit Review: Bitcoin Futures and Options Exchange
5.Spot Markets
It enables users to purchase cryptocurrencies and then trade them using traditional techniques using market matched orders. Popular digital cryptocurrencies such as BTC, ETH, LINK, FTT, BCH, BNB, USDT, BTMX, TRYB, PAXG, and XAUT are all available for spot trading.
6. Prediction Markets
They enable users to trade in more traditional ways. It is similar to conventional betting. You can bet on any real-world event. You will either win, and the contract will settle at 100%, or you will lose at it will drop at 0%. One of the famous examples is that you can bet on who will win the upcoming elections. Each candidate will have their contract. The buy-in price will differ for each candidate, and it will depend on the likelihood of winning. They can long or short each contract.
FTX OTC Desk
Suppose you are buying a large number of assets. In that case, it may be suitable for you to buy ‘over the counter’ or ‘OTC.’ Generally, professional traders choose this option because the order book might be thin to execute the trade. Another reason may be that it may affect the price of that cryptocurrency.
Most exchanges offer this option, but FTX charges zero fees outside the spread for the same. You can request OTC quotes. It provides preferential rates. You can know more about it by checking FTX’s OTC Quote portal.
How to create an account on FTX exchange?
To create an account in FTX, you have to click on the Register tab in the top right corner. You can secure your account using two-factor authentication in the profile settings. Next, you need to complete your KYC. The details are mentioned in the below sections.
At any point in time, FTX can ask for more details if it suspects any malicious activity. You can do your KYC under the “Verify Identity” tab in your account.
FTT Token (FTX’s native token)
FTT is the native token of FTX Exchange. It gives certain perks to the users such as -
- You have to pay less FTX trading fees.
- You receive socialized gains from the insurance fund.
- You can buy and burn your fees weekly.
- You can use it as collateral for futures trading.
It can be traded on Spot/Futures of the exchange. For example, it can also be traded in Binance.
Cryptocurrency support
FTX supports over 30 cryptocurrencies. Additionally, the Crypto exchange also offers trading for several indices. For example, EXCH comprises several exchange tokens by utilizing the weighted average of BNB, HT, OKB, and LEO prices.
Payment Methods
It supports various Fiat deposits and withdrawals for the following currencies. It doesn’t support INR for now, but we might see an integration soon as Binance has invested in FTX that has acquired WazirX exchange.
- USD
- EUR
- HKD
- SGD
- GBP
- CHF
- ZAR
- AUD
- CAD
FTX Trading Fees and Charges
FTX offers a tiered fee structure.
A funding fee is also charged for perpetual contracts. It is not taken by the exchange. It is given to the holders of the opposing contract.
It offers fee discounts to FTT holders. The taker fees cannot be below 0.015%. You are given discounts based on your FTT holdings.
You are charged 0.10% for creation and redemption for leveraged tokens and 0.03 % as a daily management fee.
If you are using the leverage of 50x, it increases the trading fees by 0.02%, and for 100x or higher, it increases by 0.03%. It is paid to the insurance fund.
The fees for move contracts depend on the underlying index and not on the price of the Move contract.
It does not charge a fee for deposits or withdrawals. You are also not charged for converting in your exchange wallet or OTC trading.
If your fiat/stablecoin deposit/withdrawal volume is more than the trading volume, FTX crypto exchange charges you a withdrawal fee of up to 0.10%. They reach out to you before setting this.
Languages and supported countries
FTX supports the following languages -
- English
- Spanish
- Italian
- Chinese
- Portuguese
- Korean
- Russian
- German
- French
- Turkish
- Dutch
- Vietnamese
FTX Liquidation Engine
FTX has built its liquidation engine from scratch. It uses intelligent and efficient values to choose the liquidation process.
It sends traders reasonable and volume-limited liquidation warnings to gradually close positions that drop below their maintenance margin of 4.5%.
This prevents the probability of clawbacks, even though they are still possible in high market unpredictability. You should watch out for their estimated liquidation price.
You can decrease your probability of liquidation by trading with lower leverage, and always use a stop loss!
FTX Customer support
You can write to them at support@ftx.com. If you are in Korea, you can also write to them at support@ftxkr.com. They also have an active Telegramchannel in over ten languages. There is a detailed FAQ section available on the website. You can also contact them through their WeChat group (FTX_Official).
They also have a Youtubechannel where they regularly share updates on how to use the platform effectively.
User Experience
The website has a lot of features and is user-friendly. It also supports the dark mode. Whenever you hover over a button, there is information about that feature.
There are a lot of articles, videos, and user manuals on how to get started with FTX. It uses a standard chart from TradingView. You can customize this chart. The grouping of the order entry form, order book, and others can be rearranged. You can converse with others in the Trollbox chat window.
You can download the FTX app from Playstore and iOS App Store. In addition, FTX also allows you to automate your crypto trading using Rest API.
Security
According to Mozilla’s Observatory-test, FTX has B+ security. It is an imposing score.
It also uses two-factor authentication. You can use Authy, Google Authenticator, or SMS for the same. Besides, you can also use a separate password for withdrawals. Under the ‘login’ section, you can add permission for different subaccounts.
Furthermore, the FTX crypto exchange has an incredibly specialized team from colleges like MIT and Berkeley and firms like Google and Facebook.
Lastly, the FTX is associated with huge names in the cryptocurrency space. FTX’s partners’ rundown incorporates firms like Circle, FBG Capital, and True USD, which by supporting the trade vet for its dependability.
The FTX Insurance Fund
The insurance fund is used to prevent customer losses because of a sudden and massive market movement, which would likely rapidly liquidate many open positions on the exchange.
Traders who utilize 50x — 100x leverage pay higher fees, which directly add to the insurance fund because of their increased liquidation probability. If FTX’s liquidation engine fails by any chance, for instance, a sudden and unforeseen drop in Bitcoin’s price, the insurance fund would be utilized to pay traders whose positions had been unreasonably closed at a loss.
Around 5% of non-FTX owned FTT tokens are likewise put aside in the unlikely event that the insurance fund runs out of money to pay clients. When underlying markets make enormous moves during unpredictability, the FTX insurance fund has been appeared to make a net gain.
The returns of these gains are divided among FTT token holders, also known as ‘Socialized Gains,’ adding another layer of utility to the FTT token.
FTX crypto exchange advantages and disadvantages
Advantages
- Low fees
- You don’t need KYC to trade on this platform, but it can increase your limits.
- FTX allows you to buy cryptocurrency using a credit card using simplex.
- It is specialized in derivatives trading.
- FTX guarantees liquidity.
Disadvantages
- The leveraged tokens are risky.
- It is a relatively new platform.
Frequently Asked Questions
- What are FTX leveraged tokens?
FTX leveraged tokens provide you leveraged exposure to the cryptocurrency market without managing a leveraged position. FTX provides 45 different leverage tokens.
- What is the FTT token?
FTT is the native token of FTX Exchange. It gives certain perks to the users such as low trading fees, gains from FTX insurance fund, etc.
- Is FTX regulated?
Yes, FTX is regulated and its US entity is already registered as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN) and is currently in the process of gaining money transmitter licenses (MTL) from several states.
- Is FTX exchange legit and safe?
Yes, the FTX crypto exchange is legit and safe (As like other centralized exchanges). It has an experienced team and reputable backers.
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