How to earn with Deribit?

Crypto Exchange Deribit offers a limited number of types of earnings, only derivatives and complex products. Derivatives are a professional trader’s tool, in addition, crypto exchange Deribit has a complexly structured presentation of information, specific methods of calculating derivative parameters, the site deribit.com is not fully translated from English. This makes it difficult to work on the exchange, so the platform is more suitable for qualified traders with practical experience in trading derivatives.

Futures

The main way of earning on the Deribit site is futures trading. They do not involve trading cryptocurrencies, but transferring profit or loss at the crypto price for the last 30 minutes (expiration price), with the profit or loss being added to the user’s account, but you can use them after the expiration of the calculation. The marker price on Deribit is calculated by a complex formula using the EMA indicator. The settlement and contract delivery price is calculated as the average of Deribit indices for half an hour before the expiration.

Indexes BTC and ETHThe derivatives specifications are based on, calculated every 4 seconds as an average of the prices on Bitstamp exchanges, Bittrex, Coinbase, Gemini, Itbit, Kraken and LMAX Digital. The exchange offers bitcoin and etherium futures, and the terminal also activates derivatives Solana (SOL) and there is a buy and sell service for them, but the exchange does not describe the specifications for them.

Futures are settled every day at 8 a.m. UTC (11 MSC), with a close time of the last day of the month also at 8 UTC. The exchange also presents quarterly futures ending in March, June, September and December. As for the specifications, the underlying asset for BTC is the Deribit BTC index (1 index point equals 1 USD). The contract size is 10 USD, the maximum possible position is 1 million contracts (the equivalent of 10 million USD). There is a possibility of margin trading with up to 100x leverage. The base for ETH is the Ethereum exchange index, with 1 point of the index equal to 1 USD, as well as the contract size. The maximum bet is 10 million contracts ($10 million). Under the terms of margin trading, the leverage is 50x.

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Perpetual contracts

Perpetual contracts are essentially the same as futures, but they have no expiration date. Also differentiating an open-ended contract from other instruments is that the exchange keeps the price of the asset close to the value of its underlying cryptocurrency through “funding payments. If contract prices are higher than the index, the buyers pay the sellers financing, and vice versa, if prices are lower than the index, the sellers pay the buyers. The 8-hour perpetual contract financing rate is the combined percentage difference between the index and the marker price. This rate applies to all open positions.

Options trading

The Deribit platform offers European-style options trading, which means they are automatically exercised only at expiration or after, but not before. Profit is paid in cash when the option is exercised, not in other assets. The underlying assets are the Deribit indices of the cryptocurrency traded in the particular case. The current value of the option, the marker price, is calculated as the average of the best buy or sell value, the trading range is also calculated by the exchange. The minimum order is 0.1 option for Bitcoin and 1 contract for Ethereum.

The Exchange can adjust option prices or cancel trades if the value of a put option changes by more than 5% relative to the underlying value. For his part, the trader can request a check and correction of the value if it seems incorrect by sending a letter to support.

Block Trading

Block trading is not trading individual futures or options, but combinations of them. This is an even more complex way to make money on Deribit than standard derivatives trading. The minimum deal size on the block is 25 options for BTC or 250 ETH options contracts and for perpetual futures $200k. BTC and $100,000 for ETH. Transactions on combinations in the block can be made on the exchange itself, by request to the Telegram channel and via API.

Portfolio margining

Another comprehensive method of earning on the Deribit platform is portfolio marginization. Trading is carried out by combined positions of derivatives, and trading with a large leverage is possible. The trader must be experienced in real derivatives trading and have at least 0.25 BTC or 7.5 ETH on his account. The leverage available to trader is calculated in each case individually, on what parameters the exchange does not disclose.

Affiliate Program

The affiliate program is an additional way to make money on the exchange. If a trader has many subscribers in social networks, he can invite friends to the trading platform and receive a part of the trading commission from transactions, which will carry out the invited persons. The full list of conditions of work with referrals should be seen in the corresponding section of the exchange.