Deribit Review & Margin Trading FAQ (2024)

What is Deribit?

Deribit is a Bitcoin derivatives trading platform. The purpose behind the creation of Derbit is to offer a Bitcoin options business platform that allows traders to gain experience in a liquid market, placing orders as it would in any derivatives market.

Who owns Deribit?

John Jansen is recognized as the original founder of Deribit and maintains his position as CEO of the company. However, the company would emerge from Jansen’s collaboration with co-founders Marius Jansen and Sebastian Smyczýnski.

Where is Deribit located?

Deribit is a Dutch futures trading platform and is therefore located in Ermelo, the Netherlands. Those who want to visit their main office can stop by Stationsstraat.

When was Deribit founded?

Deribit was created in 2016, being one year older than Binance. In fact, it is considered one of the first and most successful Bitcoin futures platforms.

Who regulates Deribit?

Because the competent authorities have not seen the need to limit financial activities with the Deribit market, the platform remains unregulated and free to offer its services wherever it wants.

Where is Deribit banned?

Deribit is not illegal in any country in the world, but the platform has restricted its services in some countries. This means that you will not be able to trade with Deribit if you are a citizen of: Canada (province Quebec), Guam, Iran, Iraq, Japan, Democratic People’s Republic of Korea, Panama, Puerto Rico, Samoa, Sudan, Syrian Arab Republic, United States, and Virgin Islands (US).

Why is Deribit banned in the USA?

American residents cannot use Deribit’s trading services due to regulatory disagreements between the exchange and the competent authorities of the United States. For this reason, the trading platform has decided to limit its experience in that country.

How to use Deribit in the USA?

Deribit is a Bitcoin margin broker that doesn’t ask for ID verification by default. But they need to make sure that they don’t have any US traders secretly trading on their platform. If you want to keep an unverified account, you need to make sure not to access Deribit from the USA (meaning with a US IP address). This can be avoided by making use of a virtual private network service. VPNs allow you to technically hide your true IP and instead let it look like as if you’re located in another country. VPN services offer a choice of different countries, so you can choose an IP where Bitcoin margin trading is allowed and nobody will asked any questions. This is how you can still use your Deribit account when traveling to the US.

What countries does Deribit allow?

All citizens who do not belong to the previously mentioned countries (whose IP addresses are blocked from Deribit) will be able to use the platform and enjoy their trading options. The company has specified not to provide services only in such nations.

What can you trade with Deribit?

Deribit offers BTC perpetual contracts, BTC future contracts, Ethereum perpetual/future contracts and BTC/ETH options. There are fees for every trading product, as well as for withdrawing funds out of the platform.

How many users does Deribit have?

The Deribit community is formed by thousands of users around the world, although the platform has not yet specified how much in detail. Together, member move close to $500 million in trading volume everyday.

How does Deribit make money?

Deribit receives money from all trades and transactions within the platform. In return for their trading options and funding rates, they take out a commission from every movement.

How to sign up to Deribit?

Go to Deribit’s official website (Deribit.com) and click on “Create account”. You will have to enter your email address (which will be confirmed through a confirmation email) and a secure password. Once you’re done, you will be able to log in your Deribit account and start trading Bitcoin derivatives.

How to use Deribit with vpn?

Since Deribit blocks the IP from some countries, some users have to join a Virtual Private Network (VPN) in order to enjoy the platform’s trading services, although they will have to sign up for a new account once the VPN is activated.

What does btc-perpetual mean on Deribit?

Deribit users can trade with Bitcoin perpetual contracts, which are very similar to traditional future contracts but do not have an expiration date. Perpetual contracts price have to be as close as they can be from the actual Bitcoin price (in the case of Bitcoin perpetuals).

Bitmex vs Deribit – What’s the difference?

BitMex offers Bitcoin Perpetual Swap Contracts, future contracts for BCH/ETH/EOS/TRX/XRP/ADA/LTC and 4 bitcoin futures, while Deribit only offers BTC Perpetual Swap Contracts. BitMEX stores all their assets in cold wallets so that hackers won’t have access to them. However, Deribit keeps a tiny 1% of all assets in a hot wallet.

Deribit vs Kraken – What’s the difference?

Kraken works as a cryptocurrency exchange market where users can actually trade with these tokens, while Deribit only works as a Bitcoin derivatives trading platform. Being a Futures platform, Deribit offers a higher leverage (100x) than Kraken (5x).

What’s the minimum stake for trading on Deribit?

Deribit only requires a 1% of initial margin while letting you trade with 100x leverage. On Deribit, contracts are worth 10 USD, so make sure you calculate your investment before placing an order.

How to calculate returns on leverage on Deribit?

Let’s say we have 0.1 BTC and are going to place an order with 100x leverage. You would have a trading power of 10 BTC, which means that if price moves up 0.05% you would be getting a profit of 5% over the contracts price. Profits are calculated from the total trading power in the order.

Why is my cash balance lower than equity on Deribit?

Your equity reflects a live calculation of your profit and/or loss, so considering your equity includes both open and closed positions, it might be under your “cash” balance.

What is cross margin on Deribit?

Deribit uses cross margin for all accounts. The cross margin consists on taking all funds and make them part of the available margin to hold a position.

What das PLN stand for in Deribit?

PNL stands for realised profit or loss and unrealised profit or loss, which is how much is that percentage you earn or loss during an order. It is called unrealised PNL while the order is open and Realised PNL once it closes.

How to deposit btc into Deribit?

Copy the BTC address in your Deribit wallet and paste it in the address bar when making the transaction from another wallet. Specify the amount and your funds will arrive in your Deribit account within an hour.

How to deposit USD into Deribit?

Deribit does not accept fiat currency deposits, only Bitcoin. However, you can always exchange USD for BTC and fund your account.

How do traders cash out on Deribit?

You cannot exactly cash out your money in fiat currency from the platform, but you can withdraw the funds and send them to a P2P exchange (such as LocalBitcoins or Binance) and get the currency you want.

How does Deribit trading work?

Trades are carried out with future contracts, worth 10 USD each. You will set the order by specifying the amount of contracts you want to buy or sell. The idea is to buy cheap contracts and sell them above your entry price to obtain profits. In case the price is going down, you can place a short order as it will make you earn money as well.

How to buy and sell Bitcoin in Deribit?

Users can’t exactly buy Bitcoin, but Bitcoin Perpetual and future contracts, which are only digital trading products and cannot be deposited or withdrawn as cryptocurrency tokens.

How to long bitcoin on Deribit?

In the trading section you will have to choose what type of order you want to place and whether if it is a long or short position. Choose the one that goes along with your market analysis.

How to short bitcoin on Deribit?

Alongside the “Long” option there is the “Short” option, which can give you profits if the contract’s price starts going down. It basically allows you to be in the other side of the negotiation and sell these contracts at a higher price.

How does Deribit calculate profit?

When trading futures in Deribit, each contract is worth $10. Let’s suppose you buy 200 contracts and you go long $2000. If BTC price is at $10.000, this would be equivalent to 0.2 BTC. Once your target price is achieved ($10.500, for example)

What is Deribit liquidation?

When Deribit users place leveraged orders and the price starts turning against them, their margin funds will be taken to pay for the borrowed funds they just lost during a bad trade. Liquidation happens when margin funds are depleted the platform closes the order.

What is the meaning of size in Deribit btc options?

“Size” directly refers to how much BTC is being covered by the contract we’re trading. In other words, the BTC equivalent to the contract’s worth.

What time do Deribit options close?

All options have an expiry date that, once it’s reached, the contract will be cancelled. In Deribit, all available options are European style, which means that they are exercised only at expiry.

How to trade futures on Deribit?

In order to trade futures in Deribit you will have to buy (long) or sell (short) Bitcoin future contracts at a settled price. Specify the type of order you’re about to place, which will totally depend on your strategy. You can see your earnings and positions in the “Manage Future Positions” bar.

What currencies are supported on Deribit?

Deribit only accepts deposits and withdrawals in Bitcoin (withdrawals also allow ETH) and. Non fiat currencies nor other cryptocurrencies are supported.

How to set a stop-loss on a long on Deribit?

Set your stop loss by selecting “Stop limit” in your order, where you are going to specify the Trigger Price and the Stop price. If the price turns against our trade, the Stop Price will be triggered and minimize losses.

What is the withdraw limit in Deribit?

Deribit Level 1 users can only withdraw up to 1 BTC/50 ETH per day, while Level 2 users will not have any specified limits for withdrawing funds.

What leverage should you use on Deribit?

Traders are recommended to set a leverage that fits their risk management. Placing a 100x leverage order can give you more profits than 10x leverage, but it can also maximize your loss.

How to sell portion of contract on Deribit?

Traders cannot trade fractions of contracts, but they can decide how much they will spend by specifying how many contracts they are going to buy or sell.

How long can you hold a position on Deribit?

A position will remain open depending on what product we are trading. For futures, they have an expiration date, so keeping an order open until then would automatically close it. Also, it is not profitable either if we consider the transaction fees.

When you leverage on Deribit can you lose more than your investment?

No. Assuming you use 10x leverage, it means that every time the price moves 1% you will either earn 10% or loose 10%. Even if you burn your account during a trade, your order will be closed when your margin funds run out to keep the platform from losing money.

How to close your Deribit positions?

The orders will be closed upon reaching the Take Profit or our Stop Price (used as a stop loss), although we can close our position in the “open orders” bar. Everything will depend on how much we are risking or winning.