Being a successful graduate of Belarusian State Economic University (BSEU), Maria has acquired competencies in economic and social studies. Given Maria’s previous research working experience, and desire to explore what's really shaping the future, the main research focus is placed on FinTech and Blockchain Technology.
In this piece, we will compare trading of cryptocurrency derivatives on OKex and Bybit, examine the differentiating features they offer, and analyze the advantages you can expect from both of them.
Cryptocurrencies are an emerging asset class that are literarily giving traditional assets such as stocks, precious, metals, and bonds a run for their money. In the first six months of 2019, the NYSE Bitcoin Index gained a massive 216% to dwarf the 20.66% and 17.35% gains recorded in the NASDAQ Composite Index and S&P 500 Index respectively. Vanguard Real Estate ETF gained 17% and Gold prices only managed to gain 10.16% in the same period.
For cryptocurrency traders, the speculative element, the FUD and FOMO dynamics that drives volatility provide lots of opportunity to profit when the market is trading up, down, or sideways. Interestingly, some traders go further to increase their magnitude of profit from the volatility by taking advantage of derivative tools such as margin trading, cryptocurrency options, futures, and perpetual futures.
OKex and Bybit are two of the leading cryptocurrency exchanges facilitating the trading of crypto derivatives in the market. OKEx is older, having been established as a Malta-based cryptocurrency exchange in 2014. Its headquarters is in Valletta, Malta. Bybit is relatively younger and nimbler; having been registered in 2018 in the BVI. Bybit’s headquarter is in Singapore and it has offices in Hong Kong and Taiwan.
In this piece, we will compare what it feels like to trade cryptocurrency derivatives on either OKex or Bybit, we will attempt to examine the differentiating features they offer, what are the advantages can you expect, and we will try to help you find the one that is right for you.
OKex vs Bybit Comparison
Bybit offers traders a large selection of order types such as Limit orders, Market orders, Conditional orders, TP/SL setting with Entry Order and TS as a Closing Strategy order. On OKex, you’ll only be able to place Limit Orders, Market Orders, Conditioned Orders and Trailing Stop orders. Hence, if order types are an important feature to you, you’ll be better off with Bybit than OKex.
In terms of Contract types, OKex already offers Futures Contracts and Perpetual Contracts. Bybit currently only has Perpetual contracts but it has confirmed that it is developing additional contract types that it will soon unveil. OKex obviously offer more contract type to traders.
Liquidation, also known as margin call, is a dreaded mechanism that closes a trader’s position when there a loss of all or almost all of the trader’s margin.
OKex uses forced-liquidation mechanism that is triggered when a trader’s margin falls below the forced-liquidation baseline. Traders with higher leverages can expect to have a higher risk of forced liquidation than traders with lower margins.
Bybit uses a partial liquidation mechanism and a total liquidation mechanism. Partial liquidations close a position partially to reduce the leverage of the trader when the trades have gone against them. Total liquidations are only triggered when close a position when all or nearly all the trader’s margin has been used.
Dual Price Mechanism
Dual price mechanism is often used in crypto derivatives trading to prevent a large deviation from the Last Traded Price of a cryptocurrency because of lack of liquidity or outright market manipulation. Market manipulation could trigger unnecessary liquidation of high leverage positions by triggering liquidation procedures. Bybit uses a Dual Price Mechanism that combines the Mark Price & Last Traded Price. However, there’s no record suggesting that OKex utilities a dual price mechanism to protect traders from unnecessary liquidation.
Cryptocurrency exchanges use trading matching engine software to match sell orders, bids, asks, and buy orders to facilitate trading. It is perhaps the most important component of an exchange and its capability directly determines how robust an exchange is to facilitate trades especially during peak trading times.
OKex operates at a first come, first-serve basis such that orders are executed in price-time priority on a first-in, first-out basis. In contrast, Bybit has a versatile matching engine with capabilities to manage 100,000 TPS per contract without experiencing system overload. If speed and guaranteed order execution is important to you, it might be smarter to pitch your tent with Bybit.
Bybit offers a 24/7 multilingual online customer service to provide solutions for users in a timely manner and everything in the service experience is designed to ensure that users enjoy a fair, transparent and efficient trading environment. OKex only has a 24/7 English service as well as online chat and a ticket-based support system.
The User interface and User experience on a cryptocurrency exchange can make or mar your trading experience, and the importance of an intuitive UI can’t be overemphasized in high stakes of crypto derivatives. From a beginner standpoint, Bybit has the better UI and UX experience that eases you into the world of trading crypto derivatives. Bybit has an FAQ and an official knowledgebase that enhances the quality of trader education on its platform.
The fact that OXex doesn’t have an FAQ is demotivating factor that makes it incredibly difficult for newbies to understand many of the terminologies.
However, OKex does try to ensure that only experienced traders take part in leveraged trading by requesting that traders take and pass a quiz before they can access margin trading. Nonetheless, gatekeeping without trader education is not a good enough solution for the onward development of the cryptocurrency industry.
The Bottom Line
Its impossible to make a blanket verdict on which cryptocurrency exchange offers the best trading experience because different traders have different needs and expectations. However, from the foregoing, OKex seems to be ahead in terms of experience and market depth.
If trade fees are important to you, Bybit offers the cheaper value for money and its negative maker fee suggests that you’ll even earn additional money just for placing your trades. Its practically impossible for find a trader that is not concerned about trading fees; hence, Bybit is the clear winner here.