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When choosing a derivatives exchange, make sure that you’ve considered all the features and the underlying fees.
Derivatives are an important investment class in any financial market, whether forex, stocks, or cryptocurrencies. Getting started with derivatives trading means that you’ll be entering into a financial contract with another party (the service provider) to speculate the prices of a particular asset in the future.
Since derivatives trading is pretty new to the crypto market, there aren’t many exchanges that offer this feature. So, we did the necessary research to build a list of the most trusted and widely used crypto derivatives exchanges in today’s market.
Binance has established itself as the most preferred exchange for spot trading, futures trading, derivatives trading, staking, and many other investment options. It is ranked among the largest exchanges and features a global presence.
Compared to most platforms, Binance has a straightforward fee structure for derivatives trading. The platform doesn’t charge any fee on deposits. At the same time, the trading fee usually varies between 0.01% to 0.05% of the total transaction value. This fee can be further reduced if you use the native BNB token.
Derivatives trading products from Binance include:
- USD-Margined Futures Contracts – Perpetual and quarterly contracts settled in USDT or BUSD.
- COIN-M Futures – Perpetual and quarterly contracts paid out in cryptocurrencies.
- Binance Leveraged Tokens – This derivatives trading feature allows users to benefit from increased leverage without liquidation risks. With leveraged tokens, you can get increased exposure to specific cryptocurrencies.
- Binance Options – These European-style “vanilla” options allow users to choose between maximizing returns or limiting losses.
Bybit is another prominent crypto exchange focused on offering the best-in-class derivatives products. It is the only derivatives exchange where you can trade with as high as 100x leverage on specific cryptocurrencies. In addition, Bybit also offers “quarterly futures contracts.” The platform’s trading fee is conservative, and it charges a mere 0.075% per order when you’re trading contracts.
Derivatives trading products on Bybit include:
- USDT Perpetual – Perpetual contracts that use USDT as collateral.
- Inverse Perpetual – Perpetual contracts whereby the underlying assets are used as the collateral. Inverse perpetual contract pairs include BTC/USD, ETH/USD, DOT/USD, EOS/USD, and XRP/USD.
- Inverse Futures – Futures contracts where the coin (BTC and ETH) are used as collateral.
KuCoin recently expanded into the derivatives market via its newly-launched KuMEX Derivatives Trading Platform. The platform serves as a global cryptocurrency exchange, serving over 6 million users in more than 200 countries.
Both perpetual and delivery contracts on KuCoin include maker and taker fees, but there’s a slight difference in how the platform charges the fee. For perpetual and delivery contracts, KuCoin assesses a 0.06% taker fee and 0.02% maker fee. However, the funding rate differs for USDT-margined or COIN-margined contracts under perpetual contracts, and there is no settlement fee. On the contrary, there is no funding rate for delivery contracts but a 0.025% settlement fee.
Derivatives trading products on KuCoin include:
- USDT-Margined Contract – Perpetual and quarterly contracts settled in USDT.
- COIN-Margined Contract – Perpetual and quarterly contracts paid out in cryptocurrencies.
Kraken is ranked amongst the most reliable and secure crypto exchanges. However, compared to the other exchanges on this list, Kraken offers a limited number of futures trading options covering BTC, ETH, LTC, BCH, and XRP. The platform also allows you to enter margin trading with up to 5x leverage.
Kraken’s fees are low, but you’ll pay for every sell, buy, and trade action you perform on the platform. Plus, there is a deposit and withdrawal fee as well. The maker fee ranges between 0% to 0.20% and the taker fee ranges between 0.10% and 0.50% depending on your 30-day USD trading volume.
Derivatives trading products on Kraken include:
- Perpetual Contracts – Kraken offers perpetual trading for BTC, ETH, LTC, BCH, and XRP. Currently, it only supports USD but will soon start accepting AUD as well.
One of the largest exchanges in the Asia-Pacific region, AAX, offers a myriad of crypto-related services. The platform offers futures contracts with up to 100x leverage and no expiry limit. Besides, it is the only cryptocurrency exchange powered by LSEG technology used by the Oslo stock exchange, Borsa Italiana, and London stock exchange.
For trading and withdrawals, AAX has a very transparent and easily accessible fee schedule. The platform charges maker and taker fees on all futures trading options, ranging between 0.02% and 0.04%. If you pay the fees using the platform’s native AAB token, you can lower the fees by 20%.
Derivatives trading products on AAX include:
- BTC-Settled Inverse Contract – Perpetual and quarterly contracts settled in BTC.
- USDT-Settled Vanilla Contract – European-style “vanilla” options trading settled in USDT. AAX currently offers USDT-settled contracts for BTC, ETH, SOL, ADA, XRP, DOGE, BCH, SHIB, LINK, MATIC, COMP, and DYDX.
When choosing a derivatives exchange, make sure that you’ve considered all the features and the underlying fees. Finally, before diving into futures trading, take some time to learn about the risks involved, so you don’t end up losing more than you can afford.