How to Choose a Cryptocurrency Derivatives Exchange You Can Trust
The top cryptocurrency spot exchanges supporting derivatives trading often suffer from network congestion and slow transaction speed. As an alternative, traders can choose a crypto derivatives focused exchange for trading crypto futures to ensure they never lose out on a good trading opportunity.
Trading cryptocurrency derivatives have become quite the rage now because they give people a chance to make profits off the price fluctuation of cryptocurrencies without having to hold these cryptocurrencies for real. With spot trading, you can either buy or sell a real cryptocurrency with immediate effect. So, you can’t use the spot market to hedge your position, and this is where crypto derivatives gain an upper hand.
Cryptocurrency derivatives are realised in terms of contracts which you can buy or sell depending on what you assume the price of the crypto asset would be in the future. This is how you can hedge your position against market volatility by avoiding holding the actual crypto asset.
A lot of cryptocurrency exchanges that started out originally as spot exchanges have modified their trading area to accommodate derivatives trading. These are some of the top cryptocurrency exchanges by the way, but these exchanges fail to provide the same degree of security and accessibility to their derivatives traders. The industry is in need of dedicated crypto derivatives exchanges that focus on constantly improving services around derivatives trading as it is fundamentally different from spot trading.
Security and trust are paramount to any exchange, be it derivatives or spot, and we all know how most cryptocurrency exchanges, even the big ones, are prone to cyber attacks. So how would you know the trading platform you are about to choose is the safest crypto exchange out there? Well, there are some factors to consider before understanding the safety and utility of a crypto derivatives exchange. Here’s what we think you should be looking into.
Security and Asset Protection
Some of the standard security features of the top crypto exchanges include 2FA authentication and KYC submission. But, that’s not enough. A crypto derivative exchange should offer additional features like storage in cold wallets that are more secure than exchange hot wallets. It is also important to read the exchange’s policies and find out if it offers traders additional protection in the form of insurance funds in the event of counter-party losses which is common to crypto derivatives trading.
An active trader needs to be aware of transaction cost as it is a significant part of derivatives trading. It’s a good idea to compare the fee structure across the top crypto derivatives exchanges to make sure you have a good deal. Two types of fees that exchanges charge are the taker fees and the maker fees.
The former represents a market order that is executed immediately, and the latter represents a limit order that you specify and is executed only when the market price matches your limit order. Taker fees are more expensive than maker fees. So, go for a crypto derivatives exchange that offers competitive rates and also plugs in bonuses and rewards in its services to incentivise traders from time to time.
Rewards and Bonuses
Almost all the top crypto exchanges dabble with bonuses, rewards and such and we all know the more the better. This is especially true in the case of crypto derivatives trading as rewards and bonuses can act as good buffers to offset the losses you may suffer at times. Plus derivatives trading involves a few expenses like margin, funding rate (may or may not apply while trading perpetual contracts) and collateral. A crypto derivatives focused exchange would usually curate their rewards and bonuses to assist their users trading journey. Before choosing an exchange, find out how you will benefit from platform rewards, bonuses, rebates, discounted commissions etc.
Leverage is a feature unique to crypto derivatives trading where traders borrow capital from an exchange to enlarge their positions in the hopes of increasing profits from crypto price fluctuations. For example, if you think Bitcoin price is about to go up, you can add a leverage of, let’s say, 50x and increase your contract size by 50 times. If Bitcoin price does go up you make profit exponentially.
It is, however, important to understand that leverage trading is risky and you must implement the accurate risk-management strategies to avoid liquidation. In these scenarios insurance funds may come to your rescue. So, choose a crypto derivatives exchange with insurance funds which you can use to cushion your position for some time or protect it from getting de-leveraged.
Slow transaction speed is a persistent challenge among even the top cryptocurrency exchanges. The worst part is these exchanges slow down during high traffic leading to active investors losing out on good trading opportunities. During periods of volatility, some exchanges block traders from selling their assets. These are some of the problems core to the crypto spot exchanges. However, these exchanges also support crypto derivatives trading and an overall downtime affects all trading areas. Therefore, it is a good idea to choose a dedicated crypto derivatives exchange supporting higher transaction speed.
Why Should You Consider C-trade To Be Your Derivatives Trading Partner
C-trade is a crypto derivatives trading platform with features like a cold wallet storage facility for traders’ assets. It’s an exchange that processes up to 10 million transactions per second and supports the world’s most popular crypto derivatives products. Some of the features that make C-trade an ideal platform for crypto derivatives trading are its -
Top notch security features
In order to keep your assets safe, almost all of C-trade’s customer’s deposits are stored in multi-signature cold wallets. C-Trade always keeps the hot wallets topped up in order to be able to provide lightning fast withdrawals thus making it one of the safest cryptocurrency derivatives exchanges you can trust.
The industry average for taker and maker fees are 0.063% and 0.018% respectively. C-Trade charges 0.075% taker fees and 0.025% maker fees per order. Though these fees seem a bit higher than the industry standards, the exchange makes up for it with its low withdrawal fees at 0.0005 BTC per withdrawal. The withdrawal fees go to the Bitcoin miner who facilitates the transaction. Thus we can say C-trade offers competitive fees to its users.
Rewards and Bonuses
C-trade offers up to $200 in welcome bonus and coupon. To enjoy referral bonuses, share your referral code and invite your friends to C-Trade. For every invitee registered who makes an initial deposit of ≥ 0.02 BTC, you can earn a $15 bonus. In addition you can also sign up to C-trade’s affiliate program which has the following features:
- Highest commission payouts up to 40% commission of your referrals’ trading fees.
- Technical support to reach your influence with responsive on-one-on support.
- Trading fee discount of 15% for the first three months for your referrals to enjoy.
C-Trade’s Insurance fund helps protect users from counter-party losses and prevent auto-deleveraging in traders’ positions. When necessary, the fund is used to take on unfilled liquidation orders before they are taken over by the auto-deleveraging system. The Insurance fund at C-Trade grows from liquidations executed at a price better than the bankruptcy price.
Other distinguishing features of C-trade includes a 150x leverage on crypto perpetual contracts which is higher than the industry average. It also utilises a machine learning system that monitors market manipulation, and there is the high transaction speed of 10 million transactions per second.
There are many cryptocurrency exchanges in the market these days that offer derivatives trading as an additional service. However, it is a better idea to go with a dedicated crypto derivatives exchange to enjoy faster transaction speed. Dedicated platforms like C-trade protects its traders from overload problems, thereby, allowing them to take advantage of market opportunities more efficiently.
These platforms also curate their rewards and bonus programs according to the requirements of derivatives trading. C-trade is not just one of them but also the safest crypto exchange. So, what are you waiting for? Why not join today and get all-time access to C-trade’s ongoing trading contests by following their Twitter handle.