FTX Exchange ($FTT Token) is a leveraged cryptocurrency trading platform offering derivatives trading. The key advantage of FTX is that it built by professional traders “Alameda research” – a quant trading firm that is responsible for 30% of the market trading volume on major exchanges. FTX offers innovative products not found on other exchanges such as MOVE indices that track the volatility of cryptocurrencies and 3XBULL tokens which are long positions represented by ERC-20 tokens. In this review, we’ll explain the products on offer and how to use FTX exchange. In addition, we’ll look at the platform safety measures such as liquidation & claw back protection. Finally we’ll look at the FTX trading fees and trading discounts (such as the $FTT native platform token).
FTX Leveraged Trading Platform
The core trading product offered by FTX is cryptocurrency derivatives trading. Derivatives are financial tools that derive value from the underlying product – in this case cryptocurrencies such as Bitcoin. FTX exchange trades contracts based on the underlying asset instead of the asset themselves – this allows higher leveraged and more types of products. Derivative products are by institutions, companies, miners and traders to gain advantage of market conditions. For example, Bitcoin miners who is know they will receive Bitcoin in the future may choose to short Bitcoin at current prices to protect themselves from future price volatility.
Derivative products allows traders to speculate on the future value of various digital assets and trade their corresponding futures. This is different from regular trading as there are “shorting” options where traders benefit from an asset falling in price (without initially owning the asset). Traders can also take averaged positions where they can drastically increase their exposure to an asset with 5, 10 or even 50x leverage.
Types of Derivatives Products on FTX:
- Futures – Futures is a type of standardized forward contract, a legal agreement to buy or sell an asset at a predetermined price.
- Options – Options are a special form of futures contract that gives the holder the right but not the obligation to sell at a future strike price. These are common used to protect against price volatility.
- Move – These are contracts that settle in the absolute change in the price of a coin over time. Time periods can be daily, weekly or quarterly.
- Spot – Spot trades are market matched orders for an asset
- Leveraged Tokens – are special tokens that represents a short or long position
Is FTX exchange secure?
FTX is an exchange developed by “traders for traders”. The team behind FTX, Alameda research has been trading extensively and market making on various exchanges. So far FTX has an excellent security record. This gives Blockchain.com a strong reputation and presence in the industry.
Trading Politics on FTX
FTX also allows trade of political futures – notably the TRUMP 2020 election results. The futures work by yielding $1 if Trump wins, and $0 if Trump loses. This gives traders the options to buy tokens if they are speculating that Trump wins the election. This type of trading is similar to the idea of a prediction markets, such as the ones designed by AUGUR. Prediction markets work by soliciting the mass markets to predict the outcomes of key results.
Review Score: 4.5/5
FTX has the largest range of cryptocurrency derivatives products. This exchange is designed for professional traders in mind – with key of providing powerful – albeit – easy to misuse tools.