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).
History of FTX Exchange
FTX is a relative newcomer, having only launched in 2019 by Sam Bankman-Fried and Gary Wang-their CEO and CTO respectively. However they do come from a strong background since they were established by Alameda Research, who themselves are professional and experienced traders on the cryptocurrency market since 2017. The Exchange is owned by FTX Trading Limited, a company incorporated in Antigua and Barbuda. However it its operations are based in Hong Kong.
Generally accepts your local currency
USD, TRY, AUD, GBP, EUR & HKD
Key Features and Functions
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 leverage 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 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
Special Feature: Trading Politics on FTX
FTX also allows trade of political futures – notably the 2020 presidential elections. he TRUMP-2020 (TRUMP) contract will expire to USD $1 if Donald Trump wins the 2020 US presidential election, or USD $0 otherwise. Similarly the other President 2020 contracts (i.e. those for the other presidential candidates) will settle to USD $1 if they win this years’ election and USD $0 if they do not. 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.
FTX Services and FTX Token (FTT) are not available to clients located or residing in the United States, Cuba, Crimea, Sevastopol, Iran, Syria, North Korea, Antigua or Barbuda.
Supported Cryptocurrencies and Payment Methods
The Exchange supports over 30 cryptocurrencies. A unique feature is that the Exchange also offers trading for several indices e.g. EXCH- comprised of several exchange tokens by using the weighted average of prices for BNB, HT, OKB and LEO.
The Exchange accepts payment in USD, TRY, AUD, GBP, EUR and HKD along with most other stablecoins. They also have their own OTC desk so traders can covert their cryptocurrencies to fiat currencies for withdrawals.
Deposit and Withdrawal Fees
The Exchange does not charge deposit or withdrawal fees. There are also no additional fees for OTC trading or converting in your Exchange wallet.
Maker and Taker fees are basically 0.02% and 0.07% respectively. However the Exchange offers discounts for higher volume traders and those participating in their referral program. They also have a VIP program for professional traders and a Backstop Liquidity Provider program for market makers. Notably, holders of the Exchange’s own FTT token are given discounts based on a user’s FTT holdings.
You can learn more about their fees and discounts here.
Is FTX Exchange safe in 2020?
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 FTX a strong reputation and presence in the industry. However whilst they do have an excellent security record, they are relative newcomers to this game, having only been around for a year or so. Hence without going through the test of time like other exchanges, we cannot say that it is definitively safe.
Binance delisted all FTX leveraged tokens on 31st March 2020 10:00 (UTC)
The announcement from Binance came on 28th March 2020. For those users that continued holding their tokens after delisting, Binance will be crediting those users’ accounts with the BUSD equivalent value as at the time of delisting within 14 days.
Conclusion: FTX Exchange Pros and Cons
- Developed by traders, for traders.
- Focused on derivatives products. A plus if that is what you are specifically interested in.
- Unique features, such as trading on political features and indices which some may find interesting.
- Competitive trading fees. And even provide further discounts for specific users.
- No record of hacks so far.
- Relatively new, only launched a year ago.
- Regional restrictions without providing alternatives for users from those jurisdictions.
Services offered: 4.5/5
Cryptocurrency support: 4.5/5
Review Score: 4.5/5
Sign up for FTX Exchange here:
Updated on 24th March 2020 with new sections on history, key features, supported countries, supported cryptocurrencies and payment methods, fees, security, pros and cons, and full breakdown of review scores.