FTX Exchange Review: how to trade in 2020

FTX Exchange Review

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FTX exchange review

Founded in 2019, FTX cryptocurrency exchange has quickly made it to the top of the rankings. In this article, we will consider the features of trading on this exchange.

FTX is positioned primarily as a cryptocurrency derivatives exchange, where there are a variety of futures and perpetual contracts, options, Move contracts, index futures, such exotic things as bitcoin hashrate contracts or the results of the US presidential election. The exchange has BULL and BEAR tokens loved by many traders. And to a lesser extent, ordinary spot trading is represented.

And for those who like to trade instruments of traditional markets, the exchange has prepared contracts for gold and oil.

Registration

After entering your mail, password and setting a checkmark for agreeing to the terms, a confirmation letter will be sent to the mail, in which you need to follow the link.

Registration form on the FTX exchange

Next, you need to set up two-factor authentication in your account. An additional password for withdrawal of funds can be set at will.

Visit FTX

Verification

FTX has 4 verification levels starting from zero:

  • Level zero – available immediately after registration. It only requires registration on the exchange by e-mail. Allows you to withdraw up to 1000 USD per day in cryptocurrency equivalent.
  • Level 1 – requires you to specify your name and country of residence without sending any supporting documents. Increases the withdrawal limit to 2000 USD per day in cryptocurrency equivalent. If the trading volume exceeds 2000 USD, the limit automatically increases to 9000 USD per day.
  • Level 2 – requires passport data, selfies, and proof of residence. After passing, unlimited cryptocurrency withdrawals become available.
  • Level 3 – requires a Bank certificate from the account that you plan to Deposit or withdraw Fiat currency from. Gives unlimited withdrawals of Fiat currencies from the exchange’s OTC service.

Deposits and withdrawals

After registration, you can top up your balance with almost any coin or token traded on the exchange. Deposit with fiat currencies is available through the Simplex service or after passing the 3rd level of verification on the exchange’s own OTC service.

A nice feature of the FTX exchange is that there is no Commission for withdrawing funds. Regardless of the chosen cryptocurrency, whether it is Bitcoin, Ether or another, the Commission for withdrawal will be zero.

Who created the FTX?

The FTX exchange’s slogan is “Created by professional traders for traders”.

FTX was founded in 2018 by Sam Bankman-freed, who still remains its CEO. Before that, Sam worked as a trader in the ETF Department at the international company Jane Street. Partner in the creation of the exchange was Gary Wang, who previously worked as a programmer at Google, and now holds the position of technical Director of FTX.

Founder and CEO of FTX exchange Sam Bankman-Fried
Founder and CEO of FTX exchange Sam Bankman-Fried

In 2017, they founded Alameda Research Ltd, which is a leading provider of cryptocurrency trading liquidity for exchanges.

Almeda was involved in the development of FTX and the exchange successfully raised $ 8 million in three rounds of funding, after which several world-famous companies were among the investors of the exchange, including the Binance exchange.

FTX exchange is owned by FTX Trading LTD, which is registered in Antigua and Barbuda and has offices in Hong Kong.

FTX Fees

FTX has flat fees for all futures and spot pairs. Fees are reduced for holders of the FTT token on the internal wallet.

Fees excluding FTT:

FTX fees excluding FTT

Tier

30 D volume (USD)

Maker fees

Taker Fees

1

0

0.02%

0.07%

2

>1 m

0.02%

0.06%

3

>5 m

0.015%

0.055%

4

>10 m

0.015%

0.05%

5

>15 m

0.01%

0.045%

6

>35 m

0.01%

0.04%

Fee discounts for FTT token holders:

FTX fee discounts for FTT token holders

FTT holding

Discount on FTX fees

Discount on FTX OTC

Other privileges

$100

3%

N/A

N/A

$1,000

5%

N/A

N/A

$5,000

10%

0.0025%

N/A

$10,000

15%

0.0050%

N/A

$50,000

20%

0.0050%

N/A

$100,000

25%

0.0075%

N/A

$200,000

30%

0.0100%

N/A

$500,000

35%

0.0125%

N/A

$1,000,000

40%

0.0150%

Automatically become tier 4

$2,500,000

50%

0.0200%

Automatically become a VIP

$5,000,000

60%

0.0200%

Automatically become a VIP2

Using leverage of 50x increases trading fees by 0.02%, and 100x or higher trading fees increases by 0.03%, which is paid to the insurance fund.

Examples of fees calculation

Let’s say your commission discount level is 1.

Buy and sell by market order

You buy 1 Bitcoin at $ 10,000 with a market order (that is, you are a taker). You pay fee:

10000 * 0.07% = $ 7.

Bitcoin rises in price by 5% to the price of $ 10,500 and you sell it with a market order:

10,500 * 0.07% = $ 7.35.

Profit without fees is is $ 500, with fees is $ 485.65.

Buy-sell by limit order

You buy Bitcoin at $ 10,000 with a limit order (that is, you are a maker). You pay fee:

10000 * 0.02% = $ 2.

Bitcoin rises in price by 5% to $ 10,500 and you sell it with a limit order:

10500 * 0.02 = $ 2.1.

Profit without fees is $ 500, with fees is $ 495.9.

Buy and sell with leverage

An important feature of all futures exchanges is that the commission when using leverage increases in the same way as leverage. That is, if you buy or short with 10 leverage, then the commission will grow 10 times. This rule works for FTX as well as other futures exchanges (Bitmex, Binance Futures, Bybit and others).

You buy 1 Bitcoin at $ 10,000 with a market order with 10x leverage (that is, you are a taker). You pay commission:

10000 * 0.07% * 10 = $ 70.

Bitcoin rises in price by 5% to the price of $ 10,500 and you sell it with a market order:

10,500 * 0.07% = $ 73.5.

Profit without fees is $ 5,000, with fees is $ 4856.5.

Signing up to FTX using this link will give you a 5% discount on fees!

FTX Trading Products

The exchange interface is slightly different from that of other exchanges. Here, the coins are presented in the top scrolling menu instead of the right or left, which is a little unusual.

A wide variety of trading instruments are traded on FTX. Let’s take a look at the example of BTC what is offered for trading. To see all the available tools for a coin, you need to hover over it with the mouse:

Bitcoin on FTX

 

  • Futures – 1 perpetual contract (BTC-PERP) and 2 futures with an expiration date are available for trading
  • MOVE – volatility options
  • SPOT – pairs for simple spot trading
  • TOKENS – levereged tokens BULL, BEAR, BVOL, IBVOL and HALF credit tokens, each of which can be traded against USD or USDT.

Futures and perpetual contracts

FTX is mostly a derivatives exchange, so there are more perpetual contracts and futures than spot trading coins. These tools allow traders to enter long or short trades with or without leverage.

For perpetual contracts, funding is charged or debited once an hour, unlike other exchanges, where this happens once every 8 hours.

All futures are quarterly (3-month).

The maximum leverage is up to 101.

Coin indices

As many traders know, if cryptocurrencies grow, then almost everything grows in one way or another. If they fall, they also fall almost always together. Some are faster, some are slower. You can buy or short coins individually, or you can buy or short an index that includes a certain number of coins.

There are 7 indices on FTX, each with its own perpetual contract.

Altcoin Index

The Altcoin Index includes 7 coins from the top 10 rating: ETH, EOS, XRP, BCH, BSV, LTC and BNB.

The index is available for trading as ALT-PERP perpetual contract, quarterly futures and three credit tokens: ALTBULL / USD, ALTBEAR / USD and ALTHALF / USD.

Midcap Index

The Midcap Index is composed of mid-market coins and includes 24 coins:

XTZ OKB ADA LINK XMR XLM TRX HT LEO ETC DASH NEO CRO ATOM IOTA ZEC XEM ONT VET BAT DOGE ALGO QTUM DCR

The index is available for trading in the form of a perpetual contract MID-PERP, a quarterly futures and in the form of three credit tokens: MIDBULL / USD, MIDBEAR / USD, MIDHALF / USD.

DRGN Index

The DRGN Index consists of 9 popular Chinese coins: BTM, IOST, NEO, NULS, ONT, QTUM, TRX, VET and ARPA.

The index is available for trading as DRGN-PERP perpetual contract, quarterly futures, and three credit tokens: DRGNBULL / USD, DRGNBEAR / USD and DRGNHALF / USD.

Shitcoin Index

This index includes 50 coins with a low market capitalization. At the time of this writing, the following coins appear in it:

LSK ICX ZRX RVN BTG REP OMG BTM THETA HBAR BCD WAVES SC GT NANO KNC ENJ ZEN VSYS BTT CKB MCO DGB KMD HC BTS ZIL IOST XVG AION AE STEEM GNT MANA SNT CHZ XZC ARDR MATIC REN LRC NPXS ELF LOM GROW PUMP

Once every 30 days, other coins can be added and removed to this index.

The index is available for trading in the form of SHIT-PERP perpetual contract, quarterly futures and three credit tokens: BULLSHIT / USD, BEARSHIT / USD and HALFSHIT / USD.

DeFi Index

The DeFi Index consists of 11 popular DeFi sector coins: KNC, LEND, MKR, KAVA, ZRX, LRC, REN, REP, BNT, SNX, COMP.

The index is available for trading in the form of a perpetual contract DEFI-PERP, quarterly futures and five credit tokens: DEFIBULL / USD, DEFIBULL / USDT, DEFIBEAR / USD, DEFIBEAR / USDT, DEFIHALF / USD.

EXCH Index

EXCH is an index of exchange tokens. It includes exchange tokens:

  • BNB (Binance)
  • HT (Huobi)
  • OKB (Okex)
  • LEO (BitFinex)
  • GT (Gate.io)

The index is available for trading in the form of an EXCH-PERP perpetual contract, a quarterly futures and three credit tokens: EXCHBULL / USD, EXCHBEAR / USD, EXCHHALF / USD.

PRIV Index

The PRIV index is an index of private coins. It includes 9 coins with increased privacy: XMR, BEAM, DCR, GRIN, KMD, XVG, XZC, ZEC, ZEN.

The index is available for trading as a perpetual contract PRIV-PERP, quarterly futures and as three credit tokens: PRIVBULL / USD PRIVBEAR / USD PRIVHALF / USD.

Leveraged Tokens BULL and BEAR

Bull and Bear tokens are tokens with a leverage of 3. That is, when you buy a Bull token for any coin, you automatically buy it with a 3x leverage. Let’s take a closer look at the example.

Let’s say you bought Bitcoin at $ 10,000. Bitcoin has risen in price by 1% to $ 10,100. You sell Bitcoin and receive your $ 100 profit.

If instead of Bitcoin you bought a BULL token, the profit would be $ 300, that is, three times more, because the BULL token grows 3 times faster than the underlying asset (Bitcoin). And the BEAR token falls 3 times faster at this time.

  • If Bitcoin grows by 1%, then BULL token grows by 3%, and BEAR token falls by 3%.
  • If Bitcoin falls by 1%, then the BULL token falls by 3%, and the BEAR token rises by 3%.
  • BULL token chart rises when Bitcoin rises and falls when Bitcoin falls.
  • BEAR token chart rises when Bitcoin falls and falls when Bitcoin rises.

If you assume that Bitcoin will grow, then buy BULL token.
If you assume that Bitcoin will fall, then buy BEAR token.

On the left is a graph of Bitcoin, which is up 10%. On the right is the Bull graph, which at the same time grew by almost 30%
On the left is a graph of Bitcoin, which is up 10%. On the right is the Bull graph, which at the same time grew by almost 30%

This is similar to a short or long perpetual contract or a futures with 3x leverage. But there is a difference – Bull and Bear tokens are instruments of spot trading, these tokens can be imagined as some kind of coins that are just 3 times faster or cheaper than Bitcoin. Therefore, liquidation is impossible here as in the futures market. Also, there is no funding here as on perpetual contracts.

In addition to Bitcoin, BULL and BEAR tokens are available for ETHBULL-ETHBEAR, EOSBULL – EOSBEAR, XRPBULL – XRPBEAR and more than 50 coins from top to mid-range.

Above, you read a short description of tokens. But in reality, they have a very complex mathematical basis, depending on the behavior of the price of the base coin. If you are planning to use these tokens for long-term investment, then this is not a good idea. Example:

You bought $ 10,000 worth of Bull tokens at a bitcoin price of $ 10,000. And you decided to hold the tokens for a month. After a while, the price of bitcoin rose to $ 11,000, but by the end of the month it returned to $ 10,000. You sell your Bull tokens and find that you got back not $ 10,000, but only $ 9,700 despite the fact that Bitcoin returned to the price of $ 10,000.

Below in the screenshot you can see how the behavior of quotes on the Bull and Bear charts for Bitcoin differs. It would seem that the Bear chart should be an exact inverted copy of the Bull chart, but this is not so, the differences are visible to the naked eye:

how the behavior of quotes on the Bull and Bear charts for Bitcoin differs. It would seem that the Bear chart should be an exact inverted copy of the Bull chart, but this is not so, the differences are visible to the naked eye

The problem lies in the mathematical basis for calculating the price of these tokens and the rebalancing that occurs every day at 00-02 UTC. Tokens are well suited for intraday trading or for trading within a radius of several days. But nothing more, buying and holding them for a long time is not worth it. More details can be found in the FTX Help Center.

Despite the mathematical difficulties in calculating the price, if you look at the charts through the eyes of a trader, they are not much different from the charts of other coins – fibs, levels, technical analysis figures, and so on work well for them.

Conclusion

The FTX exchange leaves a very pleasant experience. The slogan “Created by professional traders for traders” works perfectly here. At the time of this writing, it was ranked 7th in the ranking of derivatives exchanges according to Coinmarketcap.

Pros of FTX:

  • High trading volumes
  • Availability of futures and perpetual contracts, which makes it possible to enter short and use leverage
  • A very developed order system that allows you to place both stop-loss and take-profit on open positions at the same time
  • Interesting trading tools in the form of the above-described indices and credit tokens.
  • Average commissions

Profitable trading for everyone!

Visit FTX

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