Deribit Using New Trading Tools to Capture 'Exploding' Options Market

Amid increasing activity within the crypto derivatives market, software maker Trading Technologies (TT) announced Wednesday it would provide trading tools to users of leading crypto exchange, Deribit.

Included in the suite are advanced order types, charting and analytics as well as access to a feature allowing users to create algorithms for bot trading.

TT users eligible to trade on Deribit will be able to access all listed products, including bitcoin (BTC) and ether (ETH) futures, perpetual and options contracts. Dutch-based (for another month) Deribit, founded in 2016, is now the fifth crypto-only exchange that TT supports, alongside BitMEX, CoinFLEX, Coinbase and Bakkt.

TT’s vice president of cryptocurrencies, Michael Unetich, said demand for crypto derivatives was strong in regions such as the U.S., Asia and Europe.

"We hope to provide trading access to the highest volume derivatives exchanges in the world. CME is one leading derivatives venue, while others are located in Asia," Unetich said.

Trading Technologies creates professional trading software, infrastructure and data solutions for a wide variety of users including proprietary traders, brokers, money managers, chartered tax advisors (CTAs), hedge funds, commercial hedgers and risk managers. Traditional financial institutions like Goldman Sachs, stock exchanges like the Johannesburg Stock Exchange and Europe’s largest derivatives exchange Eurex also use the 25-year-old firm’s tools.

Exploding options market

Jehan Chu, co-founder and managing partner of Kenetic, a Hong Kong-based blockchain investment and trading firm, said TT’s connection to Deribit was a “massive show of confidence” for the “exploding” options market.

“TT’s long-credible history and impressive user base combined with Deribit’s experience as one of the first crypto options platform is an exciting match that should significantly increase volumes over time,” Chu said.

Commenting on the Asia-Pacific region for retail investors, Chu said the TT and Deribit partnership would “expand the options markets for Asian traders through a familiar and trusted platform.”

Indeed, the BTC options market saw a large amount of activity on January 14, according to data provider Skew, with Deribit outstripping the competition to reach the highest amount of options traded in nearly two months. That activity has since cooled while the spot price of BTC is currently changing hands for $8,722, CoinDesk BPI data show.

Su Zhu, co-founder at Singapore-based crypto investment firm Three Arrows Capital, told CoinDesk the new options exchanges such as OKEx, CME and Bakkt are driving more volume to Deribit as the central primary liquidity venue for options.

“This month is shaping up to be the largest volume month ever for options,” Zhu said.