Home » FTX Review – Cryptocurrency Derivatives Exchange

FTX Review – Cryptocurrency Derivatives Exchange

pros

Pros

Positive aspects of the game
  • Low fees
  • Great customer service
  • Fiat support
  • Variety of trading products
  • Leverage of x20
cons

Cons

The disadvantages we highlight
  • Complicated trading products
  • Not available in the US

In order to try to restructure its failing business, FTX filed for Chapter 11 bankruptcy in the United States. A run on the exchange was caused by hints of financial instability, which caused the company—once one of the largest cryptocurrency trading platforms in the world—to stop customer withdrawals as of November 8, 2023.

FTX is a powerful cryptocurrency derivatives exchange that is built by the traders themselves for traders. They aim to make a platform strong enough for professional trading and also intuitive for new traders. 

FTX was founded by a top liquidity provider, Alameda Research. This is why the exchange had the best industry order books from the first day. It was co-founded by Gary wang and Bankman-Fried in 2018. Together their mission was to establish a leading platform that helps traders in their every trading need.

FTX

What do they offer:

FTX supports perpetual and quarterly futures for all main leveraged tokens, OTC, and cryptocurrencies. 

Currently, the exchange supports a variety of markets such as crypto futures, volatility, crypto spot, fiat (currencies), stock, prediction, and leveraged tokens. The platform aims to support both institutional and individual traders. FTX also offers an exclusive OTC service for traders interested in purchasing cryptocurrencies in bulk.

Futures:

FTX has perpetual and quarterly futures on more than a dozen famous cryptocurrencies such as ETH, DOGE, BTC, and BNB. FTX also has oil contracts that expire to the spot price of the WTI oil. Every coin has 3 futures:  a contract that expires in the first quarter, a contract that expires in the next quarter, and a contract that never expires (perpetual futures). FTX futures are stablecoin settled. You can get USD-based price exposure and settlement, that too without having a bank account. You can use your base currency as collateral for all your contracts.

Spot:

Spot trading is a process of selling and buying digital assets like Ethereuma and Bitcoin for immediate delivery. Cryptocurrencies are transferred directly among the market participants (sellers and buyers). You get direct ownership of cryptos and hold legal rights such as staking participation and voting.

Tokenized stocks:

It is a synthetic version of real stock, but as they are digital assets, you are able to sell and buy them from anywhere in the world.

Leveraged tokens:

These are the tokens with leveraged exposure and without taking care of requirements, liquidation risks, margin, and management. It is the simplest way to do leverage trading. They maintain variable and fixed leverage. FTX tokens have 3x leverage embedded. 

Volatility tokens:

They are ERC-20 tokens intended to track the implied volatility of the crypto markets. The volatility tokens of FTX get exposure to the implied volatility by using FTX MOVE contracts. 

Currently, there are 2 tokens: BVOL and IBVOL. BVOL tracks the daily returns of being 1x long of the BTC’s implied volatility. IBVOL tracks the daily returns of being 1x short of the BTC’s implied volatility.

MOVE contracts:

FTX also offers MOVE contracts which behave as futures that expire according to the real amount BTC moves in a certain time ( daily, weekly or monthly). 

It allows traders to trade at the amount bitcoin moves and profit disregarding the direction. 

Options:

Bitcoin options can also be traded with options contracts on the FTX. it works as “right to sell” and “right to buy” positions. Users can go short and long with leverage.

FTX options can be customized in a number of ways as traders can configure the expiration dates and strike prices as they like. 

Prediction:

It is an exchange-traded market designed to trade the outcome of the events. It trades on the prediction of what the crowd thinks of it.

Fiat:

This category allows traders to trade in international currencies like USD, EUR, and others. 

FTX Tutorial

How to Open an Account on FTX:

Opening an account at FTX is pretty simple as stated below:

  • Click on the “register” button on the home page of FTX. fill in your email and password there.
  • Click on the “sign up” for registering your account and get a confirmation email. 
  • Set up 2FA in the “account security” to secure your account.
  • You can now trade after deposit funds. Nonetheless, your account will have a withdrawal limit of $1000 till you get KYC verification. 
  • You can complete the KYC verification on the “SETTING” page to unlocks higher limits of withdrawal.

Ftx has different withdrawal limits according to the KYC requirements fulfilled:

  • You can withdraw 1000 USD for a lifetime if you only give your email and check for restricted jurisdictions.
  • You can withdraw 2000 USD daily and 9000 USD daily (if you do higher trades) by giving your email, country of residence, and name.
  • Get unlimited fiat and crypto withdrawals by providing full name, date of birth, address, full proof of address, passport, description of source assets, and facial verification.

FTX supported fiat currencies:

FTX supports 10 currencies such as AUD HKD, SGD,  CAD, CHF, BRL, USD, EUR, GBP, and ZAR. 

The FTT Token:

FTT token allows its users to take benefit that includes socialized gains from funds of insurance and lower trading fees. The team does buy-back weekly and burn token equal to :

  • 33% of all the fees generated from the FTX market
  • 10% addition to insurance funds
  • 5% fee earned from other users

FTT Staking:

It is an act of holding supported tokens in the hope to earn a reward for a period of time and at the same time adding to a tokens’ governance. 

It provides the following benefits:

  • Stakers can get a higher amount of referral fees
  • Staker can get maker fee rebates in addition to discounts
  • Get bonus votes in addition to standard votes
  • Stakers get a number of  ETH withdrawals and free ERC20 per day. 
  • Stakers get more SRM airdrops

Payment methods:

FTX accepts payments in the form of wire bank transfers, credit cards, and cryptocurrencies.

FTX leverage:

The exchange supports nearly 20x leverage. You can modify your leverage from the settings. Leverage is low for large positions at FTX.

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Is FTX safe?

FTX makes use of SSL encryption and puts 2FA on your user account to protect you from any malicious activity. They also have a backstop liquidity provider and unique liquidation engine system to handle margin calls and limit clawbacks. 

Additionally, traders are warned to monitor their accounts close to any open position that has a maintenance margin lower than 4.5%. It decreases risky trades and prevents losses. 

Their insurance funds help customers to make up for their losses in the event of any adverse market movement.

Overall, FTX seems to be a secure platform by considering its features and insurance plan to ease traders. 

Fees and costs:

FTX charges fees in the manner stated below:

Trading fees:

  • FTT stakers get maker rebates of -0.0030%. 
  • Spot trading fees are deducted in the currency you take. A buy order will be charged the fees in BTC while a sell order will give fees in USD. 
  • At 50x leverage, you will be charged 0.02% trading fees while at 100x leverage and more, you will be charged 0.03% trading fees which are paid to an insurance fund.  

Spot-margin borrow/lend fees:

  • Borrowers are charged fees on borrowing in addition to the interest. FTX charges 20% of the interest that is paid by the borrower to lenders.

Other fees

  • FTX charges no fees for future settlements. 
  • The leveraged tokens have redemption and creation fees of 0.10% and 0.03% daily management fees. 
  •  ETH-PERP and BTC-PERP do not incur extra fees for using higher leverage.
  • No fees for OTC trading or converting in the wallet. However, FTX charges 0.10% withdrawal fees on a withdrawal amount higher than your trading volume. 

Who is FTX best suited for?

Apparently, FTX is not a good platform for beginners because of the services and products it offers. Products such as leveraged tokens, MOVE contracts, Bitcoin options, and perpetual swaps take time to understand and it is not easy for beginners.

Derivative trading is more complex than spot trading. Leverage trading can sometimes result in huge losses and the complicated nature of products make them perfect for experienced traders. 

However, the team FTX provides a variety of resources to help its users and teach them trading skills. It includes a help center that helps users to cover key areas, a blog that has guiding articles, and a youtube channel. 

Conclusion:

FTX is getting famous with time and providing a way for crypto traders wanting to engage in leverage trades and a variety of derivatives. It is easy to sell when you know the exchange offers cryptocurrency futures and bitcoin options linked to both famous and overlooked tokens. Additionally, the exchange provides a leverage of up to 20x, along with unique products like  OIL futures, crypto indices, prediction market tokens, and MOVE contracts. 

Additional features of FTX such as fiat transfers, an OTC desk, deep liquidity, and unlimited withdrawals suit both high-frequency institutional and retail traders. At the same time, some features like stablecoin settlements, mobile app, liquidation funds, and margin wallet conversions will suit retail traders.

Author

  • Zarihoun Traore

    Hello, I'm Zarihoun Traore, the founder and driving force behind Cryptostec. With over nine years of experience in the crypto, financial, and payment sectors, I have dedicated my career to understanding and navigating these dynamic industries. My journey has taken me through a variety of roles and projects, from SaaS and Fintech startups to casino brands, each contributing to the depth of knowledge I share with you today. My Journey I have had the privilege of presenting at prominent events like CryptoFinance and attending numerous key conferences such as Websummit, Paris Blockchain Week, and iFX EXPO. These experiences have been invaluable, allowing me to engage with industry leaders, stay ahead of emerging trends, and bring back insights that shape the content you find on Cryptostec.

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