Crypto Derivatives Block Trading Platform Launched By Dutch Exchange & Partner

  • Crypto Derivatives Block Trading Platform Launched By Dutch Exchange & Partner


    You may have heard of the Deribit Dutch-based exchange. Well now, the exchange has launched a block trading solution in partnership with American trading communication platform Paradigm.

    According to a press release, the firms said, that the institutional block trading solution is the first of its kind offered by a crypto-derivatives exchange.

    The new block trading solution looks to give institutions the chance to directly negotiate crypto-derivative trades through a chat on Paradigm.

    So what exactly are block trades? As reported by CoinTelegraph:
    “Block trades are privately negotiated transactions in futures or options, or spreads and combinations of the two, that exceed certain minimum quantity thresholds. Once traders agree on a price, these transactions are submitted to the exchange for execution and clearing.”

    By bringing in this new tool, Deribit and Paradigm wish to remove any potential execution risk in relation with the order book when institutional traders privately negotiated big trades through Telegram or Microsoft’s Skype and then manually coordinated execution on Deribit.

    The CEO and co-founder of the Dutch exchange, John Jansen pointed out the benefits for institutions are further emphasised when trading options. According to the CEO, options traders can now create a portfolio of put and call options in different variations and trade them by blocks, further adding futures at the same time. This is rather than negotiating and trading options one at a time.

    Jansen stated:
    "The ability to negotiate deals privately and execute them automatically on Deribit platform but outside of the order book is a crucial step in onboarding institutional traders. You remove the risk of front running and offer institutions the ability to trade significant amounts without moving the markets and with a counterparty of their choosing.”

    It will be interesting to see how this situation plays out.

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