The as-yet underdeveloped bitcoin options market is serviced by two players: Deribit and BitMex. A third, Quedex, does not really have the volume to make it a serious player yet. As it stands today, Deribit is definitely the top bitcoin Options exchange in the market.

Cryptos
  • Bitcoin
Fees
  • Maker: -.02% Taker: .05%. Options .04%.
Target Market
  • Global
Currencies
  • Crypto Only
Deposit
  • Crypto Only

Bitmex’s UP and DOWN contacts seem a bit of a trial balloon, and the product is definitely not as fully baked as either Deribit or Quedex. However, the potential of Bitmex, which is the number one bitcoin futures exchange by volume, bodes well for the future of the options market. The contracts are starting to attract much bigger liquidity, but there are serious limitations for the time being. As it currently stands, traders will have to make due with either deribit the market leader by a good ways, or quebex who suffers from a dire lack of liquidity.

Cryptos
  • Bitcoin
  • Ethereum
  • Litecoin
  • Bitcoin Cash
  • Cardano
  • EOS
  • Ripple
  • Tron
Fees
  • Maker: -.025%; Taker: .075%
Currencies
  • Crypto Only
Deposit
  • Crypto Only

See below a comparison of the three exchanges.

 

ExchangeSettlementsStrike IntervalsOption StyleOption TypesSettlement Index
Deribit1 week, 1 month, 3 months, 6 months$1,000EuropeanShort and long calls and putsBitstamp, gdax, itbit, kraken, gemini, bitfinex (hi/lo removed)
Quedex1 week, 1 month, 3 months$500EuropeanShort and long calls and putsBitstamp, gdax, itbit, kraken, gemini
Bitmex1 weekOne strike price for long and short optionsEuropeanLong and short callsBitstamp, gdax

(As of June 7th, 2018)

ExchangeContract sizeMakerTakerSettlementLeverage
Deribit1 bitcoin0%0.4%.02%10:1
Quedex$1-.02%.03%.03% In the money only20:1
BitMex0.1 XBT0%0%0%None Offered

The price of doing business

Don’t let Bitmex’s lack of fees attract you too much; you can usually find more attractively priced options on either deribit or quedex.  It is a bit hard to compare however, as bitmex’s use of a single strike price and a single settlement date often makes for an irrelevant instrument.  For example, the spot price of bitcoin is currently $9020 as of May 9th, and the only strike price on bitmex is 10,750, with settlement on May 11th. This of course means that the market has dried up – there has only been a turnover of 318 contracts – each valued at .00, which is set by the undisclosed market maker – in the last 24 hours.

So that brings us to Deribit and Quedex.  Quedex has the edge on fee pricing, but the fee price is much less important than the option prices themselves.  Obviously, any option exchange pricing is a static snapshot of a moving picture, but find below the differences in pricing at the time this article was written.  

It is unfortunately not entirely straightforward to compare, as each Quedex contract is worth $1 to 1 btc for Deribit, but we will try and do the math. The numbers in parenthesis show the Quedex bid and ask adjusted as if the contracts were for 1 bitcoin rather than a dollar. 

Expiration June 29th.  Current Spot (May 9) $9,117

 

 DeribitQuedex
BidAskBidAsk
$9,000 Call.1412.1479.00001279
(.1166)
.00002287
(.208577)
$9,000 Put.1084.1140None.00000781
(.0712272)
$10,000 Call.0968.1024.00000265None
$10,000 Put.1713.1789.00000135
(.012312)
.00001868
(.1703616
$8,000 Call.2003.2072.00000412
(.0375)
.0000276
(.251712)
$8,000 Put.0617.0677None.00000274
(.024

So, you get the picture.  Quedex is having trouble getting volume with a minimum of $1 and the bids are entirely unrealistic, at least compared to deribit. Deribit demonstrates decent spreads (at least for this market) with minimum contract sizes of 1 bitcoin. So yes, Quedex has better fees, but the product is borderline unusable at the moment.

Deribit is the obvious choice for best bitcoin options platform at the current time. Deribit benefits greatly not only from its decent product, but from being the first mover in the market. It will be interesting to see what tricks Quedex has up its sleeves to overcome this significant handicap. Bitmex, of course, is the elephant in the options room – if they decide to develop a proper options platform, they have an overwhelming customer advantage that will be nigh-on impossible for deribit to compete with. I do hope that deribit is able to continue to build on its respectable volume base, as competition will do the market well.