Deribit, the Lithuanian headquartered bitcoin futures and options market announced today newly proposed advancements for the exchange. All of the planned updates you can read explicitly about below.
1) Portfolio Margin – ETA: May 2017
Planning to add Portfolio Margin. This will make it possible for certain users to have bigger positions with less margin required. Specifically, in the case of a portfolio consisting of a variety of options positions and futures positions.
2) Request for Quotation and spreads order books – ETA: July 2017
Working on adding a system that makes it possible to create bids and offers on a combination of assets traded on Deribit exchange. This will create a much more efficient market when trading strategies like call/put spreads.
3) Futures Mark Price Limitation – ETA: May/June 2017
Will implement rules that the Mark Price can’t be more than a certain percentage, probably around 10%, away from the index price. This way it will be impossible for example, futures to trade below $900, while the index is still at $1000.
4) Insurance Fund reduction to 25 BTC
Because of the changes, Deribit expects to see fewer bankruptcies. Therefore, they decided the insurance fund will be reduced to 25 BTC. In case the insurance fund will be depleted, Deribit will replenish the fund with an amount to be determined.
John Jansen, CEO of Deribit said:
“Currently, there are various traders with positions in Options that expire in June. For any positions in June Options created before the 31st of March, the exchange will keep an additional 75 BTC of insurance reserved, as most of those positions got opened assuming a 100 BTC insurance fund. We will always strive for not having to socialize any losses. During the 8 months that Deribit has been operating, the exchange proudly reports its never socialized any losses among users. Deribit has had only 4 BTC worth of bankruptcies so far, which got assumed by the insurance fund. Even with a lower insurance fund of 25 BTC, Deribit will still be motivated to manage risk on the platform in such way that traders will not go bankrupt.”
Deribit seems to be making it easier for professional market makers and prop traders to trade more instruments on their exchange, which should add to liquidity and market depth. These are positive developments for the marketplace.