FTX And Paradigm Partner To Launch Crypto Futures Spread Trading

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Crypto exchange, FTX has teamed up with the digital asset investment firm, Paradigm to launch spread trading. This move will ultimately allow traders to benefit from pricing dislocations with “cash-and-carry” plays.  Spread Trading simply refers to the purchase of one security and sale of related security called legs as units.

Paradigm also announced this launch on Friday in a blog post. They said that under the FTX partnership, traders would be allowed to utilize “one-click” trading with no leg perpetual risk for the spread between spot, perpetual, and fixed maturity futures on eight crypto assets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Avalanche (AVAX), Dogecoin (DOGE), ApeCoin (APE), Chainlink (LINK) and Litecoin (LTC). 

In a statement released by the CEO of Paradigm, Anand Gomes, he says that the partnership aims to draw in new crypto investors interested in cash and carry trades as well as leveraging crypto spot purchases and future instruments on FTX.

To achieve this, FTX has been tasked with offering “guaranteed atomic execution and clearing of both legs” for the trade. In a statement by their CEO, Sam Bankman-Fried, he said,

“Paradigm is a leading network providing institutional liquidity for crypto derivatives, and we’re excited to expand on our relationship with a formal partnership to collaborate on product developments for both of our users. This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Paradigm also stated that the atomic execution of both legs would make it structurally less risky than executing individual legs through a traditional exchange order book. 

Therefore, this lower risk profile will allow market makers to quote much tighter prices and in significantly larger sizes. According to them, the fees will be 50% lesser than when executing two individual outright trades.

Written by
Chiagoziem Bede Ikwueze

Crypto exchange, FTX has teamed up with the digital asset investment firm, Paradigm to launch spread trading. This move will ultimately allow traders to benefit from pricing dislocations with “cash-and-carry” plays.  Spread Trading simply refers to the purchase of one security and sale of related security called legs as units.

Paradigm also announced this launch on Friday in a blog post. They said that under the FTX partnership, traders would be allowed to utilize “one-click” trading with no leg perpetual risk for the spread between spot, perpetual, and fixed maturity futures on eight crypto assets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Avalanche (AVAX), Dogecoin (DOGE), ApeCoin (APE), Chainlink (LINK) and Litecoin (LTC). 

In a statement released by the CEO of Paradigm, Anand Gomes, he says that the partnership aims to draw in new crypto investors interested in cash and carry trades as well as leveraging crypto spot purchases and future instruments on FTX.

To achieve this, FTX has been tasked with offering “guaranteed atomic execution and clearing of both legs” for the trade. In a statement by their CEO, Sam Bankman-Fried, he said,

“Paradigm is a leading network providing institutional liquidity for crypto derivatives, and we’re excited to expand on our relationship with a formal partnership to collaborate on product developments for both of our users. This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Paradigm also stated that the atomic execution of both legs would make it structurally less risky than executing individual legs through a traditional exchange order book. 

Therefore, this lower risk profile will allow market makers to quote much tighter prices and in significantly larger sizes. According to them, the fees will be 50% lesser than when executing two individual outright trades.

Written by
Chiagoziem Bede Ikwueze