Crypto Derivatives Platform Delta Exchange Launches Spread Contracts On BTC

Digital asset derivatives exchange Delta Exchange has announced the launch of calendar spread contracts on bitcoin futures.

A calendar spread is an options or futures spread established by simultaneously entering a long and short position on the same underlying asset at the same strike price but with different delivery months. Spread contracts are beneficial in that they do not require traders to manage two different positions but instead a single linked position, which needs less margin.

In a press release, Delta Exchange said that the launch of its new spread contracts will allow traders to trade the price difference between two bitcoin futures with different maturities. Bitcoin spread contracts will margin and settle in USDT. Traders can deposit USDT to their accounts or convert BTC to USDT on Delta Exchange to trade these contracts. USDT quoting will allow traders to easily lock in the desired dollar spread, via limit orders, without worrying about the price of bitcoin.

“Currently, if a trader spots a mispricing between longer maturity and shorter maturity futures and wants to take a position on the calendar spread, they would have to take a position in both these futures separately and margin for them separately,” said Pankaj Balani, CEO of Delta Exchange. “Since both the futures are on the same underlying asset, they are highly correlated, which means that the losses in one position are offset by gains in another. This reduces the margin requirement and that benefit is passed on to the customers.”