FTX and Paradigm Join Forces to Reveal Crypto Futures Spread Trading

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Crypto exchange FTX has partnered with digital asset investment firm, Paradigm. The goal of the collaboration is to launch spread trading, which will essentially allow users to benefit from price dislocations with “cash-and-carry” games.

Spread Trading can be thought of as buying one security and selling a related security, called legs, as a unit.

  • According to the official blog post, the partnership will help users take advantage of “one-click” trading without “perpetual leg risk”.
  • The new deal also aims to attract new crypto investors keen on cash and carry trades using spot crypto purchases and futures on FTX. ‍
  • Paradigm explained that users will be able to trade the spread between spot, perpetual and fixed-term futures on eight cryptoassets – Bitcoin (BTC), Ether (ETH), Solana (SOL), Avalanche (AVAX), ApeCoin (APE), Dogecoin (DOGE), Chainlink (LINK) and Litecoin (LTC).
  • FTX, on the other hand, is responsible for offering “guaranteed atomic execution and two-leg clearing” for trades. Sam Bankman-Fried, CEO of the crypto exchange said,

“Paradigm is a leading network providing institutional liquidity for crypto derivatives, and we are excited to expand our relationship with a formal partnership to collaborate on product development for our two users. This structured spread trading product is the first that will allow crypto investors to use cash and take-out trading through FTX and Paradigm.

  • The company also mentioned that atomic execution of both legs would make it structurally less risky compared to executing individual legs via a traditional exchange order book.
  • The resulting lower risk profile will allow market makers to quote much tighter prices and in significantly larger sizes.
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