FTX and Paradigm Join Forces to Unveil Crypto Futures Spread Trading

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

Spread Trading can be referred to as the purchase of one security and sale of a related security, called legs, as a unit.

  • According to the official blog post, the partnership will help users to leverage “single-click” trading with “no leg perpetual risk.”
  • The new deal also aims to attract new crypto investors keen on cash and carry trades with the help of crypto spot purchases and futures instruments on FTX. ‍
  • Paradigm explained that users will be able to trade the spread between spot, perpetual, and fixed maturity futures on eight crypto-assets – Bitcoin (BTC), Ether (ETH), Solana (SOL), Avalanche (AVAX), ApeCoin (APE), Dogecoin (DOGE), Chainlink (LINK) and Litecoin (LTC).
  • FTX, on the other hand, is tasked with offering “guaranteed atomic execution and clearing of both legs” for the trades. Sam Bankman-Fried, CEO of the crypto exchange 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.”

  • The firm also mentioned that atomic execution of both legs will make it structurally less risky when compared to executing individual legs through a traditional exchange order book.
  • The subsequent lower risk profile will let market makers quote much tighter prices and in substantially larger sizes.

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