Paradigm and FTX Team Up to Launch Crypto Futures Spread Trading

Liquidity platform Paradigm has partnered with crypto exchange FTX to launch spread trading, allowing users to take advantage of price dislocations with cash-and-carry bets.

Spread trading involves buying one security and selling another related security – such as a futures contract – to produce an overall net trade with a positive value called the spread.

A so-called cash-and-carry trade exploits deviations in market prices and may involve taking a long position in an asset and simultaneously selling the associated derivative.

Paradigm users will be able to trade the spread between spot, perpetuals and futures instruments through FTX on bitcoin, ether, solana, avalanche, apecoin, dogecoin, chainlink and litecoin, the companies revealed on Friday.

FTX is the third exchange to partner with Paradigm (not to be confused with the crypto investment company of the same name) on futures spreads. Paradigm is integrated with Bybit and Deribit and began offering futures spreads cleared through these exchanges in February.

“Having multiple exchanges means Paradigm users have alternative venues to clear and deposit assets, as well as take advantage of price movements,” Paradigm co-founder Micki Koonin told Blockworks in an email. “This is particularly attractive when it is one of the largest global exchanges, such as FTX.”

FTX is the first exchange where Paradigm can offer spot trading as part of the spread — such as spot versus future trades — as well as perpetual and futures combinations, Koonin added. The exchange also allows trading of futures spreads on several coins, such as APE and DOGE.

Spread trading on Paradigm has guaranteed nuclear execution of both legs, the company said. Spreads executed on Paradigm and cleared on FTX will be charged half the fees compared to executing two individual trades.

FTX CEO Sam Bankman-Fried and Paradigm CEO Anand Gomes said in statements that the firms plan to collaborate on future products.

Paradigm has more than 1,000 institutional clients – such as hedge funds, over-the-counter desks, lenders, issuers of structured products, market makers and family offices – that trade approximately $10 billion per month.

Get today’s best crypto news and insights delivered to your inbox every night. Subscribe to Blockworks’ free newsletter now.