FTX and Paradigm Team Up to Reveal Crypto Futures Spread Trading

Crypto exchange FTX has partnered with investment company Paradigm for digital assets. The aim of the collaboration is to launch spread trading, which will essentially enable users to take advantage of price shifts with cash-and-carry games.

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

• According to the official blog post, the partnership will help users leverage “one-click” trading with “no perpetual risk.”
• The new agreement also aims to attract new crypto investors eager for cash and carry trades using 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 cryptoassets – 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 nuclear 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 are pleased to expand our relationship with a formal partnership to collaborate on product development for both our users. This structured spread trading product is the first to enable for crypto investors to use cash and carry trades through FTX and Paradigm.”

FTX has officially partnered with leading institutional liquidity networks @handelsparadigme to make it easier and cheaper than ever to further trade the spread between spot, perpetuals and futures instruments $BTC, $ETH, $SOL, $AVAX, $APE, $ DOGE, $LINK and $LTC! pic.twitter.com/mbqjpo6qCQ

— FTX (@FTX_Official) 12 August 2022

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