With the ever growing popularity of crypto trading, which has reached out to institutional investors, so has a new type of trading made a big splash on the market — cryptocurrency derivatives. This style of trading has allowed for long and short trades on the price of Bitcoin and led to hedging and other profitable means of trading.

It has also led to an increase in the offerings for derivatives trading as many different platforms have started allowing their customers the chance to trade derivatives. The big four that have emerged out of this are OKEx, Binance, Huobi and BitMEX. These major exchanges account for billions of dollars in derivatives trading.

Recently, Cointelegraph sat down with crypto exchange OKEx’s CEO, Jay Hao, who described how the derivatives market in crypto is growing with these big four exchanges. For Hao, it is good for his company, which recently topped BitMEX for a time, to have such healthy competition.

Good competition

According to CryptoCompare, the combined volumes of OKEx’s, BitMEX, Huobi and Binance’s derivatives markets in March totalled $514 billion, or 86% of the entire market. And OKEx took more than BitMEX.

This is a big step forward for OKEx as BitMEX has been at the top of the tree for sometime now.

“In the face of competition, I always believe that continuous and healthy competition will bring new vitality into the market. While promoting the progress of the industry, it also allows users to have a better reference basis when choosing a trading platform. We will actively learn from excellent competitors. After all, the beneficiaries under healthy competition will always be users,” Hao told Cointelegraph

“Can a contract dominate the competitiveness and fate of an exchange? The answer is, of course, no. No company can be popular in the world with only one function. The needs of users are constantly changing. In the business environment, the only constant is change. What’s more, in a new and rapidly changing industry like blockchain, I always believe that OKEx’s biggest competitor is ourselves, and we are also confident that we will continue to lead the industry and make breakthroughs.”

Fighting the volatility

Hao also provided some good insight into how major exchanges deal with high levels of volatility.

“The cryptocurrency industry itself brims with uncertainties, and it is OKEx’s innate mission to be prepared to meet new challenges on all occasions. In the past year, the lowest price of Bitcoin reached about $3,300 and the highest exceeded $13,000. Especially in the past three months, the global financial industry has encountered massive fluctuations under the influence of COVID-19. 24/7 free-to-trade cryptocurrency has reacted even more in this plunge.

“For exchanges, the biggest challenge brought by such huge fluctuations is the stability of the trading system and risk control under such extreme market behaviour,” he concluded.