Delta Exchange Review: Give it a Try if You Enjoy Pain

Are you looking to add some pain — personally AND financially — to your trading life? Look no further! Delta Exchange is here to help.

Table of Contents

Pros

But let’s start with the selling points. On the “bright” side, Delta is the only exchange that offers a range of options for derivative trading on a handful of altcoins — including Solana (SOL), Ripple (XRP), Avalanche (AVAX), Chainlink (LINK), Binance Coin (BNB), and Matic. They also offer bitcoin and Ethereum. In addition to regular options trading, they offer perps and spot trading on all of the aforementioned as well as several additional coins.

There are other platforms that, like Delta, offer traditional, European-style call and put options on bitcoin and Ethereum contracts — including FTX, Binance, and Deribit. None, however, have the same offering on altcoins, which can fluctuate more rapidly than their market-leading counterparts, and provide their traders with much quicker gains (or losses).

Delta also offers a second advantage: They don’t require KYC. You won’t have to send multiple forms of identification or haggle with a compliance team for weeks sending video after video of yourself along with bank statements, utility bills, employment history, and copies of your criminal record. If you have an email address, they allow you to start trading without the interrogation that comes with trading on FTX, Binance, or Deribit.

Cons

Sadly, the advantages come with a price. For one, the order book is extremely thin — and it’s apparent that Delta is providing most, if not all, of the liquidity for options trading. The result is an often outrageous spread in price between bids and asks. Take, for example, the $1.65 asking price for a $90 Solana called dated July 29 as of May 29 — compared to a top bid of 73 cents.

If you make a purchase because you aren’t paying attention to the details, your investment will immediately decline by more than 50 percent. You’ll be left holding a significant portion of the $2,281 in open interest on that call. Without other traders for that position, you’ll have no virtually no hope of getting your money back before Solana closes above your strike price — unless Delta determines it would be profitable to buy it back from you.

On most platforms, trading involves other participants at the table. Without those participants, you can only gamble against the house. And the house generally wins.

A second problem: The exchange frequently closes for “maintenance” in the middle of Western trading hours, sometimes with little or no warning. The issue caused mayhem in May 2022 when the price data Delta relied on to run its exchange experienced a glitch, resulting in users trading bitcoin at prices ranging close to $1 up to nearly $100,000. The exchange unexpectedly shut down on a high-volatility day, resulting in hundreds of users losing access to their money as prices fluctuated.

Troublingly, GoblinCrypto spoke with several users who never heard back from Delta Exchange’s India-based customer service team after the representatives initially promised compensation for their losses.

Off prices that your illiquid books created. You can’t hide forever. 416C Fernvale Link, #02-72 Fernvale Riverbow, Singapore, Singapore 793416, SG.

— Translator (@SwolePortfolio) May 17, 2022

Arbitration in Singapore

Pankaj Balani, a native of India, heads the exchange. But the company’s legal home is in Singapore and its terms of service state that arbitration in that country will govern any disputes that arise. To quote the terms:

You agree that any dispute arising out of or related to these Terms or the Services is personal to You and Us and that any dispute will be resolved solely through individual arbitration. The arbitrator will have exclusive authority to make all procedural and substantive decisions regarding any dispute and to grant any remedy that would otherwise be available in court. The arbitrator may only conduct an individual arbitration and may not consolidate more than one individual’s claims, preside over any type of class or representative proceeding or preside over any proceeding involving more than one individual.

If you’re an American or Indian user with a loss that you believe is a result of Delta’s negligence, you may get stuck attending arbitration hearings over Zoom.

Our conclusion

In light of the scarcity of options for trading crypto options, Delta might be worth a try if you’re feeling desperate. But prepare for the trouble that comes with it.