Deribit has added some features to help brokers serve their clients more efficiently from within the Deribit UI. These features are unlocked via the Broker UI page on the Deribit website. In order to have access to this page, the broker must first request that it be enabled for their account via their Deribit account manager.
The Broker UI
The main functionality of this page is to allow brokers to establish links between their own Deribit account, and the Deribit accounts of their clients. Once a link is established between a broker and a client, the broker will have the ability to allocate portions of trades to different client accounts, and to book a trade between two different client accounts.
Voice brokers
A voice broker facilitates trades between makers and takers at agreed prices through various communication channels. The voice broker feature allows brokers to execute a trade between the Deribit accounts of two of their clients. Both client accounts must have been linked to the broker account via the Broker UI prior to the trade.
Voice broker trade process
The following steps describe how a voice broker trade is executed:
- The broker enters the parameters for a trade and selects specific clients to participate.
- The broker then submits this trade to the participating clients for confirmation.
- Clients can set confirmations to be manual or automatic. When manual confirmation is set, a popup appears on all of the client’s connected sub-accounts.
- If both clients confirm, and both have sufficient margin, the trade will then be executed. Clients with manual confirmation have 5 minutes to confirm before the trade is automatically cancelled.
- Once a trade is executed, both clients will receive a notification.
Brokers can track the confirmation status of each client, and they can also cancel any trade which has not yet been confirmed by at least one of the parties.
Pre-allocation of Block RFQs
All traders have the ability to allocate portions of a trade executed through the Deribit Block RFQ feature to a number of their own subaccounts. Once a broker has established a link with a client account through the Broker UI, the broker gains the additional ability to allocate portions of Block RFQ trades to client accounts as well.
This has a clear benefit for managed accounts, as it allows fund managers to ensure that when they execute a large trade on behalf of several different clients at once, each client is guaranteed to receive the same execution price at the same time.
While the entire Block RFQ still needs to satisfy the minimum block trade size, the individual allocations do not.
Allocations are selected before the RFQ is sent, so risk and margin checks are performed on the account to which the trade will be allocated, and the fees are also paid by this account. This means that if the trade is fully allocated elsewhere, the broker account is not required to have any collateral in it at all.
Although the fees are paid by the account to which the trade is allocated, the fee rate applied is that of the broker account, so clients benefit from any volume discounts that the broker account has.
For pre-allocation to work properly, clients must have set confirmations to be automatic in their account.
Pre-allocation trade process
The following steps describe how a pre-allocation trade is executed:
- The broker enters the parameters for a Block RFQ.
- Before submitting the RFQ, they select the clients to allocate the trade to, including the amounts to be allocated to each client.
- The RFQ is then submitted, and the broker waits for quotes to be returned.
- The broker can then choose whether to execute against the received quotes or not.
- If the broker executes a trade, that trade is automatically allocated to each of the pre-selected clients for the chosen amounts.
This ensures trades are executed efficiently and allocated with precision.
Summary
Both the pre-allocation and voice broker features give brokers greater control over executing trades on behalf of their clients on Deribit, all from within the Deribit platform itself.
If you are interested in using our broker features, please contact your Deribit account manager, and they can arrange to have the features enabled in your account.
