In this video, we’ll be looking at Rival One’s low-latency Spreader, which can be used to spread products at the same exchange. In the case we’ll be looking at today, we can create synthetic instruments to spread between products on different exchanges.

We’re presented with a unique opportunity due to newly listed contracts at the Coinbase Derivatives Exchange, formerly known as FairX.

Low Latency Spreader

  • In our workspace, the left Ladder shows a Bitcoin Nano contract representing 1/10th of a Bitcoin Future contract
  • The center Ladder shows a Bitcoin Futures contract listed at the CME

Creating a Synthetic Spread

  • We’ll create a new spread, Bitcoin, and add our legs, BITX2 and MBTX2, from the leg symbol search bar setting BITX2 to Buy and MBTX2 to Sell
  • We’ll quote the more illiquid leg (BITX2) and hedge the more liquid leg (MBTX2)
  • We’ll set our throttles and Hedge Tick to zero, and drag and drop the contract onto the Ladder where we see Bitcoin, MBTX2, and BITX2

Creating a Synthetic Spread

  • We’ll enter a 5-lot on the Bid and the offer. Our legs will show 50 lots due to the 1/10 ratio
  • We’ll drag our 5-lot Bid to the market to see what happens on a fill
  • Once filled, we’ll see the partials on our Order Book and the full spread in the Trade Book. In the Trade book expand the window to see each leg of the spread

Learn more about the dynamic spread trading capabilities on Rival One.