About Kyan

Kyan is an orderbook-based crypto derivatives exchange with support for Request for Quote (RFQ) orders. It offers portfolio margin, multi-leg combo trades, and an API for programmatic trading (view the API documentation).

At its core, Kyan combines three essential trading products: options, perpetual futures (perps), and combo trades.

An option is a financial instrument that gives its holder the ability to buy (Call) or sell (Put) an underlying asset at a specific price (strike price) and time (expiration date/maturity).
A perpetual future (perp) is a financial instrument that allows traders to speculate on the price movements of an underlying asset without a set expiration date.
Combo trades allow users to create multi-leg strategies in a single order, making it easier to build positions that target specific market scenarios or reduce risk.

Users can long/short options and perps on BTC, ETH, and ARB.

On Kyan, positions within a portfolio don’t exist in isolation. Instead, they can offset each other based on how their risks correlate, which lowers the overall margin requirements for the entire account. To achieve this, we’ve implemented a portfolio margin system.

Portfolio Margin

Portfolio margin is a dynamic system used to compute the margin requirements for eligible positions by taking into account how positions inside a portfolio offset each other. In contrast, isolated margin calculates the risk and collateral for each position separately, without factoring in other trades.

Instead of siloing each trade, Kyan’s portfolio margin system considers how positions interact and offset one another. For example, a call spread has limited risk by design, and the margin requirement reflects that. The result is significantly lower collateral requirements and more efficient capital usage.

Account System

Kyan introduces sub-accounts: independent accounts controlled by the same external wallet (EOA), with their own separate margin accounts for each asset.

Sub-accounts function like separate wallets inside of Kyan. They’re all controlled by the same EOA, but they’re completely independent in terms of risk and margin requirements. A user can create as many sub-accounts as they need. This flexibility allows traders to manage different strategies without overlap.

Every sub-account includes separate margin accounts for BTC, ETH, and ARB. The risks for these accounts are entirely isolated from one another. Each margin account has its own margin requirements, ensuring that the risks in one portfolio do not affect the others.

This structure enables traders to execute strategies with precision while maintaining full control over their capital allocation.

Risk Calculation

Kyan’s risk engine calculates the margin requirements of an account based on two key metrics: the Initial Margin ratio (IMr) and the Maintenance Margin ratio (MMr).

IMr measures how much more directional risk the account can take. When it reaches 100%, the account cannot take on additional directional exposure, but traders can make actions that reduce risk, such as open offsetting positions, reduce existing positions, or deposit additional equity. For example, they might add a leg to complete a spread or close out part of a position.
MMr indicates how close the account is to liquidation. If MMr exceeds 100%, the account begins a gradual liquidation process to restore a healthy margin (view liquidation docs here). Trading is no longer possible but the user can still make a deposit to decrease risk. These metrics offer real-time feedback, giving users the information they need to manage risk proactively while making the most of their capital.

Liquidation Engine

Kyan’s liquidation engine is designed with the trader’s protection in mind. Unlike traditional margin systems where a liquidation can wipe out an entire account in one shot, Kyan’s approach is gradual. When an account’s risk level crosses the maintenance margin threshold, the system automatically starts reducing or closing the riskiest positions first, aiming to bring the account back to a healthier state.

This step-by-step process helps preserve as much of the user’s capital as possible, instead of forcing a total liquidation. Once the account’s margin usage drops back below the critical level, the liquidation stops automatically, ensuring that traders have the best chance to recover and continue managing their positions.

Orderbook

All liquidity for both options and perps on Kyan, apart from Request-For-Quote (RFQ) orders, will be sourced from a dedicated central orderbook.

Types of orders available on Kyan:

Market: Executes immediately at the best available price in the market.
Fill-Or-Kill (FOK): Completes entirely or not at all.
Immediate-Or-Cancel (IOC): Allows partial fills.
Limit: Executes only at the specified price:
- Good-'Til-Canceled (GTC): Remains active until it’s filled or canceled.
- Good-'Til-Date (GTD): Remains active until it's filled, canceled, or the specified expiration date is reached.
Request-For-Quote (RFQ): Ideal for larger orders beyond the orderbook's capacity. Multi-leg strategies don’t require RFQ orders, as long as there’s liquidity available for each instrument.

RFQ System

Kyan’s RFQ system enables traders to submit Requests for Quotes when executing larger trades or custom orders that require separate pricing.

Unlike regular orderbook trading, RFQs allow traders to request specific pricing without broadcasting their trading intentions to the broader market. This feature is especially valuable for size-sensitive orders. Instead of drawing liquidity from the public orderbook, they are fulfilled through direct quotes from Kyan’s network of professional market makers and liquidity providers.

Combo Trades

A combo trade (or a multi-leg strategy) refers to executing multiple options contracts at once to create a structured strategy.

On Kyan, multi-leg options strategies can be built and executed from a single dashboard in the “Combo” tab. Users can choose one of the preset strategy options, or select “Custom” and create their own combination from scratch. The builder allows for up to 7 positions in one combo trade (6 options and 1 perp).

All combo trades on Kyan are FOK orders.