The most popular trading platform for bitcoin derivatives is Binance Futures. It permits traders to open both short- and long-term trades and to utilize leverage.
When Binance Futures first launched, they made sure that the trading environment was as similar to their spot exchange as possible, which made it very simple for consumers to switch when necessary. It became the top futures trading platform thanks in part to this and other factors.
The user interface is easy to use, trading is made quite straightforward, and there are a huge variety of supported cryptocurrencies.
This tutorial gives you a thorough overview of the platform, how to use it, and all the information you require.
The following methods will be used to provide the $100 bonus: $5 is given for registering and confirming your account. $50 following a deposit of $50 or more (within 5 days), and $45 following trading of $100 or more (full terms).
What if I already have an account with Binance Spot?
The 10% off Binance Futures fees are still available for the first month. On your first usage of the Futures platform, you may also go to Binance Futures and use the code Cryptopotato. Here is an example:
- Futures Binance PROS
- Merchandise with the Binance logo
- a lot of trade and liquidity
- Leading-Edge Security (SAFU insurance fund)
- The only way to trade is to deposit USDT.
- utilises the contentious stablecoin Tether (USDT)
On September 13th, 2019, Binance launched Binance Futures, its derivatives platform. As it turned out, this served as one of the primary impetuses for the company’s subsequent, enormous expansion.
The daily volume of Bitcoin futures on the platform has, as of the time of this writing, greatly surpassed the volume of the spot BTC/USDT trading pair on the main Binance platform. This is an obvious indication of investors’ interest in derivatives products.
Even if there are more rivals today than there were in 2019, Binance Futures has firmly established itself as the top derivatives platform by a wide margin.
Since its introduction, a large number of currencies have been added, along with other features and tools, making it one of the most user-friendly, streamlined, and, of course, the most popular cryptocurrency derivatives platforms.
Why Would You Trade Binance Futures?
There are a variety of reasons why using this platform to trade Bitcoin futures can be advantageous. Some of them consist of:
By a wide margin, it is the industry’s most liquid platform.
In order to safeguard your cryptocurrency portfolio during downturn markets, it enables you to short Bitcoin and other cryptocurrencies, hedge your positions, and optimize your risk management.
Because of the leverage, you don’t need to hold a significant quantity of BTC on the exchange.
On Binance, you may utilize a leverage of up to 125x while trading Bitcoin futures. However, you should also be aware that because leverage trading has a high level of risk, it is not suggested for novices. Your capital may be lost far more quickly than it normally would be. Because of this, you ought to avoid becoming engaged until you have enough experience. Regardless, never take a risk that you cannot afford to lose.
After covering the fundamentals, let’s go deeper into Binance’s Bitcoin futures and how to trade them.
What Are Futures on Bitcoin?
With Bitcoin futures, a trader may purchase or sell Bitcoin at a fixed price at a later date. When the contract ends, the contract’s buyer is required to purchase the asset, whilst the seller is required to provide it.
But in addition to conventional futures, Binance now accepts “perpetual contracts,” which are quite different and are the most popular and widely utilized class of derivatives products in terms of volume.
Contracts for perpetual futures don’t have defined expiration or settlement dates. The trader has the option to cancel them at any time, and they are tied to the spot index price. In other words, you are not required to sell or buy a perpetual contract at a later time after you buy or sell one. Instead, you are free to do so anytime you choose.
On Binance, Bitcoin futures are traded against USDT, but thanks to the COIN-M variant, they may also be settled and collateralized using USDT, BUSD, and other cryptocurrencies.
Binance Futures also debuted quarterly futures contracts for the BTC/USD trading pair in June 2020. Since then, a quarterly ETH/USD futures contract has also been established.
Futures on Binance: Start Here
You must register for a Binance account in order to trade on Binance Futures. Although the procedure is straightforward, you will need to undergo identification verification due to Binance’s KYC regulations. In our Binance trading tutorial, you can find instructions on how to sign up and make a deposit.
You will need to transfer the cash to your futures trading wallet when they have been deposited. You can find your wallet in the upper right area of the navigation menu. Select your futures account from the drop-down menu by hovering your cursor over it. Once there, you will see the following:
Additionally, you will have to decide if you want to trade on the USD- or cryptocurrency-denominated futures market. Users who don’t want exposure to stablecoins will find it quite handy that Binance has added the possibility to trade cryptocurrency-denominated futures.
- Denoted in USD (USD-S)
The futures contracts in this place are settled in stablecoins, as the name implies. This implies that you will record losses or gain profits in stablecoins.
- Cryptocurrency based (Coin-M)
Here, bitcoin is used to settle the futures contracts. This implies that you will record your losses or earn your winnings in cryptocurrency. The underlying currency you will use is Bitcoin, which is how they are margined.
We will utilize the USD-denominated futures that are settled in Tether for the purposes of this guide (USDT). BUSD is an additional base currency option for perpetual futures.
Leveraged Futures Trading on Binance
On some currencies, like BTC/USDT, Binance lets users to conduct trades with a leverage of up to 125x.
York leverage is rather easy to set. The leverage button is located above the order boxes; by pressing it, you may access the following movable bar and modify the precise leverage:
It’s crucial to remember that utilizing large leverage entails significant risks and shouldn’t be undertaken by novice traders. Going beyond 5x is not advised, and even doing so significantly raises the chance of capital loss. Never invest more than you can afford to lose, especially in the stock market.
Determine whether you want to employ cross or isolated margin when you have your leverage set. The button just adjacent to the leverage bar is used for this.
- Separate margin
In this method, the amount of margin you post for each trade is limited to the amount you assign to it. If the margin ratio hits 100%, the position is liquidated, but only to the amount you posted as margin to it, protecting the balance of your account from further danger.
- Cross margin
The asset cross margin balance is the same for all cross positions. This implies that, in the event of a liquidation event, your entire futures account—including any margin you have posted for other positions—will be liquidated.
We shall employ the isolated margin mode for the sake of this tutorial.
Trading Bitcoin Futures on Binance Futures: How to Do It
Regarding user interface and experience, trading Bitcoin futures on Binance is straightforward. Traders have access to up to 125x leverage on this pair.
You may place the following sorts of orders on the platform:
- Limit Order
- Market Order
- Trailing Stop Order
- Stop-Limit/Market Order
Opening Limit Orders for a Short or Long Position
When you wish to buy anything at a certain price,
You must indicate the price at which you wish to purchase or sell in order to establish a limit order. Enter the entire quantity of Bitcoin you desire to purchase in the size field. In this instance, we’ve specified a quantity of 0.005 BTC and a target price of $40,000. We will have a buy/long order as soon as the price of bitcoin exceeds $40,000. Because we employed a 5x leverage, the margin needed for this transaction is merely 40 USDT, as seen below.
The Buy/Long button will open your position as soon as you press it. We’ll teach you how to shut it and monitor it down below.
Market orders, the most fundamental order form, are employed to purchase Bitcoin at a spot price.
The quantity of the order is all that is required. Again, take notice that the needed margin is five times lower than the order’s actual amount.
Trailing Stop Order
These are frequently employed as take-profit or stop-loss mechanisms.
The stop price determines when your stop-limit order will convert to a standard limit order (conversely – a market order if you use a stop-market order). When you wish to buy is indicated on the pricing tab.
You must provide a stop price that, when reached, will cause the limit order to be executed at the chosen price if you want to use it as a stop-loss.
In the aforementioned scenario, if Bitcoin decreases below $44,000, a limit order will be executed at $43,950. If you are long at the present prices (about $46,000), you must enter a Sell/Short position, which is the reverse, so you may exit the trade once these levels are established.
The ideal strategy is to employ the Stop-Market order as a take-profit tool.
If you open at about the current pricing at $46,000, you will have the order executed and close your position in profit if Bitcoin reaches $48K in this scenario.
As the transaction goes in either direction, the trailing stop order enables you to lock in winnings or reduce your losses. When the market fluctuates, it enables you to put a pre-set order at a certain percentage off the current price.
It’s a more complex order type, therefore you shouldn’t use it unless you have the required expertise.
Terminating a position
You will be able to check on the status of your post once it is open. We’ve created a long Bitcoin position using a typical market order for the sake of this tutorial, as demonstrated in the example above. Where we may find it is here:
As you can see, we purchased 0.005 BTC for $47,145 at the entrance price. To put it another way, we started a long position worth 0.005 BTC and posted a $23.5 margin on it.
You have two choices if you want to close your position. You close at the best spot price immediately after the market closes. A limit close, on the other hand, enables you to designate the price at which the position should be closed.
As you can see, a liquidation price is also included in the position tracker. If this price is achieved, your trade will be liquidated since there is not enough margin. Since we are employing an isolated margin, the $23.5 that we have reported will be the sole amount burned.
Your position will be closed as soon as you press the “Market” button, and the money will then be sent back to your margin account.
Which Cryptocurrencies Are Supported by Binance Futures?
As of the time of writing, Binance Futures provides a huge selection of trading pairs. On some of the following pairs, traders can execute trades using different levels of leverage:
- Ethereum (ETH) / USDT
- Ripple (XRP) / USDT
- Binance Coin (BNB) / USDT
- Bitcoin Cash (BCH) / USDT
- Cardano (ADA) / USDT
- Stellar (XLM) / USDT
- Tron (TRX) / USDT
- ApeCoin (APE) / USDT
- Polkadot (DOT) / USDT
Constantly more commercial partners are being added. SOL, AVAX, KSM, OCEAN, HNT, SUSHI, UNI, SRM, FTM, ENJ, TOMO, NEAR, COMP, OMG, VET, ONT, ATOM, THETA, NEO, and several other currencies are among those that may be exchanged.
What are the trading fees for Binance Futures?
By utilizing this link to create a new account, new customers may receive a limited-time discount of 20% on all trading fees from CryptoPotato and Binance. After that, use the referral code “cryptopotato” to save 10% on Binance Futures trading costs for the first 30 days (limited offer).
Trading costs are one of the most important factors to take into account when choosing a futures market. This is particularly crucial if you day trade because the costs may add up rapidly.
Binance has done a fantastic job at displaying their fee structure, as is almost often the case.
The default level (Regular User) has a 0.02% maker charge and 0.04% taker fees, according to the official website, which you may see for more details about their rates for all of their goods.
Binance needs users to keep its own Binance Coin (BNB) and maintain a respectable level of turnover volume in order to benefit from lower fees (in BTC).
Binance Futures Exchange Security
Without a doubt, Binance is one of the safest cryptocurrency exchanges out today. Although it isn’t impervious to hackers, the corporation is doing a fantastic job of protecting consumers’ money.
Binance has established what is known as a SAFU fund in case the exchange were to experience hacking, as it has in the past. In order to provide consumers with additional security in dire circumstances, the exchange started allocating 10% of all trading fees to its Secure Assets Fund for Users (SAFU) on July 14, 2018. The money is kept in two different cold wallets, which can be tracked here and here.
Furthermore, Binance’s futures exchange platform is subject to a highly strict KYC procedure.
Support for Binance Futures
It should come as no surprise that the Binance Futures exchange places a strong focus on client service. Users may rely on a group of skilled and competent foreign support personnel.