What is Binance Futures?
Binance Futures is a futures trading platform, also known as a derivative trading platform of the “tycoon” in crypto exchanges at the moment.
Futures are different from the Spot market in that the buy and sell activities of users take place immediately, while futures contracts or derivative transactions are sellers and buyers. will have to trade on a contract at a future point in time, this is called the contractual maturity date.
Exchange rates on the platform Binance Futures is based on the prices of the 4 largest exchanges Currently Binance, Huobi, OKEx and Bittrex.
Binance Futures is the first derivative of Binance. After this, I believe that with CZ’s great ambitions, Binance will continue to launch more types of products.
Note: The Binance Futures platform allows users to use leverage up to x125, which means that the more you eat, the more you lose! Oh no, “burn” the account, but not lose 😀
Permanent futures contract
The Binance Futures platform is for perpetual futures trading.
Perpetual Futures or Perpetual Futures are contracts that do not have a certain maturity date. This means that this Binance platform both takes advantage of the characteristics of Spot market and the advantages of derivative trading. Therefore, the price is usually approximately equal to the standard purchase and sale price of the market.
The contract does not have an exact expiration date, so the contract can only be terminated when the user terminates the trading contract or the contract is “liquidated” due to a loss exceeding the leverage ratio.
What are the transaction fees on Binance Futures?
Transaction fees on Binance Futures depend on VIP level of the user account. CHK has summarized the fee table as follows:
Maker is the person who places the order and Taker is the one who executes it.
Leverage of the Binance Futures platform
According to CHK mentioned above, Binance Futures allows users to use up to 125x maximum leverage. At launch, Binance Futures offered a maximum leverage of x20.
When adjusting the leverage as desired, select “Confirm”, it will appear as shown below
Some terms on the Binance Futures platform that you need to know
Overview of leverage
Leverage is the ratio between the price you have to place an order and the amount of deposit that you must pay to place the order.
Example: Floor H offers leverage of 100x (100x). If you place an order of 10 USDT then you can open a position for 1000 USDT. Or simply can understand that the amount you spend 10% for 1 such transaction.
Note: The risk is higher when the leverage is higher!
See more at here
Funding Rate (Funding Rate)
Margin interest is the interest rate that the buyer (Maker) must pay to the seller (Taker) .This is considered the exchange rate between 2 people and Binance does not collect the money called Funding Rate.
Note: Funding Rate on Binance Futures is 0.01% / 8h (0.03% / 24h)
Example: Person A orders 10 BTC and Person B chooses to buy Person A’s orders. So, every 1 day, Person A must pay B 10 x 0.03% = 0.003 BTC.
CHK mentioned above that this is a permanent contract so the contract does not have an exact expiration date so the contract can only be terminated when the user terminates the trading contract or the contract is “liquidated. ”Due to a loss in excess of leverage.
Note: The owner of the liquidated contract will be subject to a penalty of 0.5% x Transaction Fees.
Trading Guide on Binance Futures
When accessing Binance, you just need to select the “Futures” at the top to be able to access Binance’s Futures platform.
Then click on “Open now” in the lower right corner of the screen to activate the platform
Before guiding you to trade on Binance Futures, I want you to learn about the interface of Binance Futures first for convenience.
- Futures Contract Indicators
- Transaction graph
- A place to show your long or short positions, your balance, open positions, your entry and trade history.
- Order book
- Executed orders – completed trades
- Place of entry – place a LONG / SHORT position
CHK will guide you through small steps for easy understanding
Transfer money to the Binance Futures platform
Click on “Transfer” right from the place where the order is placed.
Then, enter the amount to be transferred to the section “Amount” as shown below and “Confirm tranfer” is done.
If you want to switch from the Binance Futures platform back to a normal platform (Spot), just select the circle with two arrows as shown below to swap positions.
Some terms about the derivative trading market
Before giving instructions on how to place orders, CHK would like to share some of the terms CHK researches related to the derivative market for readers.
- Post-Only: This command will be added to the command book but not executed immediately.
- Time in Force (TIF): Effective time.
- Good til Canceled (GTC): This order will be executed until it matches the preset price or will be canceled
- Immediate or Cancel (IOC): This order will be executed a fraction or all of the order immediately, and the rest will be canceled.
- Fill or Kill (FOK): Orders must be executed immediately in full or canceled.
- Reduce-Only: This order will only close your position.
- Last Price: The latest prices are traded on Binance Futures.
- Cost: The amount of USDT you need to be able to trade.
- Order Qty: Number of orders.
- Trigger: is the price level that will trigger the Take-profit-market, Take-profit-limit orders.
- Mark Price: The prices offered by Binance are based on the prices of major exchanges and the Funding Rate.
Trading guide on the Binance Futures platform
This order is used to place a LONG / SHORT position at your discretionary price.
Example: You want to Short / Sell 1 BTC for 7000 USDT. You just need to enter 7000 in the “Price” and 1 (ie 1 BTC) in the “Order Qty”. Then, select “Sell / Short” and you’re done. You can choose Post-Only or TIF depending on you, in terms of meaning, I have explained in the above paragraph. The same is true for the Buy / Long order.
This order will support you Long or Short as quickly as possible, because this order will match the order with the best price at that time in the order book.
Example: The market price is 7000 USDT / BTC and you predict that the BTC is down and you Short 1 BTC with the current price, just enter 1 in the box “Order Qty” then press the button Buy / Long.
This order will help trigger a limit order when the price of the market reaches the Stop Price that you have set.
For example: BTC price 7000 USDT, I place a Sell / Short Stop-Limit order, and at the same time I set Stop Price at 7300, limit price is 7360. And I put 1 BTC in the box “Order Qty”. At this point, when BTC reaches 7300 USDT, it will automatically trigger a Sell order at the price of 7360 USDT.
Stop Market Order
Similar to a Stop Limit order, this order will trigger a Market order when the price sets a pre-set Stop Price.
Example: If the current BTC price is 7200 and I place a Short Stop Market order, the Trigger Price is 7300 with a quantity of 1 BTC. When the price reaches 7300 it triggers a 1 BTC Short Market order with the market price
Close order – take profit (loss)
Because of the nature of Binance Futures as perpetual futures, in order to close a futures order, you need to place a reverse position with the same volume. For example, if you have a Short 0.5 BTC order, you need to place a Short 0.5 BTC order to close a take profit (loss) order.
If not, you can also close a part of the contract to take profit (loss) first, it is not required to close all. Generally, depending on the trading style, take profit (loss) of each person
Is the Binance Futures platform safe?
Have! Because this is a part of the Binance ecosystem – one of the big guys of the exchanges. You can rest assured about this.
I believe that in the future, Binance will also continue to launch many other derivative products to serve the needs of users.
Should I use the Binance Futures platform?
In my opinion, those who need to use leverage to trade, Binance Futures is not a bad choice. However, along with the high profits that the derivative trading market brings, the risk of “burning” is also high. You should consider joining because the risk is high to your pocket.
Through this article, CHK hopes to help readers understand more about the platform Binance Futures derivative transactions. At the moment, the market is sideways and there are few huge fluctuations like in previous years, so trading derivatives will make it easier for traders to make profits.
Along with profits, the risks of contract trading are quite high, so I advise you to be careful and fully equipped with your knowledge before entering the derivative trading market. CHK wishes you success!
#Binance #Futures #Explanation #instructions #Binance #Futures #Binance #Futures