Binance is a cryptocurrency exchange founded in 2017 by Changpeng Zhao and Yi He. Although it started operations in China, it has moved multiple times from China to Japan and is presently headquartered in Malta. This is as a result of increased efforts by the Chinese and Japanese governments to stop its citizens from participating in cryptocurrency trading. As a top-tier cryptocurrency exchange, Binance provides its users with different trading opportunities, including Margin Trading. Therefore, if you’re thinking about engaging in margin trading, this review contains all the necessary information you need to know.
About Binance Margin Trading
Binance recently released this feature in July 2019. It is a trading method where a trader uses third-party funds to enter into trades. It presents the opportunity to amplify the profits of successful trades. So, where do these funds come from? Usually, it comes from the exchange's reserve. Also, other traders provide the funds due to increased demand for margin funds. You're required to commit a certain percentage of the total order value (dependent on the leverage) to initiate a margin trade. For instance, a $50,000 trade with a leverage of 10:1 requires you to commit $5,000 from your capital.
To start margin trading, follow the steps below;
STEP 1: OPEN AN ACCOUNT
If you're a new member, visit www.binance.com to open a new account. Otherwise, log in to your Binance account. Submit all required details to the support team for identity verification. Note: Some countries are blacklisted from trades on Binance. These include the USA, among others. Therefore, ensure you're not from any of the blacklisted countries.
STEP 2: SET UP MARGIN TRADING ACCOUNT
After completing verification, open your account dashboard. Click Margin, a T&C page would come up. If you agree to the terms and conditions, tick the box and click I understand. Therefore, you can now transfer funds from your margin account. The transferred funds serve as collateral to be used when borrowing for margin trades.
In this review, we discussed how to engage in margin trades on Binance. Although the feature is new to the exchange, Binance has impressive features which makes it an excellent platform for margin trades. It offers leverage for its users up to 3x with plans of 20x. Although it has a lot of risks, Margin Trading on Binance provides profitable opportunities for its users.