Binance Futures Review
Review: Binance Futures Trading Platform
Binance crypto future trading is a sub-segment on the Binance crypto trading platform that caters to long and short futures contracts.
Futures trading is a common type of trading in the financial world. Futures are contracts that allow buyers and sellers to exchange financial products at an agreed-upon price at an agreed-upon date in the future.
In the Crypto world, cryptocurrencies like Bitcoin are the financial product. And because the value of Bitcoin is not stable, you can trade Bitcoin futures on Binance. What Binance does is allow you to sell or buy Bitcoins at a specific price in the future. The process of creating a future trade is called a contract.
How to get started on Binance Futures
You need to create a Binance account to start trading futures. Creating an account on Binance is simple; you can do it with an email or mobile phone number. After you sign up, complete the verification and KYC process.
The next thing is to fund your Binance wallet with USDT, after which you will transfer the fund to your futures trading wallet. To do that:
- Select the “futures” button at the top navigation.
- Click transfer on the bottom right.
- Select how much USDT you want to transfer
- Review the transaction and click “submit.” The transfer happens automatically.
Which Cryptocurrencies Do Binance Futures Support?
Binance futures support a wide range of cryptocurrencies and the list is updated occasionally. Aside from Bitcoin/USDT pairs, which you can leverage up to 125x, Binance supports the following coins, and they get up to 75x leverage:
- Ethereum (ETH) / USDT
- Ripple (XRP) / USDT
- Binance Coin (BNB) / USDT
- Bitcoin Cash (BCH) / USDT
- Cardano (ADA) / USDT
- Stellar (XLM) / USDT
- Tron (TRX) / USDT
- EOS / USDT
- Litecoin (LTC) / USDT
- Ethereum Classic (ETC) / USDT
- Chainlink (Link) / USDT
- Monero (XMR) / USDT
- Dash / USDT
- Zcash (ZEC) / USDT
- Tezos (XTZ) / USDT
- Cosmos (ATOM), Ontology (ONT), Brave (BAT), VeChain (VET), IOST, QTUM, ALGO, THETA, ZRX & NEO.
- ZIL, KNC, COMP, SXP, and OMG.
- MATIC, SRM, UNI, SUSHI, REM, BEL, HNT, OCEAN, KSM, RSR, LRC, FIL, NEAR, TOMO, ENJ, FLM, FTM, AVAX.
Why trade on Binance Futures?
Trading on Binance futures benefits you from shorting bitcoin and other cryptocurrencies. Shorting Bitcoin is an excellent way to hedge your position and manage risk against your portfolio in a bear market.
Other benefits of trading on Binance future includes:
- Ability to open a leveraged position: You can create a large contract with relatively low capital. Practically, you trade without really owning the performance bond.
- On Binance, you may trade bitcoin futures with up to 125x leverage.
How to Trade Bitcoin Futures on Binance Futures
Trading Bitcoin futures on Binance is simple. You need to create, verify and secure your account with 2-FA before you can start trading. Only Bitcoin/USDT can be sold with 125x leverage, while other cryptocurrencies can be changed with 75x leverage. On the other hand, other margin exchanges enable up to 100x leverage.
You will open order for a short or long position. A short position indicates that you are buying, while the long position is for sellers.
You can place four different types of orders on the platform:
- Limit Order
- Market Order
- Stop-Limit Order
- Take-Profit-Limit Order
Using an example of Bitcoin, let’s discuss how the four types of orders work when you open a short or long position.
When you want to buy BTC at a specific price in the future, it is best to open a limit order. Go to the Order Quantity tab input the number of BTC you wish to purchase.
Imagine you want to buy 1 BTC when its value reaches $8200. If you leverage the order at 20X, you must stake 410 USDT. So, the moment Bitcoin’s price hits $8200, your order is set automatically.
A market order is a plan to purchase or sell at the best available price. Market orders are executed based on limit orders already placed in the order book, implying that they rely on market liquidity to complete their order.
Market orders are executed immediately at the current market price, unlike limit orders, which must be placed on the order book and wait for someone to execute them.
You can purchase a market order in two ways: Total and Amount. Buying a market order with total means that you want to purchase BTC at a total price of a fixed amount. If you put $10,000 on the market, you will get the total value of BTC for that amount.
On the other hand, buying a market order with an amount means that you want to buy/see BTC with a certain quantity. Market fluctuation limits amount orders. Imagine you want to buy BTC with $10,000, and you click “Buy 100%” (that is, buy with all of the $10,000, the system will merge you with open orders of equivalent value, But if the market prices increase at that moment, the order will not complete.
These are frequently, but not always, utilized as a stop-loss mechanism. Your order will become a limit order once it reaches the stop price. When you click on the price tag, it will tell you when you want to buy.
Assume you believe Bitcoin will face significant resistance above $8,500 and that a break above that level will cement the bullish trend. If your stop price is $8,500, your stop-limit order will change to a conventional limit order buying at $8,550.
This is generally used to figure out how much you want to get paid for your profits. Your trigger price determines the price set on your order in the order book. The price tag shows the amount you wish to pay.
Closing a position
You could close an order position instantly if you initiated a market order. Otherwise, with a limit order, you have to set a specific date to complete the order.
Key features of Binance Futures Platform
Key attributes of the Binance Futures platform include:
- Flexible deposit: Binance allows users to deposit cryptocurrencies using a credit/debit card, external wallet, bank transfer (it supports all major fiat currencies).
- Diverse trading options: Aside from trading futures, the Binance futures platform also allows you to trade OTC, PTP, spot, and margin.
- Long and short investment: Binance future allows investors to trade long or short assets on supported cryptos.
- Security: Binance futures are secured by 2-factor authentication and anti-Phishing technology.
- Supports multiple devices: Future investors can stake and explore the Binance market on desktop (iOs and Windows) and all types of mobile devices.
- Offers two futures platforms: Binance futures also offers futures exchange with USDT or Coin. USDT futures support perpetual contracts. Coin futures support margined perpetual contracts. You will learn more about USDT and Coin futures on Binance later.
- Interactive interface: Binance future platform has an interactive interface that uses TradingView. You can interact with charts, indicators, and drawing tools, making trading a little less of a guessing game.
- Active customer support: Binance has one of the most active customer support networks among crypto platforms. Binance future traders like you can chat with a representative live or use one of the website resources solve their problems.
Which payment methods are available on Binance future?
Binance future offers a range of payment methods making it convenient to move crypto and fiat assets in and out of the platform without restrictions.
Here are some payment methods you can use on Binance future:
- Crypto deposit: If you own cryptocurrencies acceptable on Binance, you can transfer the coin to your Binance wallet.
- Bank Deposit: You can deposit all types of fiat currencies on Binance.
- Third-party payment: Buy crypto and make deposits via third-party apps like Simplex and Banxa.
- Credit/Debit card: Binance futures Visa and Mastercard deposits.
Binance USDT/COIN Future Explained.
Users can fund their crypto derivatives trading with Binance Futures wallets. Binance has a USDT and Coin wallet so that users can fund their futures wallet easily. They are known as:
- USDⓈ-M Futures Contracts
- COIN-M Futures Contracts
Click “wallets” on the top right-hand side of your futures platform to view tour futures wallet.
Think of these options as settlement methods. The primary difference is that COIN-margined contracts are denominated and settled in the underlying cryptocurrency. On the other hand, USDT-margined contracts are denominated and settled in USDT.
USD margined contracts are best for bull markets, while COIN-margined contracts work well with hedging.
USD-margined contracts cannot expire. On the other hand, COIN-margined contracts can expire, otherwise known as perpetual contracts. In other words, COIN-margined contracts on Binance expire Quarterly and Bi-Quarterly.
Read the pros and cons of Binance COIN/USD-margined contracts.
How to use charts on Binance futures
Binance future offers three chart formats, helping crypto traders visualize the market and their trading activities. The formats are:
The chart formats help you filter trading activities using complex or straightforward views. You can even pull up advanced technical drawing tools and adjust time intervals to track the movements of an asset.
To activate the Binance futures chart:
- Go to the “Trade” page.
- Select a crypto pairing in the dropdown menu.
You can then change the display option or even view open orders.
Trading history and Balance
Users can see a detailed record of all orders placed on the USDT and Coin Futures markets through Binance Futures. Depending on your trading activities, you can see the following information:
- Transaction History
- Open Orders
- Trade History
- Borrowing, Repayment
- Order History
- LTV Adjusted History
- Collateral Liquidation History
- Interest History.
Each order at Binance Futures is fully detailed. Users can also cancel all orders or closeout deals using this page. You can also use the “Futures Orders” dropdown menu on the left-hand side of the page to travel between the various pages.
Each futures wallet can display additional information such as:
- Margin balance
- Total cross collateral
- Total borrowed
- Total interest
- Unrealized P&L
- P&L analysis.
Binance Futures Affiliate Program
Binance’s future affiliate program is an opportunity to make money on the side while trading crypto derivatives. If you refer a new user to Binance Future, and they trade any of the spot, margin, or futures markets, you will receive a commission.
Affiliates are free, and there is no limit to how many people you can refer. The commission value differs based on the type of referral. Here is what you need to know:
How Binance Future referral works:
- You are eligible for a 20% commission on each referral if your daily average BNB account balance is less than 500BNB.
- You and the referee share 10% of the commission
- 10% of the commission is reserved for you.
- The affiliate commission is 30% of your average Balance exceeds 500BNB.
- You will share 10% of the commission with the person you referred.
- 20% of the commission is yours.
If you share a Spot referral link, you will receive a referral commission only when the person you invited trades one of Binance’s spots or futures.
Conversely, if you share a future referral link, you will earn a referral commission if the person you invited trades on Binance spot, margin, or futures market.
Is Binance futures exchange secure?
Binance is the largest cryptocurrency exchange platform today. As such, it boasts a robust security level. Although the company encountered a major security breach in 2019, it remains one of today’s most secure exchange platforms. So you do not have to worry about your futures portfolio security.
Binance added an extra layer of security following the event, froze all hacked assets, and committed to recovering all losses through its insurance fund. Changpeng, Binance CEO, often describes the insurance fund as “SAFU,” which means Secure Asset Fund for Users.
To strengthen your account, Binance advises all users to set 2-factor authentication. Aside from that, address whitelisting, device management, and the ability to restrict device access are extra security features available on Binance.