What are Binance Futures?
Binance Futures is a futures platform that allows you to place orders based on speculation on the price of a currency, without owning the cryptocurrency, for a specified period of time.
In other words, binance futures are agreements that bind traders to buy or sell assets in the future at a specific price and date. These financial instruments are commonly used by both hedgers and speculators as a way to predict future price movements, to hedge risk or to make a profit.
Instructions to register for the Binance Futures exchange
To open an account on Binance Futures, you first need a regular Binance account. If you do not have an account, you can see instructions on how to register for a binance exchange here.
Next, log into your Binance account, move your mouse to the bar at the top of the page, hover over the Futures section, and click Futures.
Once you are on the Binance Futures page, you will be able to see the first two characters of the email address associated with your account in the top right corner.
Click the Open now button in the lower right corner to activate your Binance Futures account. That’s it, you’re ready to trade!
How to fund your Binance Futures account
You can transfer funds back and forth between the Exchange Wallet (the one you use on Binance) and the Futures Wallet (the one you use on Binance Futures).
To transfer funds to your Futures Wallet, click Transfer in the lower right corner of the Binance Futures page. Enter the amount you want to transfer and click Confirm transfer. You will be able to immediately see the balance added to your Futures Wallet.
Things to know at the Binance Futures interface
- Top tab:
- Check and adjust your leverage (default leverage is 20x).
- Check Mark Price (reference price) (this is an important parameter you need to monitor because liquidation happens based on Mark Price).
- Check the expected funding rate.
- Monitor your positions in the auto-leverage queue (this is an important metric you need to monitor during high volatility).
- Check out other market data, such as changes after 24 hours and volume after 24 hours.
- Here is your chart. In the top right corner of this area, you can switch between the native or integrated TradingView charts, or get an instant visual representation of the number of prices available on the auction/booking board. current order book by clicking Depth.
- This is where you can track your trading activity. You can switch between tabs to check the current status of your positions, your margin balance, view currently open and previously executed orders and get the complete transaction history in a certain period of time.
- This is where you can enter your commands and switch between different command types. This is also where you can check your fees and transfer funds from your Binance account.
- This is where you can view live order book data and a picture of the number of prices available on the order book. You can adjust the accuracy of the order book in the drop-down menu in the top right corner of this area (0.01 by default).
- This is where you can see a live feed of the trading history of Binance Futures.
- By hovering over Info you can get access to Futures FAQ, check historical funding rate and current balance of Insurance Fund. ). If you want to sign out of Binance Futures, you can also do it from here.
How to adjust the level of leverage
Binance Futures allows you to manually adjust leverage. To do so, go to the top of the page and click on the yellow box that shows your current leverage (20x by default). Specify the desired leverage by adjusting the slider or by entering the desired number and clicking Confirm.
It is worth noting that the larger the value of your position, the less leverage you can use. Similarly, the smaller the position value, the greater the leverage you can use.
Please note that using higher leverage puts you at higher risk of liquidation. Beginning traders should consider the leverage they use.
What is the difference between mark price (reference price) and last price (closest price)?
To avoid unnecessary spikes and liquidations during times of high volatility, Binance Futures uses last price and mark price (reference price).
Last price is an easy concept to understand. It means the most recent price at which the contract was traded. In other words, the most recent transaction in the trading history determines the most recent price. The most recent price is used to calculate PnL (Profit and Loss) after your position is closed.
Mark price (reference price) is designed to prevent price manipulation. The reference price is calculated using a combination of funding data and a basket of price data from multiple exchanges. The mark price is used to liquidate and calculate the current PnL (Profit and Loss) for your open position.
Please note that the reference price and the nearest price may differ.
When you set an order type that uses the stop price as the trigger, you can choose the price you want to use as the trigger – the nearest price or the reference price. To do this, select the price you want to use in the Trigger drop-down menu in the order entry field.
When are your assets at risk of being liquidated?
Liquidation occurs when your Margin Balance drops below Maintenance Margin. Margin balance is the balance of your Binance Futures account, including the current PnL (profit and loss) when your position has not been closed. So your profit and loss will cause the Margin Balance value to change.
Maintenance Margin is the minimum value you need to keep your position open. It varies according to the value of your position. Larger positions require a higher maintenance margin.
You can find a useful tool in the Positions tab in the lower left corner of the page. It helps you to quickly monitor the risk that your open positions could be liquidated. If your Margin Ratio reaches 100%, your positions will be liquidated.
When liquidation occurs, all your open positions will be cancelled. Ideally, you should monitor your positions to avoid them being automatically liquidated, and this will cost you an additional fee. If your position is close to being liquidated, you may consider closing the position manually instead of waiting for automatic liquidation.
What is Auto Leverage and How Can It Affect You?
When the trader’s account value falls below zero, the Insurance Fund is used to cover the loss. However, in some particularly volatile market environments, the Insurance Fund may not be able to handle the losses and positions must be reduced to cover them. This means that during such times, your open positions may also be at risk of being reduced.
The order of these reductions is determined by a queue, where the most profitable and most leveraged traders are at the front of the queue. You can check your current position in the queue by hovering over the indicator at the top of the page.
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