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What are Binance Futures? [Complete User Manual from AZ]

Binance Futures

When opening a Binance Futures account, people enter the code "blogtienao” to receive 500$ bonus and 10% discount on transaction fees. You can also visit the following link to open an account: https://blogtienao.com/go/futures

Recently Binance Exchange launched a futures exchange with huge leverage up to 125x. With high leverage like this can help you bring in huge profits. If you are a professional trader, why not give it a try? If you are new, you should also learn to know what Binance Futures is.
Let's Blogtienao (BTA) learn about Binance Futures any!

What are Binance Futures?

Binance Futures is a trading platform futures contract of the Binance exchange. That is, you can profit when the market goes up or down by guessing the price of a certain crypto currency in the future with Binance Futures.

The trading volume of Bitcoin Futures indefinite on Binance Futures is behind only BitMEX at the time of writing. For a platform that's been out for less than three months, this is yet another success for Binance.

Currently, the Binance exchange has 2 futures trading platforms. The first platform is the Binance Futures platform that BTA is introducing to everyone here.

The second platform is Binance jex. But JEX is quite "inferior" compared to Futures. Futures platform with leverage x125 is still the “money machine” of Binance.

On 28/11/2019, the 2nd perpetual futures contract – ETH/USDT was launched on Binance Futures. With this contract, the user can customize the leverage from x1 up to x50x.

Update 4/10/2020: Currently, the platform has updated many other perpetual futures contracts such as: BCH, XRP, EOS, ..

Trading Fees on Binance Futures

The figure below shows the perpetual contract transaction fee schedule.

Note:

  • Maker: The person who placed the order
  • Taker: Order matching person

Binance Futures Trading Fees

Leverage overview on the Futures trading platform

When opening a position you have to pay an initial amount and amount to maintain the position. The initial amount is called the Initial Margin. The maintenance amount is the Maintenance Margin.

For better understanding, please refer to the 3 examples below.

Let's say BTC price 10000 USDT and you have 40000 USDT in collateral account and choose leverage 125x

Example 1: You open 1 BTC, nominal value 10,000 USDT

  • Initial Margin: 10,000 * 0.8% = 80 USDT
  • Maintenance Margin:10,000 * 0.4% = 40 USDT
  • Collateral: 40000 – 40 = 39960 USDT
  • Giá thanh lý: 10000 – 39960/1 <0; bạn sẽ không bao giờ bị thanh lý

Example 2: You open 4 BTC, nominal value 40,000 USDT

  • Initial Margin: 40,000 * 0.8% = 320 USDT
  • Maintenance Margin:40,000 * 0.4% = 160 USDT
  • Collateral: 30000 – 160= 39840 USDT
  • Giá thanh lý: 10000 – 39840/4 = 40
  • Bankruptcy price: 10000 – 40000/4 = 0

Example 3: You open 6 BTC, nominal value 60,000 USDT

With 125x leverage, the nominal value does not exceed 50000 USDT. To execute this order you have to lower the leverage to lower levels.

Initial Margin

Initial Margin is the amount you need to have when you open a wallet. For example, when the leverage is 125x. At this point, the real amount you have to pay to open the position is 1/125 of the value of the contract.

BTC/USDT . Perpetual Futures Contract

BTC/USDT Initial Margin Rate Binance Futures
BTC/USDT Initial Margin

ETH/USDT . Perpetual Futures Contract

ETH/USDT Initial Margin Rate
ETH/USDT Initial Margin Rate

See more: What Is Leverage Trading? (What is margin)

Maintenance Margin

Maintenance Margin is the amount you must maintain in your margin account after opening a position. To avoid auto-liquidation, you should actively liquidate before the collateral falls below the Maintenance Margin.

BTC/USDT . Perpetual Futures Contract

BTC/USDT Maintenance Margin Rate Binance Futures
BTC/USDT Maintenance Margin Rate

ETH/USDT . Perpetual Futures Contract

ETH/USDT Maintenance Margin Rate
ETH/USDT Maintenance Margin Rate

Funding Rate

This is the amount the buyer (Maker) will have to pay to the seller (Taker). Funding will be done once every 8 hours at 0.01% ie 0.03%/day.

This 0.01% level is subject to change depending on market conditions. This is a direct transaction between two parties, so Binance does not collect any money.

Note: Funding Rate will never exceed 0.05%.

Advantages and disadvantages of Binance Futures

Update: 13/12/2019

Binance Futures can now be used on the Binance app running Android , and IOS.

Advantages

  • Offers high leverage up to x125 time. The highest in the cryptocurrency market.
  • Large trading volume easy liquidity.
  • Simple, easy-to-see interface.
  • Can use Binance account without needing to open another account
  • You can trade on the Binance Android app.

Disadvantages

  • Relatively difficult to use for beginners.
  • Currently, Binance Futures does not have an iOS app.
  • There are still quite a few trading pairs left

Binance Futures Trading Guide

Open a Binance Futures account

On the website

First you must have a Binance account. If you don't have one, register using the following link: blogtienao.com/go/futures. After registration is complete, everyone choose Futures.

Sign up for a Binance account

At the bottom right corner of the Open Futures Account. Everyone fills in blogtienao go to the "Futures referral code" as shown below. Then click on Open now.

When you enter BTA's referral code, everyone will get Kickback 10%. That is, there will be a 10% discount on transaction fees. Also, if people use BNB for discount, they get another 10% off. So everyone can save up to 20% of the fee. Too good, isn't it!

Enter futures referral code

Then there will be a notification icon Open Success the top of the screen. So you have successfully opened an account Binance Futures and that. Too simple, isn't it?

Successful account opening

On the Binance App

First, people go to the "Fund” then tap Futures.

Open a Futures account on Binance App

Next, people enter the code “blogtienao” 10% discount on transaction fees and support Blogtienao. Finally, you press the . button Open a Futures account it's done.

Futures account opening confirmation

Learn the trading interface

  1. Indicators of futures contract
  2. Graph
  3. Where to display positions, margin balance, open orders, order history, transaction history.
  4. Order book of buyer and seller
  5. Transactions done
  6. Where to place the LONG/SHORT . order

Binance Futures exchange interface

How to transfer funds to Binance Futures

At the place of placing an order, you click on the word Transfer.

Transfer funds to Binance Futures

After clicking Transfer, it will appear as shown below. You enter the amount in the section "Amount" then press Confirm Transfer. So I have moved from the exchange wallet to the Futures wallet.

Enter the quantity to be transferred

To switch from Binance Futures back to your exchange wallet, just click the circle button in the middle. Convert From-To to From Futures Wallet - This Exchange Wallet. Next, enter the amount in the section "Amount" then press Confirm Transfer. So it has been successfully transferred to the exchange wallet.

transfer money back to binance exchange wallet

How to place orders on Binance Futures

Before placing an order, you need to understand the following terms

  • Post-Only: This is a command that will be added to the order book but not executed immediately
  • Time in Force (TIF): Effective time.
  • Good til Cancelled (GTC): This order will be executed until matched or will be cancelled
  • Immediate or Cancel (IOC): This order will be partially or fully executed immediately, the rest will be cancelled.
  • Fill or Kill (FOK): The order must be fully filled immediately or cancelled.
  • Reduce-Only: This order will only close your position, not increase it.
  • trigger: is the price that will trigger the Take-profit-limit, Take-profit-market orders
  • MarkPrice: The price is calculated by Binance based on the price group of major exchanges and the Funding Rate.
  • LastPrice: The most recent price traded on Binance Futures.
  • Cost: The amount of USDT you need to enter a LONG/SHORT order.
  • Order Qty: Number of orders.

How to switch between different contracts

The Binance Futures futures trading platform currently has 2 types of contracts BTC and ETH. But in the future, Binance will also launch more trading pairs. Here's how you can switch to different contracts:

In area (1) as I said in the transaction interface. You move your mouse to the BTCUSDT section. The part I have framed is blue as shown below.

How to switch between futures contracts

Trading pairs are displayed. Click on the contract you want to trade.

Select the futures contract you want to trade

Customize leverage levels on Binance Futures

In the futures index area, click 20x

Binance Futures Leverage

Then an adjustment frame will appear as shown below. Now you can adjust the leverage from 1x-125x. To confirm leverage, press confirm.

Customize Binance Futures Leverage

When adjusting the desired leverage on Binance Futures successfully, the message below will appear.

Successful Leverage Customization

Limit order

This is an order used to Buy/Long or Sell/Short at the desired price.

For example: You want to Buy/Long 1 BTC for 9000 USDT. You just need to enter 9000 in the "Price" and 1 in the section “Order Qty”. Finally you just need to press the . button Buy / Long. You can choose Post-Only or TIF depending on the purpose. Same for Sell/Short orders.

Limit order Binance Futures
Limit order

Market order

This command helps you to LONG/SHORT quickly. This order will match the best price available in the order book.

Example: Market price 9000 USDT/BTC. You think BTC is still increasing and you Buy/Long 1 BTC at the current price, you just need to enter 1 at “Order Qty” then press the button Buy / Long.

Market order
Market order

Stop-Limit order

This is an order that will trigger a limit order when the market price reaches the Stop Pirce. Limit

For example: BTC price 10000 USDT. You place a Sell/Short Stop-Limit order. The Stop Price is 10200 USDT. Price limit 10215 USDT. Amount 1 BTC. When Bitcoin price goes up to 10200 USDT then there will be a Sell/Short order at 10215 USDT placed for this 1 BTC.

Stop-Limit order
Stop-Limit order

Stop-Market Orders

This order will trigger a Market order when the Stop Price is reached.

To enter this order section, move your mouse over the arrow in the section Stop-Limit  then select Stop-Market. Same for the rest of the commands.

Stop-market
Stop-Market Orders

For example: BTC price 10000 USDT. You place a Sell/Short Stop-Market order. Stop-Price is 10100 USDT. Amount 1 BTC. When the market price reaches 10100 then a Market order will be placed for 1 BTC at the market price.

Stop-Market Orders
Stop-Market Orders

Command Take-Profit-Limit

Same as Stop-limit, but price will move in favorable direction. This order is used to place a target on an open position. Don't take profits and close positions.

For example: Current BTC price 10500 USDT. Trigger Price – 10100 USDT, Price – 10050 USDT. Amount 1 BTC. User chooses Sell/Short .If BTC price reaches 10100 USDT then there will be a Sell/Short limit order for 1 BTC with limit price 10050. Everyone should set Price price

Order Take Profit Limit
Order Take Profit Limit

Take-Profit-Market Order

This order is similar to Take Profit Limit but without a limit price.

For example: The current BTC price is 9000 USDT. Trigger Price 10000 USDT. Amount 1 BTC. User chooses Buy/Long. If BTC price reaches 10000 USDT then there will be a Market order for 1 BTC placed at market price.

Order Take Profit Market
Order Take Profit Market

The Future of Binance Futures 

Only operating for less than three months, Bitcoin futures trading volume is second only to BitMEX exchange. Recently, the trading volume has "exploded" nearly 3 billion USD in 24 hours. In the future, the futures exchange will grow even stronger.

Binance also plans to launch more trading pairs, cross-collateralized trading, and launch the Binance IOS app.

Conclusion

Hope the article “What is Binance Futures? The complete user guide from AZ " help you better understand Binance perpetual futures exchange.

Leveraged investment can bring big profits but the accompanying risks are not small. Everyone should consider and manage risk. Blogtienao (BTA) I wish you success investing in this field. Thank you for viewing the article!

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Pham Quoc Dathttps://phamquocdat.net
I'm just a simple man trying to make my way in the crypto space.
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