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Futures
Futures contracts on Binance allow users to trade futures on various cryptocurrencies using leverage, and to bet on whether the asset will rise or fall. Here are the key elements of trading futures on Binance:
1. Types of Futures Contracts
Futures contracts backed by (Usdt)
These contracts are based on USDT and therefore profits and losses are settled in USDT.
Margin Futures: These contracts are settled in the original cryptocurrency (BTC or ETH).
Perpetual Contracts vs. Quarterly Contracts: Perpetual contracts have no expiration date, while quarterly contracts expire at the end of the quarter.
2. Leverage
Binance offers leverage ranging from one to one hundred and twenty-five times, depending on the asset. Leverage amplifies potential profits, but also increases risks.
3. Margin and Liquidation Initial Margin
The minimum amount required to open a position Maintenance margin: the margin required to keep the position open; if not maintained, the position will be liquidated.
4. Types of Orders
Limit Orders: Buy or sell at a specified price.
Market Orders: Execute immediately at the best available price.
Stop-Limit/Stop Market Orders: Open or close a position once a certain price is reached.
Trailing Stop-Loss Orders: Allow you to follow the market to protect profits.
5. Funding Rate
Perpetual contracts have a funding rate, which adjusts positions between buyers and sellers based on the difference between the contract price and the market price.
6. Profit Taking/Loss Stop Risk Management
Binance provides tools to determine profit or loss levels to automatically manage positions. Capital management: Use a capital management strategy to avoid repeated liquidations and reduce losses. Using futures on Binance requires a good understanding of the markets and risk management tools, especially regarding leverage, which can lead to significant losses.
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