What are futures contracts on Binance? And how do you start with them?


Futures contracts are one of the prominent trading tools offered by the Binance platform, allowing traders the opportunity to profit from the rise or fall of cryptocurrency prices without needing to own the underlying asset. But, how do futures contracts work? What should you know before starting with them on Binance?



What are Futures Contracts?


A futures contract is an agreement to buy or sell a specific asset (like Bitcoin or Ethereum) at a later date for a price determined now. Unlike spot trading, you do not actually buy the currency, but rather bet on its price movement.


Example:



  • If you expect the price to rise, you open a buy (Long) position.


  • And if you expect it to fall, you open a sell (Short) position.



Benefits of futures contracts on Binance:




  2. Leverage:

    Start from 1x and go up to 125x - but the higher you go, the higher the risk.



  4. Profit in both directions:

    Whether the market is bullish or bearish, you can make profits if you predict the right direction.



  6. Instant execution and high liquidity:

    Binance is one of the largest global platforms, ensuring quick execution of your orders.



How to start with Binance Futures?




  2. Activate Futures Account:

    Go to: Derivatives > USDT-M Futures > Agree to the terms.



  4. Transfer your balance:

    From the spot account to the futures account.



  6. Choose the currency and specify the type of order:



    • Market (Immediate Buy)


    • Limit (At a specified price)


    • Stop-limit (Conditional order)



  8. Specify the leverage:

    Start with 5x or less as a beginner.



  10. Set Stop Loss and Take Profit:

    To avoid significant losses, especially during sudden market movements.



Golden Tips:



  • Do not enter with your entire capital.


  • Do not use high leverage if you are a beginner.


  • Learn to read charts and technical indicators.


  • Follow the news as it greatly affects market movements.



Important Note:


Futures contracts are a double-edged sword and can lead to significant losses if not managed properly. Therefore, learn well before risking your money.



By: [abo nwaf]

Binance Square - May 2025