Binance Futures is part of the Binance platform and offers cryptocurrency futures trading. Futures are a financial instrument that allows investors to trade on cryptocurrency price movements without having to own the underlying assets themselves, allowing them to make profits even in bearish markets.
Here is a detailed explanation:
1. Types of Contracts in Binance Futures
Perpetual Contracts: These are contracts that have no expiration date and whose prices move with spot market prices. They allow investors to hold positions for as long as possible.
Delivery Contracts: These are contracts with an expiration date, and the trader must close the trade before the expiration date, or it will be settled automatically.
2. Leverage
Binance Futures offers up to 125x leverage on some pairs, allowing a trader to open positions with twice the original amount.
Leverage increases potential profits, but it also increases risk, as a small mistake can result in a big loss.
3. Types of Orders
Market Order: The order is executed at the current market price.
Limit Order: The order is executed at the price you specify.
Stop-Limit Order and Stop-Market Order: Used to stop losses or take profits at a certain level.
Take Profit and Take Profit Market: Used to automatically take profits at a certain level.
4. Margin
Cross Margin: The available margin in the account is used to cover losses, which means that all the funds in the account are at risk.
Isolated Margin: The margin is set for each trade individually, reducing the risk if the trade goes wrong.
5. Liquidation
Liquidation occurs when a trader is unable to maintain the required margin, which means the trade is automatically closed to avoid a larger loss.
Liquidation is related to the leverage used and the entry price, and the trader should always monitor margin levels to avoid liquidation.
6. Fees
Binance Futures charges trading fees that vary depending on the type of order and the trading volume.
There are discounts for Binance Coin (BNB) holders or if they use it to pay fees.
7. Trading Risks
Futures trading is risky, especially with leverage. It can lead to significant loss of capital, so it is advisable not to use high leverage unless you understand the risks.
8. Demo Trading
Binance offers a demo account (Testnet) that allows traders to try trading without real risk, helping them learn how Binance Futures works and test trading strategies.
Additional notes:
You should make sure to use risk management tools, such as stop loss orders.
It is not recommended to use funds you need to invest in futures contracts due to the high risks.
If you would like more details about a particular aspect of Binance Futures, or need:
For more explanation on how to use certain tools, feel free to ask!
