Binance Futures is the derivatives trading platform of Binance, where you can trade contracts that are linked to the value of a cryptocurrency — but without actually owning the underlying coins.

Here’s a clear breakdown:

1. What It Is

Futures contracts are agreements to buy or sell a cryptocurrency at a predetermined price in the future.

On Binance Futures, these contracts are perpetual (no expiry) or quarterly.

You profit (or lose) based on the price change of the asset, not by holding the asset itself.

2. Key Features

Leverage: You can trade with borrowed capital (up to 125x in some pairs). This means small price moves can give big profits — or big losses.

Long or Short:

Long = betting the price will go up.

Short = betting the price will go down.

24/7 Trading: Just like the spot market, it's open all the time.

Cross & Isolated Margin: Controls how your margin balance is used in trades.

Hedging: Useful if you already own crypto and want to protect yourself against price drops.

3. Risks

High Volatility: Crypto prices can move very fast.

Leverage Risk: A small market move against your position can liquidate your trade.

Complexity: Not ideal for beginners who don’t understand risk management.

4. Fees

Maker and taker fees are usually lower than spot trading for active traders.

Funding fees are paid between traders every 8 hours to keep the contract price close to the spot price

5. Why People Use Binance Futures

To profit from market moves without holding crypto

To hedge investments.

To trade larger positions than their account balance through leverage.

If you want, I can explain Binance Futures with a simple real-life example so you fully understand how profit and loss work with leverage.

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