Binance Futures is the leading cryptocurrency derivatives trading platform. It allows traders to use leverage and to open both short and long positions.
Upon launch, Binance Futures made sure that the trading experience is as similar to their spot exchange as possible, making it very easy for users to transition when needed. This, amongst other things, is what helped it establish itself as the leading futures trading platform.
The user experience is smooth, trading is made relatively simple, and there’s a massive abundance of supported cryptocurrencies.
In this guide, we take a complete overlook of the platform, how to use it, and everything you need to know.
$100 Free & 10% Fees Discount: Exclusive for CryptoPotato
First, you will need to sign-up using this link, which uses our unique sign-up code.
The $100 bonus will be granted in the following way: $5 for signing up and verifying your account. $50 once a deposit of $50 and above is made (within 5 days), and $45 when trading over $100 or equivalent (full terms).
What if I already have a Binance Spot account?
You can still enjoy the 10% off Binance Futures fees for the first month. You can also navigate to Binance Futures and insert the code Cryptopotato upon your first use of the Futures platform. Here is a screenshot:
- Review & Video Tutorial
- Which Coins Does Binance Futures Support?
- Why Trade on Binance Futures?
- What are Bitcoin Futures?
- Binance Futures: Start Here
- Leveraged Trading on Binance Futures
- How to Trade Bitcoin Futures on Binance Futures
- Opening a Short or Long Position
- Closing a Position
- What are Binance Futures’ Trading Fees?
- Security: Is Binance Futures Safe?
- Binance Futures Support
Binance launched its derivatives platform – Binance Futures – back on September 13th, 2019. As it turned out, this was one of the main catalysts for the company’s massive growth that followed.
At the time of this writing, the daily volume of Bitcoin futures on the platform has far exceeded the volume of the spot BTC/USDT trading pair on the primary Binance platform. This is a clear sign of the investors’ appetite for derivatives products.
Binance Futures has established itself as the leading derivatives platform by a considerable margin, and although there are many competitors now as opposed to back in 2019, the platform is still way ahead.
Since its launch, we saw numerous coins being added, as well as a multitude of features and tools that ultimately made it one of the most seamless, streamlined, and of course – the most widely-used cryptocurrency derivatives platform.
Why Trade on Binance Futures?
There are many reasons why one might consider trading Bitcoin futures on this platform. Some of them include:
- It’s the most liquid platform in the industry by a considerable margin.
- It allows you to short Bitcoin and other cryptocurrencies: hedge your positions, and improve your risk management to protect your crypto portfolio during bear markets.
- You don’t need to keep a large amount of BTC on the exchange because of the leverage.
You can use leverage of up to 125x on Bitcoin futures on Binance. However, you should also keep in mind that leverage trading is not recommended for beginners since it involves a significant amount of risk. You can lose your capital a lot quicker than you otherwise would. This is why you shouldn’t get involved unless you have sufficient experience. Regardless, make sure to never risk more than what you can afford to lose.
Now that we’ve gone through some of the basics let’s dive deeper into Bitcoin futures on Binance and how to trade them.
What Are Bitcoin Futures?
Bitcoin futures allow the trader to buy or sell Bitcoin at a predetermined price at some point in the future. The buyer of the contract is obligated to buy the asset when the contract expires, whereas the seller is obligated to provide it.
Apart from traditional futures, however, Binance also supports the so-called perpetual contracts, which are rather different and are the most commonly used type of derivatives product with the highest volume.
Perpetual futures contracts don’t have a preset expiry and settlement date. They are anchored to the spot index price, and the trader can terminate them whenever they want. In other words, when you buy or sell a perpetual contract, you don’t have to subsequently sell or buy it at a preset date. Instead, you can do so whenever you want to.
Bitcoin futures on Binance are traded against USDT, but they can be settled and collateralized with USDT, BUSD, and other cryptocurrencies through the COIN-M variation.
Back in June 2020, Binance Futures also introduced quarterly futures contracts for the BTC/USD trading pair. Since then, it has also added an ETH/USD quarterly futures contract.
To be able to trade on Binance Futures, you need to create an account with Binance. The process in itself is very easy, but you would have to go through an identity verification because of Binance’s KYC requirements. You can learn how to register and deposit money in our Binance trading guide.
Once the funds are deposited, you will have to transfer them to your futures trading wallet. On the right corner of your navigation menu, you will see your wallet. Hover over it, and from the drop-down menu, select your futures account. Once there, this is what you will see:
You will also need to choose whether to trade on the USD or crypto-denominated futures platform. Binance added the option to trade futures denominated in crypto, which is very convenient for users who don’t want exposure to stablecoins.
- USD Denominated (USD-S)
As the name suggests, the futures contracts here are settled in stablecoins. This means that you will receive your profits or mark losses in stablecoins.
- Crypto Denominated (Coin-M)
The futures contracts here are settled in cryptocurrency. This means that you will receive your profits or mark losses in crypto. These are margined in Bitcoin, and that’s the base currency you will use.
For the sake of this guide, we will use the USD-denominated futures that are settled in Tether (USDT). You can also choose to use BUSD as the base currency for perpetual futures.
After you have funds in your account, it’s time to start trading. This is what the overall interface looks like:
Leveraged Trading on Binance Futures
Binance allows users to place trades with a leverage of up to 125x on certain pairs (BTC/USDT, for example.)
Setting york leverage is pretty simple. Above the order boxes, you will find the leverage button, and clicking it will lead to the following adjustable bar that you can use to set up the precise leverage:
It’s very important to note that using high leverage carries high risks and shouldn’t be done by inexperienced traders. It’s not advisable to go anything above 5x, and even that seriously increases the risk of capital loss. Make sure to never invest more than what you’re comfortable losing.
Once you have your leverage set, you should also determine whether you want to use cross or isolated margin. This is done from the button right next to the leverage bar.
- Isolated margin
With this mode, the margin that you post for each trade is restricted to what you allocate to it, meaning that if the margin ratio reaches 100%, it liquidates the position but only to the amount you’ve posted as margin to it without putting the rest of your account at risk.
- Cross margin
All cross positions share the same asset cross margin balance. This means that in case of a liquidation event, your entire futures account will get liquidated, including the margin you’ve posted for other positions.
For the sake of this guide, we will use the isolated margin mode.
How to Trade Bitcoin Futures on Binance Futures
There are a few types of orders that you can place on the platform:
- Limit Order
- Market Order
- Stop-Limit/Market Order
- Trailing Stop Order
Opening a Short or Long Position
Limit orders are used when you want to buy at a specific price.
To set a limit order, you will have to specify the price at which you want to buy or sell. On the size, input the total amount of BTC that you wish to buy. In this case, we’ve set a target price of $40,000 and a quantity of 0.005 BTC. As soon as the BTC price reaches $40K, we will have an order to buy/long. Note below that the margin required for this order is only 40 USDT because we’ve used a 5x leverage.
As soon as you hit the Buy/Long button, your position will open. Below, we will show you how to monitor and close it.
The most basic order type, market orders are used to buy Bitcoin at a spot price.
All you need to enter is the order quantity. Again, note that the margin required is five times less than the actual value of the order.
These are typically used as stop-loss or a take-profit mechanism.
The stop price is the price at which your stop-limit order will become a regular limit order (conversely – a market order if you use a stop-market order). The price tab indicates when you want to buy.
To use it as a stop-loss, you need to input a stop price that, once reached, will trigger the limit order to be executed at the specified price.
In the above case, if Bitcoin drops to $44,000, this will trigger a limit order to be executed at $43,950. If you’re long at the current prices (around $46K), you need to put a Sell/Short position – the opposite, so you can close your position once these levels are set.
In this case, if Bitcoin reaches $48K, you will have the order executed and close your position in profit (if you open at around the current prices at $46,000).
Trailing Stop Order
The trailing stop order helps you lock in profits or limit your losses as the trade moves in each direction. It allows you to place a pre-set order at a specific percentage away from the market price when the market swings.
It’s a more advanced order type that shouldn’t be used without the necessary experience.
Closing a position
As soon as you have your position open, you will be able to monitor its status. For the sake of this guide, we’ve opened a long Bitcoin position using a standard market order, as shown in the example above. Here’s where we can track it:
If you wish to close your position – you have two options. A market close is instant, and you close at the best available spot price. In contrast, a limit close lets you specify the price at which you would like to close the position.
As you can see, the position tracker also contains a liquidation price. This is the price that, if reached, will see your position liquidated due to insufficient margin. Since we are using an isolated margin – it will only burn through the $23.5 that we have posted.
As soon as you hit the “Market” button, your position will be closed, and you will see the funds return to your margin account.
Which Cryptocurrencies Do Binance Futures Support?
As of writing these lines, Binance Futures offers a massive variety of trading pairs. Users are able to place trades with varying leverage on some of the following pairs:
- Ethereum (ETH) / USDT
- Ripple (XRP) / USDT
- Binance Coin (BNB) / USDT
- Bitcoin Cash (BCH) / USDT
- Cardano (ADA) / USDT
- Stellar (XLM) / USDT
- Tron (TRX) / USDT
- ApeCoin (APE) / USDT
- Polkadot (DOT) / USDT
More trading pairs are being added constantly. Some of the other currencies that can be traded include but are not limited to SOL, AVAX, KSM, OCEAN, HNT, SUSHI, UNI, SRM, FTM, ENJ, TOMO, NEAR, COMP, OMG, VET, ONT, ATOM, THETA, NEO, and a lot of others.
What are Binance Futures’ Trading Fees?
As a limited-time offer, CryptoPotato and Binance offer new users 20% off on all trading fees using this link to register a new account. Afterward, use ‘cryptopotato’ as your referral code to get 10% on Binance Futures fees for the first 30 days of trading (limited offer).
One of the more crucial things to consider when selecting a futures exchange is its trading fees. This is especially important if you are day trading, as the fees can pile up fairly quickly.
As is almost always the case, Binance has done a great job of visualizing its fee structure.
You can find detailed information about their fees for all of their products on the official website, but long story short, the default level (Regular User) carries a 0.02% maker fee and 0.04% taker fees.
In order to enjoy reduced fees, Binance requires you to both hold its native Binance Coin (BNB) and maintain a decent amount of turnover volume (in BTC).
Security of the Binance Futures Exchange
Needless to say, Binance is probably the most secure cryptocurrency exchange out there. Naturally, it’s not immune to hackers, but the company is doing a splendid job of keeping users’ funds protected.
Even if the exchange were to get hacked, which it has in the past, Binance has introduced a so-called SAFU fund. Beginning July 14th, 2018, the exchange has allocated 10% of all trading fees into its Secure Assets Fund for Users (SAFU) in order to offer additional protection to users in extreme cases. Those funds are stored in separate cold wallets that can be tracked here and here.
Moreover, Binance has a very rigorous KYC process that applies to its futures exchange platform.
Binance Futures’ Support
Unsurprisingly, the Binance Futures exchange also comes with a high emphasis on customer support. Users can rely on a team of experienced and highly adequate international support staff.