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 was 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.
First, you will need to sign up using this link, which uses our unique sign-up code. In doing so, you will get a 10% discount on your trading fees, as well as a $100 welcome offer that’s exclusive to CryptoPotato.
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:
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Binance launched its derivatives platform – Binance Futures – back in September 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.
In the years 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.
There are many reasons why you might want to consider trading Bitcoin futures on this platform. Some of them include:
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 compared to other trading methods. This is why you shouldn’t get involved unless you have sufficient experience. Regardless, make sure never to 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.
Bitcoin futures allow you 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 sell or buy it at a preset date subsequently. 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.
A year after its launch, 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 stablecoin 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.
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. Binance supports USDT and USDC.
The futures contracts here are settled in cryptocurrency. This means that you will receive your profits or mark losses in crypto.
For the sake of this guide, we will use the USD(S)-denominated futures that are settled in Tether (USDT). You can also choose to use USDC 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:
Binance allows users to place trades with a leverage of up to 125x on certain pairs (BTC/USDT, for example.)
Setting your 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 use anything above 5x, and even that seriously increases the risk of capital loss. Make sure never to 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. The difference between these is explained below.
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.
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.
Trading Bitcoin futures on Binance is simple in terms of user interface and experience. For this pair, traders can use a leverage of up to 125x.
There are a few types of orders that you can place on the platform:
Limit orders are used when you want to buy at a specific price. They are placed in the order book and filled when BTC reaches that price, provided there’s enough liquidity.
To set a limit order, you will have to specify the price at which you want to buy or sell. Where it says size, you can select the % of the maximum position you’re allowed to open. In this case, we’ve chosen 20%, which represents 0.005 BTC (displayed right below the slider). With a 5x leverage, the total cost will be 27 USDT. Note that 0.005 BTC, priced at 27,000 USDT per BTC, is around 135 USDT, but we’re only required to post 27 USDT because of the 5x leverage that we use.
NOTE: You can also type in the position size in BTC directly if you do it manually (and not use the slider). So, you can type in “0.005 BTC” instead of 20% – it’s a matter of personal preference.
That said, as soon as you hit the Buy/Long or the Sell/Short button, you will have a limit order placed in the order book. Once the price reaches that level, your order will be filled if there’s enough liquidity. That’s when your position will be opened. Below, we will show you how to monitor and close it.
The most basic order type, market orders, are used to buy Bitcoin at the current 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.
Following the same example as above, we’ve set a market order to buy 20% of the maximum allowed position (representing around 0.005 BTC). The cost at current prices would be around 28 USDT, while our position value will be once again around 130 USDT.
NOTE: Market orders are filled immediately with the best available price from the order book. Therefore, if you want to bid at a certain price but there’s not enough liquidity, the unfilled part of the order will be filled at higher prices where there’s liquidity. This is why you should be careful when executing market orders with higher volumes in less liquid markets.
As an example:
Imagine Bitcoin currently trades at $1, and you want to buy 1 BTC immediately with a market order. However, the order book doesn’t have enough sellers at $1 to fill an entire BTC. It only has 0.5 BTC sold at $1 and another 0.5 BTC sold at $2. If you execute a market order for 1 BTC, the system will fill it as follows:
Your total cost will be $0.50 + $1, which is $1.50. That’s 50% more compared to the price that you initially wanted to buy at. This is why it’s important to be careful when placing large market orders in less liquid markets, especially when futures trading, where there is high leverage.
These are typically used as stop-loss or a take-profit mechanism.
In essence, the Stop Price tab is where you put the price that you want for a limit order to be placed. The following “Price” tab is where you put the price at which you want the limit order to be executed. It’s easier if we make an example.
In the given example, Bitcoin’s price is trading at around $28,000. Let’s imagine that we have a position that we opened when the price was $27,500, and we are currently in profit. However, you want to protect your trade and put a stop-loss in case things go bad.
With the above order, we specify that as soon as the BTC price drops to $27,000, we want a limit order to be placed with an execution price of $26,500. If the price reaches $26,500, our order will be filled, and the position will be closed. Keep in mind that if you have a long position, your stop order must be the opposite – a short position. In the size tab, place the exact same size as the order that you want to close.
To use it as a take-profit mechanism, it’s best to take advantage of the Stop-Market order, but you can also use a stop-limit order as well.
Following the above example, if we want to take a profit once the price reaches $30,000, we just have to put that number as well as the exact size of the position we want to close, and as soon as the market goes there, our position will be closed.
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.
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:
As you can see, we’ve bought 0.005 BTC at an entry price of $28,097. In other words, we have opened a long position of 0.005 BTC, and we have posted a $28.13 margin for 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 $28.15 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.
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:
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.
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 0.05% taker fee.
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).
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.
Needless to say, Binance is probably one of 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 mid-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.
