What are futures on Binance? (Tutorial and

Futures is one of those types of trading trading that we must know yes or yes. For many it is a way to grow our cómputo quickly, but we must be careful, since our account perro suddenly drop to zero, in fact, the risk in this type of operation is much higher.

Therefore, we recommend taking great care and greater risk management at the time of trade Binance Futures.

Tutorial: What are futures on Binance

Before starting with the tutorial, you should understand what are futures on Binance: are contracts in which it is estimated that the price of an asset will go up or down in the future, in short, we buy because we think it will go up or we sell because we think it will go down.

Actually, when doing this kind of trading we are not acquiring a token or cryptocurrency, but rather a contract in which we make a “buys» if we think the price will rise (Long) or one “sale» if we believe that the price will fall (Shorts). Thanks to Futures we have the option to make operations Shorts, that help us generate money when the market is down or in the red.

This platform offers two types of Futures, USD-M and COIN-M, Each has its advantages and disadvantages. They mainly differ in collateral, since USDT and BUSD are used for USD-M, while for COIN-M cryptocurrencies such as ETH, BTC, among others, are used.

Binance Futures Fees

Unlike spotsin this type of market operations there are two types of commissionsthere are the commissions for Financing (charged every eight hours for each open position we have) and trading commissions Maker either Takerwhich are the ones we pay in spotsbut in Futures they are much cheaper. For better understanding below we explain both:

Financing

These are the commissions that Traders who have a position open are charged in the futures market. As we mentioned above, this commission is paid every eight hours, and it is a very small percentage, like the one we see in the image below.

These commissions perro be positive (+) or negative (-), when they are positive it means that those who are in positions Long must pay this cost to those who are in Shorts. If, on the contrary, they are negative, those who are in positions Shorts they must pay those who are in Long. Each percentage varies depending on the pair being traded, for example: RAYUSDT (-0.0443) or ADAUSDT (-0.0014%).

Funding Rate USD-M

COIN-M Financing Rate

When we see these small percentages, we perro think that these are very small commissions that we perro pay without any problem. However, it is important to know that these commissions are applied to each position that we have open. In addition, they get bigger if we use leverage (it is to amplify the profit x10, x20, x100, etcétera., as well as amplify the loss) and also become more expensive by the amount of time we have the positions open. Sometimes, traders have losses just by paying these types of commissions.

Maker/Taker Commissions

These are the commissions that are paid to Binance at the time we open or close a position in the market, if we open or close through a Limit Orderwe pay the commission Maker; if we open or close a position with an order marketwe pay the commission Taker. The higher the VIP rank our Binance account has, the less of these commissions we pay, as shown in the following images:

Maker/Taker Commission Rate USD-M

Maker/Taker Commission Rates COIN-M Futures

Binance Perpetual Futures

Perpetual contracts are contracts that have no expiration date. This means that the positions we have in Shorts or in Long we cánido keep them open as long as we want. But you have to be careful, since we must pay the Financing cost every eight hours for each of our positions, which perro generate losses in our operations.

Quarterly Futures

There are not only Perpetual contracts, there are also Quarterly ones, these Futures contracts have an expiration dateas its name indicates, expire every three months after its issuance.

Example of futures on Binance

The first thing we must do is send money to our Futures wallet in the following way:

We make clic on the two arrows in the operations menu that is on the right side of the Futures platform, as indicated in the image.

Then we select the wallet from which we will send the funds, also the wallet to which we will send them (the one for Futures) and the amount to send.

Once we have money available to operate, we proceed to do the following:

If we believe that the price of Bitcoin will fall below $47,647, we open a trade Shortswith a Limit Order.
In Price we place the price at which we want our position to be created: $47,600.
For Amount we place the percentage of capital that we are going to use.
In TP/SL, we place in Take Profit the price at which we want our position to be closed if we are in profit ($47,500, because we expect it to go down). In Stop Loss the price at which we want the position to be closed if it starts to go up instead of down ($47,750). Finally, we clic on «Sell/Short».

If we want to open position in Long, the price of Stop Loss will be lower than the Take Profit because we are estimating that the price will rise. So, in case the price goes down, our SL would close the position at the price that we indicate according to our risk of loss study.

Considerations to take into account:

Leverage: Leverage will help us generate much more profit since we multiply it by 10, 20, 30 or 100, however, the slightest movement of the market in the opposite direction to our estimate will liquidate the position.

Isolated or Crossed: If we use Isolated Margin, when our position is in a high loss margin, the capital that we have allocated for said position will be discounted to zero and it will be closed. On the contrary, in Cruzado, after deducting the capital that we allocate to that position, it will begin to discount from the other positions that we have open and from the money that we have at that moment in our wallet.

Perro you make money with Futures?

The answer is YEAH, you cánido make money in Futures and in a short time. However the risk is much higher that when doing operations in spots. It is usually a type of trading recommended only for experts or technicians, since it is an instrument with a high risk of loss of capital that we invest.

Opinion on Binance Futures

Futures Binance is the best option when purchasing contracts of this type. Without a doubt, it is the most recommended option, as well as the most complete. Of course, it must be taken into account that many Exchanges they generate income through the liquidation of the ironing of this type of instrument.

So far our article on this interesting way of doing tradingwe want to say goodbye with these consejos to our readers who start trading Futures: use x1 leverage and Isolated Margin.

We hope you liked our article What are futures on Binance? (Tutorial and
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