What is Binance Futures? Binance Perpetual Futures
Binance allows users to trade Bitcoin and other cryptocurrencies with leverage up to 125x on Binance Futures. You can trade Perpetual Futures Contracts on Binance to make a profit or hedge against losses.
Bitcoin and altcoins are traded against USDT in the futures markets. Maximum leverage that can be used for the pair BTC/USDT is 125x and for ETH/USDT, it is 75x. It means that with a small amount of cryptocurrency, you can open very large positions which would otherwise be impossible.
Binance Futures might seem complicated at first glance, but trading on Binance Futures is actually very simple once you know the terms related to futures trading and get familiar with the user interface.
With this step-by-step guide to Binance Futures, you can learn how to open long and short leveraged positions and start trading on Binance futures.
How to use Binance Futures – Trading on Binance Futures
Step 1: Open your Futures account with a 20% fee discount
First log in to your Binance account from your browser or mobile app and click on Derivatives / USDT-Ⓜ Futures. Use the code ”10indirim” to open your Futures account and you will get a 10% fee discount for Futures trading.
You can also transfer some BNB to your Futures wallet to pay fees in BNB. By doing this, you’ll get another 10% fee discount and pay ~20% less fees in total for your futures trades.
If you don’t have a Binance account yet, you can go to the guide below to open a Binance account with a 10% fee discount for both spot and futures markets:
Step 2: Transfer USDT from your spot wallet to Futures wallet
Click on ”transfer” right above the order table and enter the amount of USDT you want to transfer to your Futures wallet and confirm the transfer.
I transferred 20 USDT to my Futures wallet to simply show you how to open long and short positions for Bitcoin with leverage up to 125x.
You can also transfer some BNB to your Futures wallet to pay fees in BNB, in this way you’ll get an extra 10% fee discount and pay 20% less trading fees in total in the futures markets.
Step 3: How to open leveraged long and short positions for Bitcoin
First you need to choose the pair you want to go long or short on and adjust your leverage. Maximum leverage you can use for BTC/USDT is 125x.
Binance Futures cross or isolated
You can also switch between cross and isolated margin modes by clicking ”cross”. In cross margin mode, if your position is at the risk of liquidation, your other open positions and margin balance can be used to avoid the liquidation of that position.
With cross margin mode, you risk losing all your margin balance. You can get started with isolated margin mode which will be less risky.
If you think BTC will go up, you need to open a buy/long position. If you are rather bearish and think BTC will go down, then you can make gains by opening a short/sell position. As BTC price goes down, your profit will increase.
I will open a long position using 5x leverage as you can see on the image below, so I expect the price to rise above 7530 USDT. My margin (cost) is 21.08 USDT and total order size is 0.014 BTC (105.42 USDT). After I click on buy/long button, my order will be placed on the market.
When the order is filled, you can see it under positions, otherwise it will be under open orders till execution. Margin ratio indicates the risk of liquidation of your position. When it reaches 100%, your position gets liquidated. PNL shows your profit based on mark price. You can close your position by entering a price and clicking on ”limit” or immediately with a market order.
You can also add margin to and remove margin from your position by clicking on the plus sign located besides your margin, which will change your liquidation price:
Binance Futures stop limit explained
For example, if you only want to go long on Bitcoin when it breaks a certain price, let’s say it is $ 10,000, then you can open a stop limit order instead of a regular limit order.
In this case, you need to set the trigger price as $10,000 and the price you want to buy Bitcoin an amount equal to or above $10,000.
If you have a long position, you can make a stop loss order to minimize your loss in the event of a price fall. For this, you need to enter a trigger price that you want to sell/short if the price goes below it and a price equal to or below the trigger price.
You can also use stop limit order to open a take profit order. For example, if you have a short position with an entry price of 8000 USDT. A buy stop limit order with trigger price and price below the entry price would be considered as take profit order.
Binance Futures fees – Binance Perpetual Futures fees
Binance Perpetual Futures trading fees are as follows:
|30d Trade Volume (BTC) or/& BNB Balance||Maker||Taker|
|< 250 BTC or ≥ 0 BNB||0.0200%||0.0400%|
|≥ 250 BTC and ≥ 50 BNB||0.0160%||0.0400%|
|≥ 2500 BTC and ≥ 200 BNB||0.0140%||0.0350%|
|≥ 7500 BTC and ≥ 500 BNB||0.0120%||0.0320%|
If your monthly trading volume is below 250 BTC, you will pay 0.02% and 0.04% futures trading fees for your maker and taker orders respectively.
When your trading volume in the past 30 days reaches 250 BTC and beyond and your average daily BNB balance is above 50 BNB, your Binance futures fee rates will be updated and you’ll trade futures with lower fee rates.
If you opened your Futures account with the code ”10indirim”, you will pay 10% less trading fees. Also, if you keep Binance Coin (BNB) in your Futures wallet to pay fees in BNB, the fee rate will drop by an extra 10%.
In addition to trading fees, users who have long or short positions also pay or receive funding every 8 hours. Funding is directly exchanged between users, so it does not involve any fee paid to Binance. Funding rates are calculated every 8 hours and can be positive or negative.
If funding rate is positive, users who have long positions pay funding and those who have short positions receive funding, and if funding rate is negative, the opposite happens. You can see your funding transactions under ”transaction history”.
You should take funding rates into consideration if you will open a large position and the market is steady.
Binance Futures fees calculation / Binance Futures fees explained
Let’s say you want to open a long position with 50x leverage and your margin is 1000 USDT. Then, your order size will be 50,000 USDT.
If you make limit orders instead of market, you can calculate the fee you will pay by 50,000×100/0.02 (assuming your monthly trading volume is below 250 BTC & 50 BNB), which will be 10 USDT.
If you opened your Futures account with the code ”10indirim”, you’ll pay 10% less fees.
Binance Futures calculator
Before opening long or short positions on Binance Futures, you can calculate the profit you will get when you close your position at a certain price using the calculator that you can find on right upper part of the page.
Binance Futures profit calculator
In the example below, our initial margin and entry price is 8000 USDT and leverage is 50x, so order size (quantity) is 50 BTC. As the position is long, we will make profit as the BTC price goes up. If we close the position at 8750 USDT, our profit (PNL) will be 3750 USDT.
You can share your thoughts about Binance Futures, leave a comment below.