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What is cont in binance?

4 Answer(s) Available
Answer # 1 #

Binance Futures offers one of the most comprehensive ranges of crypto derivatives in the industry with over 500 trading pairs. Currently, the futures product line consists of two types, COIN-margined and USDT-margined futures contracts. The former was first introduced in Q2 2020 while the latter was launched in September 2019.

In the following article, we compare the two futures products and analyze how different settlement methods can benefit you and possibly maximize your returns in the long run.

To begin, we compare the contract specifications of both COIN-margined and USDT-margined products.

COIN-margined contracts on Binance Futures offer the following characteristics:

On the other hand, USDT-margined contracts offer the following characteristics:

Binance Futures’ COIN-margined contracts are denominated and settled in its base currency. To open a position in BTCUSD Quarterly 1225, you can simply fund the initial margin in Bitcoin. Therefore, you do not need to convert Bitcoin to a quote asset such as Tether (USDT).

If you are a miner or a long-term investor, this is ideal for you. Especially in this bull market today, investors are more inclined to hold on to their cryptocurrencies. As contracts are settled in the underlying cryptocurrency, any profits can contribute to your long-term stack. Furthermore, as prices continue to rise, the value of your collateral will increase correspondingly, representing a great way to increase your cryptocurrency holdings over the long run.

With COIN-margined futures, miners and long-term investors can also hedge their positions in the futures market without converting any of their holdings into USDT. As such, they do not need to sell any cryptocurrencies at a compromised price.

To hedge, you can simply open a short position in any Binance Futures’ COIN-margined quarterly futures. If the price of the underlying asset goes down, profits from the futures position can offset your portfolio’s losses.

You have to enforce tighter risk controls when trading COIN-margined futures as the underlying collateral is often exposed to price volatility. Unlike stablecoins such as USDT, most cryptocurrencies experience high volatility several times in a year. These trends may persist for months before stabilizing.

For instance, Bitcoin experienced a prolonged bear market in the second half of 2019 before recovering in early 2020. In this period, investors saw the value of their BTC holdings fall dramatically and on March 12, 2020, Bitcoin marked one of its worst trading days in history after a price plunge of more than 40% in a single day.

In these situations, traders need to react quickly to hedge their exposure via a futures contract to protect themselves against downside risk. Ultimately, this is the main function of the futures market.

Due to price volatility in the underlying asset, COIN-margined futures have a non-linear payout structure:

Assume the price of Bitcoin is now $10,000. On Binance, one BTC-margined contract is worth $100. Therefore, in BTC terms, one contract costs: $100/$10,000 = 0.01 BTC.

Suppose you go long 1 contract at $10,000. By doing this, you are essentially short 100 USD and long an equivalent value of Bitcoin. Conversely, by short-selling a contract, you are long USD and short an equivalent value of Bitcoin. If Bitcoin’s price goes up against USD, this means that you can buy fewer Bitcoin with the same amount of USD and vice versa.

The graph below shows the profit and loss comparison between a non-linear and linear payout as Bitcoin's price moves by increments of $1,000.

As shown, every $1,000 increment in Bitcoin's price does not translate to a proportionate amount of profits or losses denominated in BTC. In fact, each subsequent increment in the BTC/USD trading pair returns diminishing amounts of BTC. This phenomenon is often described as the non-linear nature of inverse futures contracts.

AUSDT-margined contract is a linear futures product that is quoted and settled in USDT – a stablecoin pegged to the value of the U.S. dollar. One of the key benefits of USDT settlement is that you can easily calculate their returns in fiat instead of BTC, which makes USDT-margined contracts more intuitive.

For example, when you make 500 USDT in profit, you can easily estimate that the profit is worth approximately $500  since the value of 1 USDT is pegged closely to 1 USD.

Additionally, a universal settlement currency such as USDT, provides more flexibility. You can use the same settlement currency across various futures contracts (i.e., BTC, ETH, XRP and etc), eliminating the need to buy the underlying coins to fund futures positions. As such, you will not incur excessive fees as there is no additional conversion required when trading with USDT.

In periods of high volatility, USDT-margined contracts can help reduce the risk of large price swings. So you do not need to worry about hedging their underlying collateral exposure. On several occasions, trading with USDT has been a prudent choice, especially in volatile periods.

When trading with USDT-margined contracts, you must allocate a significant portion of your portfolio in USDT. This ensures that you hold enough collateral to fund positions in the futures market. Otherwise, you will be forced to sell your cryptocurrencies at a compromised price should you need to trade in the futures market.

This strategy can be unfavorable for most cryptocurrency investors as stablecoins such as USDT do not appreciate in value and are not investment assets, unlike conventional cryptocurrencies. 100 USDT today is likely to be worth $100 in two years.

For many investors, the ability to trade Bitcoin and other cryptocurrencies against fiat currencies without the need to interact with fiat itself can be beneficial. From the exchanges’ perspective, excessive regulation can be avoided by eliminating fiat altogether.

Now that you know the difference between COIN-margined and USDT-margined contracts and their nuances, the question is, how can we use them to maximize returns?

Ideally, in a bull market, long positions with COIN-margined contracts can maximize profits. Conversely, as the market turns bearish, using USDT-margined contracts to go short is a safer option to preserve your gains.

In short, COIN-margined contracts are more suited for hedging purposes. These products enable miners and long-term investors to hedge the value of their crypto holdings in terms of USD via short positions.

On the other hand, USDT-margined contracts are simpler to operate and do not need to hedge the margin risk like COIN-margined contracts.

Read the following helpful articles for more information about Binance Futures:

Saleh Paquin
Answer # 2 #

Crypto derivatives are financial instruments that represent the value of an underlying digital asset. These futures contracts enable traders to profit from short-term price movements in either direction. In contrast, traders in the spot markets can only benefit when the cryptocurrencies they hold increase in market value over time.

The crypto futures market records trillions of dollars in monthly trading volume, promoting price discovery and enabling traders to transact more efficiently. Binance Futures has captured a significant share of this market, becoming one of the most liquid derivatives exchanges in the world.

Although there are many features in Binance Futures that are catered to traders, such as grid trading and TWAP, in the following article, we will explore the two types of derivatives contracts the platform offers.

Binance Futures offers a wide selection of crypto derivatives with over 500 trading pairs. Traders on the world’s leading crypto futures exchange can choose from two types of crypto derivatives, including COIN-Margined and USDⓈ-Margined contracts.

COIN-Margined contracts are settled and collateralized in their based cryptocurrency. Therefore, traders can continue to HODL their crypto assets as collateral instead of stablecoins. This type of contract is ideal for those who seek to optimize their gains during times of growth.

On the other hand, USDⓈ-Margined contracts provide a versatile settlement currency denominated in USDT and BUSD. Some traders may prefer to trade this type of derivatives contract as they represent a safer option, especially during prolonged downtrends.

COIN-Margined contracts are a type of derivatives that obtain their value from the underlying cryptocurrency they represent. These financial tools offer an alternative way to gain exposure to cryptos without owning them. They also provide a unique opportunity for long-term investors to participate in the futures markets without converting their crypto assets to stablecoins.

HODLers can take advantage of COIN-Margined contracts to grow their portfolios because these are settled in the underlying cryptocurrency. For instance, Bitcoin-Margined contracts can return a profit in BTC, making them preferable in an uptrend. Not only can traders benefit from their profitable trades, but as prices increase, the value of their collateral also increases.

COIN-Margined contracts simply represent a great way to increase cryptocurrency holdings over the long run.

Settled and denominated in their base cryptocurrency, Binance Futures’ COIN-Margined contracts enable traders to fund their accounts with their crypto of choice. Long-term investors don’t have to convert their digital assets into stablecoins like USDT and BUSD. Instead, market participants can continue to HODL and grow their portfolios when their trades return a profit, benefiting from the non-linear payout structure COIN-Margined contracts have.

HODLers can hedge their positions with COIN-Margined contracts even when the markets turn red because they don’t need to sell any cryptocurrencies at a compromised price. So if the price of the underlying asset goes down, profits from the COIN-Margined trades can offset the portfolio’s losses.

Another benefit of COIN-Margined contracts is that traders can choose between Perpetual, Quarterly, and Bi-Quarterly expirations.

Although perpetual contracts are the most popular, funding fees are incurred, which correlate with the market's underlying trend. Funding fees may also increase when the market is in highly bullish territory, as traders are willing to pay higher fees to go long on a futures contract.

On the contrary, quarterly contracts don’t carry a fee when held for one to three months, making these trades more wallet-friendly and easier to manage and allowing investors to trade on a lower-cost basis.

Despite all the benefits that COIN-Margined contracts, HODLers must approach these financial instruments with caution. The high levels of volatility in the cryptocurrency market can affect the purchasing power of the collateral you have allocated for trading.

For instance, Bitcoin entered a four-month downtrend after reaching nearly $70,000 in November 2021. Long-term investors saw the value of their BTC holdings fall by more than 50% throughout this period. Such drastic trend changes in the crypto markets make it crucial for traders to be careful when trading COIN-Margined contracts.

USDⓈ-Margined contracts are crypto derivatives quoted and settled in USDT, BUSD or USDC. These financial instruments represent the value of a specific asset that traders can buy or sell at a predetermined price at a specified time in the future. They’re ideal for traders because they enable exposure to cryptocurrencies without owning them.

Traders prefer to trade USDⓈ-Margined contracts because there’s no need to worry about cryptos being bullish, bearish or stagnant. Short-selling enables traders to sell high and buy low to profit from the price difference, making market-neutral trading strategies possible. Meanwhile, leverage can result in significant gains from small price fluctuations.

USDⓈ-Margined contracts are catered to those who want to jump in and out of the market quickly to benefit from potential setups they have identified.

Settled and quoted in USDT or BUSD, Binance Futures’ USDⓈ-Margined contracts enable traders to maximize their returns on investment. They allow better capital efficiency as traders don’t have to lock up significant amounts of capital to purchase a large number of cryptocurrencies. Additionally, the settlement in stablecoins makes USDⓈ-Margined contracts more intuitive because it’s easier to calculate profits and potential losses.

Regardless of the market's direction, traders can profit with USDⓈ-Margined contracts because they’re only required to hold USDT or BUSD as collateral. So traders can go long or short while maintaining the same purchasing power. Such versatility is essential during periods of heightened volatility as USDⓈ-Margined contracts can help hedge the risk of large price swings.

Another benefit of USDⓈ-Margined contracts is that traders can choose between Perpetual and Delivery contracts.

Perpetual contracts don’t have an expiration date, allowing traders to keep a position to perpetuity unless liquidation occurs. Still, perpetual futures carry a funding fee that may fluctuate over time. On the other hand, delivery contracts offer a wide range of trading opportunities, including basis trading.

It’s worth noting that BUSD-Margined contracts offer lower fees and maker rebates. Traders can enjoy a fee discount with any trading pairs that include BUSD. Like any other USDⓈ-margined contract, traders also don’t need to hold the base crypto asset to fund any futures positions.

Despite all the benefits that USDⓈ-Margined contracts, traders must implement a robust risk management strategy when trading these financial instruments. Over-leveraging is one of the common reasons why novice traders fail. Not only does leverage amplify losses, but it also amplifies transaction costs.

For instance, the cost of entering a 100x leverage position with only 500 USDT as collateral is 20 USDT since the standard taker fee is 0.04%, representing 4% of the trading capital allocated gone in fees. On top of that, if the asset moves only 1% against the position, the account can be liquidated. For this reason, traders must be cautious when trading USDⓈ-Margined contracts.

Deciding whether to trade COIN-Margined or USDⓈ-Margined contracts depends on a trader's expertise, risk tolerance, and comfort while trading in the cryptocurrency markets. The former is more prevalent among long-term investors and HODLers, while the latter attracts traders looking to enter quick trades.

If you’re still confused about which type of contract fits your purpose, Binance Futures offers a mock trading environment where you can trade COIN-Margined and USDⓈ-Margined contracts with zero risks. Here, you will have a risk-free starting balance of 100,000 USDT to let you experience all of Binance Futures' features. You will be able to manage your virtual portfolio in a testnet environment and experiment with different risk levels by applying leverage, placing stop-loss, and taking profit orders.

Once you have sharpened your skills, you can simply switch to trading on the main platform and join more than 28 million active traders in the world’s leading crypto derivatives exchange.

Read the following helpful articles for more information about Binance Futures:

Tomasz Lyden
Answer # 3 #

Binance Futures has just launched its latest line of futures products, COIN-margined Perpetual Futures.

COIN-margined perpetual contracts are the second line of futures products to be margined and priced using a cryptocurrency. This line of Bitcoin-margined perpetual futures will complement Binance Futures’ broad variety of derivatives, including COIN-margined quarterly futures.

But what exactly are COIN-margined perpetual futures? In this article, we shall dive into how it works, how it differs from existing crypto derivatives products, and how it complements them.

COIN-margined perpetual contracts are a type of derivatives that derives their value from an underlying cryptocurrency. They are an alternative way to gain exposure to a cryptocurrency without having to own it.

With perpetual contracts, you can trade cryptocurrencies with leverage, which means you can magnify small movements in price to potentially generate outsized profits.

Just like USDT-margined perpetual contracts, COIN-margined perpetual contracts do not have an expiry date. Therefore, users do not need to keep track of various delivery months.

Binance Futures’ COIN-margined perpetual contracts are Bitcoin-margined, which means Bitcoin is used as the base currency. Each COIN-margined contract represents 100 USD and as such, USD is the counter currency. Since each contract represents a fixed quantity of USD, this means Bitcoin is used to fund the initial margin or calculate profit and loss.

Let’s take a look at an example:

Assume you purchased 100 Bitcoin-margined perpetual contracts (100 x 100 USD = $10,000) at $12,000 each. By doing this, you are essentially selling USD 10,000 and buying an equivalent value of Bitcoin (10,000/12,000 = 0.83 BTC).

Suppose Bitcoin’s price rose to $14,000, and you want to secure profits from the trade. To close the position, you buy back USD 10,000 worth of contracts and simultaneously sell the equivalent of Bitcoin (10,000/14,000 = 0.71 BTC).

In this trade, your profit will be calculated as such: Quantity of Bitcoins at Entry - Quantity of Bitcoins at Close = 0.83 - 0.71 = 0.12 BTC.

Unlike USDT-margined contracts, P&L for COIN-margined contracts is calculated in the respective cryptocurrency (i.e. BTC).

Here are the contract specifications:

COIN-margined perpetual contracts on Binance Futures offer the following characteristics:

- Priced and Settled in BTC - Contracts are denominated and settled in BTC. Hence, it provides ease for new users to participate in these markets.

- No Expiration Date - Traders can hold positions without an expiry date and do not need to keep track of various delivery months, unlike traditional futures contracts.

- Funding Rate - Every eight hours, funding rates are paid either to the long or the short based on differences with the spot right. It prevents lasting divergence in the price of the spot and perpetual contract markets.

COIN-margined perpetual futures offers three major benefits:

1. Shared Margin - Users enjoy synergies between the COIN-margined perpetual and quarterly products. Any profits made can be used for margin on either the quarterly or perpetual futures contract; this is particularly useful for those hedging between the two markets.

Let’s run through a quick example:

Assume that you are holding a long-term position of 1,000 BTCUSD perpetual contracts at $12,000 each. You predict a temporary pullback in Bitcoin and want to hedge this risk with a quarterly contract. To hedge, you sold 500 contracts of quarterlies futures.

In this scenario, your prediction came true, and Bitcoin plunged 15%. As a result, your position in BTCUSD perpetual shows an unrealized loss of 1.47 BTC. However, because you’ve hedged half of your long-term position, profits from the short hedge, which amounts to 0.74 BTC, offset the losses in BTCUSD Perpetual.

Unrealized loss when Bitcoin price dropped 15%:

As a result, your margin balance is less impacted despite the sharp pullback in prices, reducing the probability of you facing liquidation.

Additionally, the shared margin feature allows traders to arbitrage between the two markets without the need to maintain multiple accounts or margin. Traders simply need to deposit margin in the BTC-margined wallet, where the same margin balance can be used to open positions in both markets. This means that profits will offset losses in the losing position. Thus, the margin balance only reflects the net P&L between positions in the two markets.

2. HODL & Earn - Binance Futures’ COIN-margined futures is ideal for traders who prefer to hold positions for a long time. Bitcoin investors can now hedge their positions in the futures market without converting any of their holdings into USDT. In other words, they do not need to sell any Bitcoin at a compromised price.

Especially in a bull market, investors are more inclined to hold on to their cryptocurrencies. As contracts are settled in BTC, any profits can contribute to your long-term BTC stack. This is simply a great way to increase your Bitcoin holdings over the long run. Therefore, traders can use perpetual contracts to hold and potentially accumulate more cryptocurrency (e.g. BTC) for longer-term.

3. Customized Margin Modes - Binance Futures is the only exchange offering Cross or Isolated margin modes for COIN-margined products.

In a Cross margin mode your margin balance is shared across all open positions while in an Isolated margin mode each open position has an independent margin account.

This means users can enjoy flexible control of their margin balance by either spreading it across all their open positions or setting individual limits for each position they own. Furthermore, Binance Futures also offers users the ability to switch their margin modes at any time.

Quarterly futures have expiration dates, and trading them means that you own the contract within a given timeframe.

For example, if you go long 1,000 BTC Quarterly 1225 futures contracts for $12,000 and hold those contracts through expiration in December, and the contract settles at $13,500 at expiration, then you will get paid out $1,500 in Bitcoin.

It is important to note that quarterly futures contracts have a tendency to trade at higher or lower prices than the index price. This difference is also known as the futures’ basis. Basis only applies to quarterly contracts because they expire, and users are required to roll over to another contract in a further-out month.

In contrast, perpetual futures contracts have no expiration. These products have a funding period every eight hours, which keeps futures prices close to the index price. Based on the price difference between the index price to its perpetual futures price, traders holding long positions will pay a small fee to traders holding short positions, or vice versa, keeping futures prices close to the index.

With the introduction of COIN-margined perpetual futures, users can now enjoy the synergies between the two markets, perpetual and quarterly. Innovative functions such as shared margin and customized margin modes allow arbitrageurs and sophisticated traders to efficiently manage their margin and P&L. These features make it an ideal product for long-term traders, arbitrageurs, and hedgers.

Backed by an industry-leading matching engine and extensive range of hedging tools, Binance Futures is now the preferred hedging venue for traders.

Read the following helpful articles for more information about Binance Futures:

Answer # 4 #

For anyone interested in trading futures, there’s a lot to learn. You’ll need to carefully study technical skills and the underlying trading concepts before jumping in. At first glance, the Binance Futures UI can look intimidating, but with the following guide, you’ll soon begin recognizing its key features and facets.

Before opening a Binance Futures account, you need a regular Binance account. If you don’t have one, you can go to Binance and click on Register in the top right corner of your screen. Then follow these steps:

If you’re new to trading futures, refer to the Binance Futures FAQ for an overview of the contract specifications on offer. If you’d like to test out the platform without risking real funds, you can also try out the Binance Futures testnet.

To fund your Futures account, you’ll first need to make sure you have funds available in your Binance account you can transfer over. These funds could be in your Funding, Fiat and Spot, Margin, or Options wallet. If you don’t have any funds deposited to Binance, we recommend reading our How to Deposit on Binance guide.

1. In the area, you’ll find links to other Binance pages, such as COIN-M Futures, Options, Strategy Trading, and Activities. Under the tab, you can find links to Futures FAQ, API Access, funding rate, index price, and other market data.

On the right side of the top bar, you can access your Binance account. You can easily check your wallet balances and orders across the entire Binance ecosystem.

2. In the section, you can:

3. The lets you monitor your futures trading activity. You can switch tabs to check your position’s current status and your currently open and previously executed orders. You can also get a full trading and transaction history for a given period.

This section is also where you can monitor your position in the auto-deleverage queue under ADL. This is especially important to pay attention to during periods of high volatility.

4. In the section, you can check your available assets, transfer, and buy more crypto. This is also where you can view information relating to the current contract and your positions. Be sure to keep an eye on the margin ratio to prevent liquidations.

By clicking on , you can transfer funds between your Futures Wallet and the rest of the Binance ecosystem.

5. The field is where you’ll input your Buy/Long and Sell/Short orders. You can find a detailed explanation of the available order types further down in this article. You can also switch between Cross Margin and Isolated Margin at the top of the view. If you want to adjust your leverage, clicking on your current leverage amount (20x by default).

In all of these modules/sections, you can resize the element to your liking. Whenever you see an arrow on the bottom right corner of a module, you can drag it to your preferred layout. This way, you can easily create your own custom interface.

Binance Futures allows you to manually adjust the leverage of each contract. To choose a specific contract, go to the top left of the page and hover over the current contract (BTCUSDT by default).

To adjust the leverage, go to the section field and click on your current leverage amount (20x by default). You can specify the amount of leverage by adjusting the slider, or by typing it in, and clicking on .

Note that the larger the position size is, the smaller the amount of leverage is that you can use. Similarly, the smaller the position size, the larger the leverage you can use. Using higher leverage also carries a higher risk of liquidation.

As always, every trader should carefully consider the amount of leverage that they use and its associated risk.

To avoid spikes and unnecessary liquidations during periods of high volatility, Binance Futures uses a last price and mark price.

Note that the mark price and the last price may differ.

When setting an order type that uses a stop price as a trigger, you can select either the last price or the mark price as the trigger. To do this, select the price you wish to use in the dropdown menu at the bottom of the order entry field.

When placing your orders, you have a range of options to choose from:

A limit order is an order placed on the order book with a specific limit price. When you place a limit order, the trade will only be executed if the market price reaches your limit price (or better). You can use limit orders to potentially buy at a lower price or to sell at a higher price than the current market price.

A market order is an order to buy or sell at the best available current price. It is executed against the limit orders previously placed on the order book. When placing a market order, you will pay fees as a market taker.

The easiest way to understand a stop-limit order is to break it down into its stop price and limit price. The stop price is the price that triggers the limit order, and the limit price is the limit price of the triggered limit order. This means that once your stop price has been reached, your limit order will be immediately placed on the order book.

Although the stop and limit prices can be the same, this is not a requirement. In fact, you could set the stop price (trigger price) a bit higher than the limit price for sell orders or a bit lower than the limit price for buy orders. This could increase the chances of your limit order filling after reaching the stop price.

Similar to a stop-limit order, a stop market order uses a stop price as a trigger. However, when the stop price is reached, it triggers a market order instead.

A take-profit limit order is similar to a stop-limit order. It involves a trigger price, the price that triggers the order, and a limit price, the price of the limit order that is then added to the order book. The key difference between a stop-limit order and a take-profit limit order is that a take-profit limit order can only be used to reduce open positions.

A take-profit limit order can be a useful tool to manage risk and lock in profit at specified price levels. It can also be used in conjunction with other order types, such as stop-limit orders, allowing you to have more control over your positions.

Please note that these are not OCO orders. For example, if your stop-limit order is hit while you also have an active take-profit limit order, the take-profit limit order remains active until you manually cancel it. You can set a take-profit limit order under the option in the order entry field.

Similar to a take-profit limit order, a take-profit market order uses a stop price as a trigger. However, when the stop price is reached, it triggers a market order instead. You can set a take-profit market order under the Stop Market option in the order entry field.

A trailing stop order helps you lock in profits while limiting the potential losses on your open positions. For a long position, this means that the trailing stop will move up with the price if the price goes up.

However, if the price moves down, the trailing stop stops moving. If the price moves a specific percentage (called the callback rate) in the other direction, a sell order is issued. The same is true for a short position but in reverse. The trailing stop moves down with the market but stops moving if the market starts going up. If the price moves a specific percentage in the other direction, a buy order is issued.

The activation price is the price that triggers the trailing stop order. If you don’t specify the activation price, this will default to the current Last price or mark price. You can set which price it should use as a trigger at the bottom of the order entry field.

The callback rate is what determines the percentage amount the trailing stop will “trail” the price. So, if you set the callback rate to 1%, the trailing stop will keep following the price from a 1% distance if the trade is going in your direction. If the price moves more than 1% in the opposite direction of your trade, a buy or sell order is issued (depending on the direction of your trade).

You can find the calculator at the top of the order entry field. It allows you to calculate values before entering either a long or short position. You can adjust the leverage slider in each tab to use it as a basis for your calculations.

The calculator has three tabs:

A video tutorial is available here.

In Hedge mode, you can simultaneously hold long and short positions for a single contract. A trader may do this if they’re bullish on an asset long-term but bearish in the short term. With Hedge mode, your quick short positions won’t affect your long positions.

The default position mode is the One-Way mode. This means that you can’t open both long and short positions at the same time for a single contract. If you tried to do so, the positions would cancel each other out. If you want to use Hedge mode, you’ll need to enable it manually like so:

Please note that if you have open orders or positions, you won’t be able to adjust your position mode.

The funding rate makes sure that the price of a perpetual futures contract stays as close to the underlying asset’s (spot) price as possible. Essentially, traders are paying each other depending on their open positions. What dictates which side gets paid is determined by the difference between the perpetual futures price and the spot price.

When the funding rate is positive, longs pay shorts. When the funding rate is negative, shorts pay longs.

If you’d like to read more about how this process works, visit our What Are Perpetual Futures Contracts? guide.

So what does this mean for you? Well, depending on your open positions and the funding rates, you’ll either pay or receive funding payments. On Binance Futures, these funding payments are paid every 8 hours. You can check the time and the estimated Funding Rate of the next funding period at the top of the page, next to mark price.

If you’d like to check the previous funding rates for each contract, hover over and select .

When you use limit orders, you can set additional instructions along with your orders. On Binance Futures, these can either be post-only or time-in-force (TIF) instructions, and they determine additional characteristics of your limit orders. You can access them at the bottom of the order entry field.Post-Only means your order will always be added to the order book first and will never execute against an existing order in the order book. This is useful if you would only like to pay maker fees.

TIF instructions allow you to specify how long your orders will remain active before they are executed or expire. You can select one of these options for TIF instructions:

When you’re in One-Way mode, ticking will ensure that the new orders you set will only decrease and never increase your currently open positions.

Liquidation happens when your margin balance falls below the required maintenance margin. The margin balance is the balance of your Binance Futures account, including your unrealized PnL (Profit and Loss). So, your profits and losses will cause the margin balance value to change. If you’re using Cross Margin mode, this balance will be shared across all your positions. If you’re using Isolated Margin mode, this balance can be allocated to each individual position.

The maintenance margin is the minimum value you need to keep your positions open. It varies according to the size of your positions. Larger positions require a higher maintenance margin.

You can check your current margin ratio in the bottom right corner. If your margin ratio reaches 100%, your positions will be liquidated.

When liquidation happens, all of your open orders are canceled. Ideally, you should keep track of your positions to avoid auto-liquidation, which comes with an additional fee. If your position is close to being liquidated, consider manually closing the position instead of waiting for the auto-liquidation.

When a trader’s account size goes below zero, the Insurance Fund covers the losses. However, in some exceptionally volatile market environments, the Insurance Fund may be unable to handle the losses, and open positions must be reduced to cover them. This means that in times like these, your open positions can also be at risk of being reduced.

The order of these position reductions is determined by a queue, where the most profitable and the highest leveraged traders are at the front of the queue. You can check your current position in the queue by hovering over in the .

Traditional futures contracts are derivatives that give traders the obligation to buy or sell an asset in the future. But unlike traditional futures contracts, perpetual futures contracts don’t have a settlement date. Still, derivatives can be confusing for inexperienced traders, so it’s crucial to understand how these contracts work before taking financial risks. As mentioned, you can access the Binance Futures testnet to test the platform without risking real funds.

Risk Warning: Digital asset prices can be volatile. The value of your investment can go down or up, and you may not get back the amount invested. You are solely responsible for your investment decisions, and Binance is not liable for any losses you may incur. Futures trading, in particular, is subject to high market risk and price volatility. All of your margin balance may be liquidated in the event of adverse price movement. Past performance is not a reliable predictor of future performance. Before trading, you should make an independent assessment of the appropriateness of the transaction in light of your own objectives and circumstances, including the risks and potential benefits. Consult your own advisers where appropriate. This information should not be construed as financial or investment advice. To learn more about how to protect yourself, visit our Responsible Trading page. For more information, see our Terms of Use and Risk Warning.

Gulika Taneja
Personal Assistant