BINANCE FUTURES: THE FUTURES ARE HERE AND ARE IN OUR HANDS

The Mystery of Binance Future Trading

Today I will be talking about one of those products offered by the Binance platform. I am referring to futures contracts.

I will talk in detail about how leveraged cryptocurrency trading option works, both its pros and cons.

I hope it is helpful for those who want to try the platform.

As long as futures have been in being for almost 100 years, crypto futures trading started a few years ago, towards the end of 2017. Many companies that serve as exchanges have expressed interest in crypto futures since they emerged.

Apart from being a prominent and most traded cryptocurrency derivatives, futures include many long-established derivatives.

Usually, people mistake futures with possibilities. So, to trade in futures, investors must make sure they acquire the inevitable knowledge behind futures trading, including its risks.

What are Crypto Futures?

The future of crypto allows traders to gain more exposure to digital currencies without possessing the actual cryptocurrency.

The concept is very similar to stock indices or futures contracts including commodities, where an investor can partake risks on an asset’s future value. The future of crypto contracts derives its value from distinguishing cryptocurrencies such as Bitcoin or Ethereum. Also, you do not obtain any digital assets when trading futures. When the crypto futures contract expires, the trader is expected to use cash in crypto.

The domination part of crypto futures trading is that it secures adverse price changes and excessive price movements of cryptocurrencies. The high price movement of digital currencies allows traders to purchase the assets when they are low and put them on sale when they high.

The futures of the crypto are tradeable and easy on derivative trading platforms like Binance Futures. Like spot trading, crypto futures trade 24/7 daily, seven days a week.

Because of the high volatility related to derivatives trading, traders must maintain risks cautiously, and it’s highly imperative to understand the fundamental basics of crypto futures before investing.

How Do Crypto Futures Work?

While digital assets are met with various and uncommon requests, from high volatility to adverse publicity in some states, some traders use this volatility to their support.

The most essential thing to regard in crypto futures trading is that you only take chances on the price fluctuations without holding the exact cryptocurrency.

Let reflect on a simplified example. Suppose Israel and Isinmi joined a Bitcoin futures position at $50,000 each. In this situation, Israel has a long position while Isinmi held on to a contrary trade. Upon expiration, the Bitcoin futures price completed at $55,000 for each contract. In this situation, Isinmi, who is retaining a losing position, will have to pay the exchange the shortage loss ($55,000-$50,000 = $5,000). Israel, on the other hand, will gain a profit of $5,000 from the exchange.

Basic Concepts of Crypto Futures Trading
Potential merchants require to familiarize themselves with crucial ideas to become experts in crypto futures. Being knowledgeable of these concepts will fascinate you closer to becoming an expert trader. The complexities behind dealing in crypto futures require significant dedication to learning the basics, including how others influence each trade.

What is Binance future?

Binance Futures is a section of the Binance exchange and permits users to trade futures contracts for a series of cryptocurrencies.

A cryptocurrency futures contract describes an agreement to buy or sell digital currencies at a determined price and rate on a particular day in the future. In a futures contract, buyers assume the responsibility to buy the cryptocurrency-related with the contract, while sellers assume the responsibility to produce the appropriate cryptocurrency asset upon the closing of the contract.

For several traders, these contracts offer enhanced access to popular market quarters as well as novel ways of speculating on a future price, beyond regular spot markets. Binance Futures contracts are created to implement high standards of quality and performance for investors contemplating the value of cryptocurrency assets.

Pros & Cons of Trading Futures
Profitable attempts such as futures trading come with their lovely share of benefits and losses. Included are the pros and cons of exchanging these derivatives.

Pros
Crypto trading futures enables one to bet against the market. For example, one can benefit from both increase in crypto asset value and its reduction.

Crypto futures offer support on capital. This is favourable as traders can earn significant exposure to an asset with only a part of its entire cost. Consequently, leverage trading is the most engaging aspect of futures trading.

It allows for hedging. It is a perfect decision when it comes to hedging your portfolio.

Cons
Volatility: The high volatility can be a benefit or misery to traders. Defining the market’s progress is not a guarantee.

Highly risky: Due to this high leverage involved, crypto futures is one of the most dangerous trading instruments. Neophyte traders should reduce their exposure to futures trading and trade them with a strong risk management approach.

How to Trade Futures Contracts on Binance?
Trading futures contracts on Binance is moderately straightforward. If you happen to be an existing Binance user, you can get started with futures trading within seconds.

To begin:

Initiate futures trading account on Binance. Make sure you enable a 2FA verification to finance your futures account before you begin trading on Binance Futures.

Deposit funds in BUSD, USDT, or cryptocurrencies supported by Binance Futures. Binance Futures that is supported by a wide range of crypto assets to deposits.

Choose your preferred futures contract. There are two kinds of futures contracts available on Binance: USDⓈ-M Futures and COIN-M Futures. For example, if you want to trade BTCUSDT perpetual contracts, please choose USDⓈ-M Futures. For BTCUSD coin-margined contracts, choose COIN-M Futures.

Choose the suitable leverage for your futures contract.

Place orders according to each various order type available on Binance Futures. For beginners, you can choose a buy-limit or buy-market order to acquire for your first futures contract.

Risks to trading on Binance Futures
Dealing with cryptocurrencies including a history of extreme volatility will constantly carry a specific level of risk that might not be present with extra popular asset classes (such as stocks or bonds). Nevertheless, the Binance Futures platform grants higher execution levels that can assist traders to protect against slippage in fast-moving markets.

Additional risks can be observed in the amount of leverage allowed by the platform (up to 125x), but risk-averse traders constantly have the option to evade using leverage at any time. Overall, the Binance Futures platform allows a highly reliable trading system including fast execution rates. These factors help reduce many of the platform's risks compared to many of its competitors.

Conclusion
Derivatives such as futures enable traders to predict future asset prices. Now, many exchanges allow futures trading. Being conversant with the basics of futures trade assists you attain a great height in this business. Futures trading can be profitable if you have the conventional knowledge and risk management procedures to evade outsized losses. Thus, you should strategize and do proper diligence before trading futures and know both their support as well as their risks.

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