How To Trade Crypto Futures on Binance
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How To Trade Crypto Futures on Binance

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7 months ago

Learn how to trade perpetual contracts, quarterly contracts, options and more on Binance Futures — the leading crypto derivative platform by trading volume.

How To Trade Crypto Futures on Binance

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Featuring market-leading trading volume and order book depth, as well as one of the largest selections of derivatives products, Binance is a popular choice among futures traders.

Despite the seeming complexity of some derivative products, Binance features an intuitive user interface that gives users the opportunity to keep their trades simple or execute more advanced order types.

Here, we’ll dive into Binance’s derivatives exchange and explore how you can get started trading perpetual futures on the platform.

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What Is Binance?

Currently the largest cryptocurrency exchange by user base and trading volume, Binance is a feature-packed platform that provides access to a range of trading products and services for crypto users.
By far the platform’s most popular feature is its spot exchange, which allows users to spot trade over 350 crypto assets across well over 1,000 trading pairs. Other popular offerings include its margin trading platform, Binance launchpad and staking feature.

Also read: Binance Launchpad vs Binance Launchpool

In recent years, Binance has also risen to become the premiere derivatives exchange platform — reaching a market share of 57% in June 2023. At the time of writing, the platform clocked in at almost 1.15M BTC (roughly $35B) in 24-hour derivatives trading volume across USD-M Futures, and over 101.3K BTC (around $3B) in COIN-M Futures.

Today, the Binance derivatives exchange supports a range of derivative types, including options, leveraged tokens, as well as fixed-expiry and perpetual futures; with trading options catering to both retail and professional traders.

Click here to see the top derivatives exchanges by trading volume, fees, open interest, and more.

Perpetual (Perps) Trading on Binance

Due in part to their flexibility and efficiency, Binance’s perpetual futures products count among its most popular offerings, and the platform now offers over 240 perps pairs for trading.

Binance perpetual futures are linear-margined futures contracts that can be settled at any time. They provide traders with a simple way to bet on the direction of a market without the additional considerations that come with traditional futures — like fixed expiry dates and delivery of the underlying asset.

This feature makes Binance's perpetual futures a favorite tool for both short-term traders looking to capitalize on price volatility and long-term investors seeking hedging strategies.

Binance is popular among derivatives traders thanks to its deep liquidity and extensive range of derivatives on offer. It is one of the few platforms to offer both fixed-expiry and perpetual futures, as well as call and put options.

Like most futures exchanges, Binance allows users to trade perps with leverage, offering up to 125x leverage on some contracts — with both cross and isolated margin options.

How to Trade Perps on Binance

Step 1: To begin trading perpetual futures on Binance, you'll first need to open a futures account or log in to your pre-existing account.

Depending on your region, you may need to complete KYC steps to verify your account before you can begin trading.

Step 2: Once registered and logged in, you’ll need to fund your derivatives account.

To do so, you must deposit cryptocurrency to your wallet and then use the transfer tool to move your balance from the default fiat and spot wallet to the USD(S)-M or COIN-M futures wallet.

Step 3: With your futures account now loaded, you’re reading to begin trading.

Head over to the Binance derivatives platform and select the type of product you want to trade from the range of options.
From here, use the selector on the top left to either search for the market you wish to enter or scroll down to find it in the list. Click on it to open the trading interface. USD margined futures simply means collateral used is a USD-pegged stablecoin, in this case, USDT and BUSD. Meanwhile, COIN margined futures use crypto assets as collateral, such as BTC and ETH.

Step 4: With the trading interface now open, you can then go long or short on the asset using the order panel.

Set your order size, entry price and other parameters using the relevant fields, and click the Buy/Long button if you believe the price will go up, or Sell/Short if you believe the price will go down.

Be sure to double-check your leverage parameters before posting your order — higher leverage comes with a higher chance of liquidation.

Market orders will execute immediately whereas limit orders will trigger if/when the specified conditions are met.

Step 5: Once your order is filled, you’ll then need to either manually close it using a market order, or set a limit close order to lock in your profits or losses.

Like many derivatives exchanges, Binance uses the index price and moving average (MA) basis to calculate the mark price. This helps to mitigate the impact of price volatility and ensures safer trading for users.

How To Trade Futures Delivery (Quarterly) Contracts on Binance

USD-margined quarterly contracts are settled in USDT and offer contracts for BTC and ETH. For instance, the “BTCUSDT 230929,” also shown as “BTCUSDT Quarterly 0929,” will expire on Sept. 29, 2023.

Meanwhile, COIN margined quarterly contracts offer more crypto assets and dates. For instance, the “ETHUSD CM 231229” or “ETHUSD CM Quarterly 1229” indicates that the expiration date is on Dec. 29, 2023.

1. To trade quarterly contracts on Binance, go to Binance Futures and click “USDⓈ-M” or “COIN-M.”

2. Click on “USDT Delivery” or “COIN-M Delivery” respectively.

3. Select the contract you would like to trade. This would enter into the contract page, where you can place your order.

How To Trade Options on Binance

1. Hover on “Options” at the top navigation bar, and select the Option contract you would like to trade in the dropdown menu

2. For instance, let’s take a look at BTC Options expiring on 2023-07-12

3. To buy or sell a call option, click on the row corresponding to the desired strike price under the “Calls” section on the left.

4. To buy or sell a put option, click on the row corresponding to the desired strike price under the “Puts” section on the right.

5. Place your order in the trading panel on the right by selecting the order type, price and amount.

How Much Are Futures Trading Fees on Binance

Binance features a tier-based fee schedule for its futures products, providing fee discounts for traders that meet trading volume quotas and/or hold more than a specific amount of BNB Coin (BNB).

The fee schedule for Binance's USD(S)-Margined futures is as follows:

Trading fees are always lower for BUSD-margined perps. Starting at 0.012% and 0.03% for regular user-tier makers and takers respectively, but falling to as low as -0.01% and 0.0207% respectively for VIP 9 users.

Note that negative figures indicate a fee rebate.

Traders will also be subject to the funding rate, which is displayed in the contract specifications for each perp — this is typically around 0.01% per funding period.

List of Restricted Countries for Futures Trading on Binance

Like most cryptocurrency derivatives exchanges, Binance is unable to offer derivatives trading features in regions where derivatives are banned or where it doesn’t have a license to offer this kind of financial service.

In total, Binance supports users from over 100 countries. Users in countries not listed on Binance's country/region selector will be unable to trade derivatives on the platform.

Some of the countries currently restricted from trading futures products on Binance include China, the United States, Germany, the United Kingdom, Canada, South Korea and Iran.

Note that this list is updated regularly, we recommend checking the official country/region selector tool to see if your country is supported.

Do I Need KYC To Trade on Binance?

All users will need to complete basic verification to be able to use Binance products and services. The know-your-customer (KYC) process includes entering your personal information, uploading ID documents and completing facial recognition. For more information, refer here.
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