Binance Futures: an overview of futures trading on a cryptocurrency exchange

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Binance Futures (Binance Futures) is a section of the Binance exchange, which is a platform for trading futures (contracts calculated for a future date). At the same time, traders do not buy or sell cryptocurrency directly, but the calculation of unrealized profits and losses occurs. A contract is a commodity, financial relations for which will not be settled right now, but in the future.

Website: binance.com/ru/futures/

Other futures exchanges for cryptocurrency derivatives trading: FTX, Bitmex, Bybit, Currency, Huobi, BaseFex, PrimeXBT, StormGain.

Futures prices differ from spot market rates as they include additional costs (storage and profitability). Binance uses a financing rate system that ensures the convergence of prices between spot and futures over the long term. However, in the short term, there may be a significant difference in cost.

We recommend using bots to automate trading. For example, the RevenueBot bot works with Futures USD-T and Coin-M.

General information

NameBinance Futures 
Official sitehttps://www.binance.com/ru/futures/
Russian languageYes
Year of foundation2019
Country of registrationMalta
CompanyBinance
CEOChangpeng Zhao
TypeCentralized
Trade typesPerpetual contracts
Exchange tokenBNB
Trading commissiontaker from 0.017 to 0.04%, maker from 0 to 0.02%, depending on the trading volume
Refinancing Intervalevery 8 hours
Working with fiat moneyNo
VerificationNot required
ContractsBTC/USDT, ETH/USDT, XRP/USDT, ETC/USDT и т.д., всего около 25 шт
Types of ordersлимит ордер, маркет ордер, стоп-лимит, стоп-маркет
Margin tradingYes
Maximum leverage125х
Minimum initial margin rate0,8%
Maintenance margin minimum rate0,4%
Cross margin tradingyes
Test platformhttps://testnet.binancefuture.com/ru/futures/BTCUSDT
Contactssupport.binance.com

Perpetual contract specification

Under the BTC / USDT futures contract, bitcoin can be traded in the same way as in the spot market, the price is calculated in the same way. Binance Futures uses traditional contracts, not reverse contracts. The table shows the specifications of the futures supported on the exchange:

Registration and creation of a futures account

To trade on Binance Futures, you first need to create an account at binance.com/en/futures/ of the Binance exchange, if you have not already created one. To do this, click the “Register” button on the main page.

And fill in the required fields. In the Futures Referral ID field, enter binance10back to get a 10% discount on trading commissions.

Then confirm your email address.

Account verification is not required to trade Binance futures. But please note that you need to enable two-factor authentication in the settings before creating a futures account.

Once logged into your account, go to the Futures page and click “Open Now” in the lower right corner.

This is all you need to activate your futures account on the Binance exchange.

How to top up your balance

To start trading on the Binance Futures platform, you will need to transfer funds from the main exchange wallet to the futures wallet. For this:

  1. Click on the “Transfer” button next to the fields for creating orders.
  1. And enter the desired amount in USDT or BNB, then click “Confirm Transfer”. In exactly the same way, it will subsequently be possible to transfer funds back by swapping the spot and futures wallet. No commission is charged.
  1. The available balance is immediately displayed in the orders section and can be used for trading.

If the spot wallet does not have the required coins, then instead of Transfer, click Deposit. On the new page, select the cryptocurrency to enter. Next, exchange them for USDT or BNB and transfer them to your futures wallet.

You can buy cryptocurrency for fiat in exchangers, on crypto-exchanges or p2p-exchangers.

Trading instruction

The following order types can be created on Binance Futures:

✅  Limit order. Allows you to place an order with a specific value. It will be executed only when the rate matches the specified cost. To create a limit order, you need to enter the desired price and amount of cryptocurrency to buy or sell, then confirm the creation of the order by clicking the Buy / Long or Sell / Short buttons.

✅  Market (market) order. Upon placement, instantly executed at the best available price. To create it, you only need to enter the amount of cryptocurrency and click “Buy / Long” in the confirmation window.

✅  Stop limit and stop limit. Such an order is a transaction that is valid for a specified period of time under certain conditions. The main condition: stop price – when it is reached, the order is converted to a limit and executed. When placing a stop-limit order, you need to enter the limit price and the amount of cryptocurrency, then click “Sell / Short” in the confirmation window.

In addition, Binance Futures offers leverage between 20x and 125x. The maximum leverage is determined based on the value of the position (the higher the position, the lower the allowable leverage).

For BTCUSDT perpetual contract:

For ETH / USDT, BCH / USDT, XRP / USDT, EOS / USDT, LTC / USDT, TRX / USDT, ETC / USDT, LINK / USDT, XLM / USDT, ADA / USDT, XMR / USDT:

For other contracts:

If the trader has not chosen any leverage, then by default it is set at 20x. Before opening a position, the system automatically determines and displays its maximum possible volume based on the set leverage.

Maintenance margin is always calculated in the same way regardless of leverage, based on the principle of progressive taxation. In most cases, the maintenance margin is well below half of the initial margin, so the liquidation price is more profitable than on other exchanges, where the maintenance margin is usually 50% of the initial margin.

Trade example

A quick BTC purchase on Binance Futures through a market order looks like this:

  1. Enter the desired amount and click Buy / Long.
  1. Confirm Action

Information about the completed operation will appear in the list of orders:

When you see fit, you can click on the selected position “Limit” or “Market” to close the position with a profit.

By clicking on the tabs in this section, you can view information about your trade:

✅  Positions. List of positions and information about them – volume, price, marking price, liquidation price, margin ratio, margin, ROE, ADL, position closing buttons by limit or by market.

✅  Margin balance. Data on the state of the wallet’s margin balance for USDT and BNB.

✅  List of open orders and information about their filling.

✅  History of orders for a day, week, month or three months.

✅  Trade history for a day, week, month or three months.

✅  The history of transactions, their types and assets used.

✅  The last tab contains API keys and documentation.

Testnet and its use

Binance also launched a test platform, a kind of futures trading simulator where you can practice without threatening real money. It is located at https://testnet.binancefuture.com/en/futures/BTCUSDT.

To work, you need to create a separate account. Click the “Register” button in the upper right corner.

Enter your email, password that meets the specified conditions, and confirm that you are over 18 years old. Click “Create Account”.

Solve the captcha and confirm your email.

Enter your previously created username and password. After logging into your account, you will see 100,000 USDT on your account, which you can fully “dispose of” to simulate trading.

Commissions

Commissions when trading on Binance Futures depend on the user level, and this, in turn, on the trading volume for 30 days and the BNB balance.

VIP 0 (users whose balance is up to 50 BNB or who traded less than 250 BTC in a month) pay the following commission – 0.02% maker and 0.04% taker. As these indicators increase, the commission decreases. At the VIP 9 level (turnover in 30 days more than 750,000 BTC and more than 11,000 BNB on the balance), the commission for the maker is zero, and for the taker is 0.017%.

VIP status in the futures market corresponds to VIP status in the spot market. Commissions are slightly lower than on the spot market, and the requirements are five times higher – the leverage provided is taken into account.

Advantages and disadvantages

Pros:

✅  The product is owned by the industry leader Binance.

✅  Many contracts to trade.

✅  High liquidity.

✅  Leverage up to 125x.

✅  Instant replenishment of the balance from the main account.

✅  There is a test network (demo account).

✅  Low commissions, discounts as you level up your account.

✅  There is a special fund for the safety of user funds.

✅  Detailed help and competent support.

Cons:

❌  You can only fund your futures account in USDT and BNB.

Conclusion

Binance Futures has no particularly significant drawbacks, which is not surprising – the creators of Binance have long proven themselves as specialists who understand the essence of the crypto market and know what traders need. The site offers full functionality for trading perpetual contracts. You can always try your hand at the free testnet.

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