Binance Futures Trading
Binance Futures is another innovation from Binance, the leading crypto exchange platform in terms of trading volume. Through this platform, traders can use leverage to open both long and short positions so that you could effectively maximize your opportunities for profitable returns and hedge your positions to lower your risks when markets go down.
What are Binance Futures?
In traditional investment, futures are derivative financial contracts that obligate both the buyer and the seller to transact a particular asset at a predetermined price and at a specified time in the future. Futures are also called futures contracts because of their essential nature of being an obligatory legal agreement that binds both parties to fulfill the transaction’s agreed terms regardless of the current market conditions or the prevailing market price of an asset.
Futures can be used for different trading types of assets, but the most common in the traditional investment industry is oil. Oil producers (sellers) and airline companies (buyers) usually engage in futures contracts to lock in the price by which the oil producers will sell oil and the rate by which the airline companies will buy it. Through futures contracts, both parties get into a mutual advantage because they can sell off or purchase an asset at a rate they desire the most in the future. For the producer, this means that he could sell at a profit even if the oil market goes down. Meanwhile, the buyer also benefits from this because he could purchase oil at a rate within the company’s planned expenditures.
Futures are now no longer limited to oil, gold, commodities, or traditional currencies. The cryptocurrency market is gradually embracing this relatively new type of digital financial product in response to the public’s growing need for risk abatement and speculative exposure.
Instead of dealing with traditional assets like oil and gold, crypto futures deal with digital tokens or cryptocurrencies like Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, and more.
Crypto futures are considered as derivative products and also take the same nature as an obligatory contract. Bitcoin futures or crypto futures allow investors to speculate on the future price of Bitcoin and other cryptocurrencies. For some people, they liken crypto futures trading to betting. You speculate Bitcoin price in the future to take either a long or short position depending on your bet.
With cryptocurrency futures, you can create transactions in the future that are based on predetermined terms such as a pre-identified trading date and a pre-established crypto-asset price, in order to achieve this we recommend finding the best cryptocurrency app that feats your needs.
Binance Futures Benefits
Every financial product introduced to the market has exciting benefits that entice certain types of investors and players. Here are some of the key advantages of trading cryptocurrency futures:
1. Binance futures trading can let you hedge price risks and mitigate potential losses.
Hedging is a portfolio protection strategy that involves taking risk management decisions and actions geared towards offsetting possible losses. Traders usually do this by opening trades to maintain their crypto holdings while creating a neutral exposure. Although hedging can effectively minimize your risks and prevent your losses, it could also limit your potential profits.
2.Trading cryptocurrency futures lets you be part of the crypto market movement through speculation.
By taking part in the cryptocurrency futures trading industry, you also play an active role in affecting crypto markets' future direction. It’s like letting your opinions be heard in the crypto trading sphere. Some analysts even consider futures activity as a significant driver of Bitcoin price and directionality.
How you speculate the direction of cryptocurrency markets in the future will be the foundation of your trading decisions. If you think that the price of Bitcoin could reach the heights of the moon, then you could take on long positions to exponentially multiply your profits. But if you think that a specific coin such as Ethereum would go down in the future, you could take short positions on Ethereum futures.
3.Binance futures allow you to leverage the power of assets that you do not own yet.
Cryptocurrency futures trading allows leveraging or the use of borrowed capital for investment. Traders and investors use leveraging to multiply their buying power and to expand their asset base.
With cryptocurrency futures, you can enter trading positions that are larger than your account balance. This allows you to take advantage of profitable opportunities even when you do not hold the entirety of funds required to cover such an investment risk.
Why Binance Futures Trading Platform?
With the growing demand for crypto futures as an alternative financial instrument, spot exchanges have started to develop a separate futures trading platform to open more opportunities to their traders. One of the best cryptocurrency futures trading platforms right now is Binance.
Here are some reasons why you should consider Binance Futures:
1. Binance is the Fastest-Growing Crypto Derivative Exchange by Trading Volume
Binance is undeniably experiencing unprecedented growth in its trading volumes, most especially in its futures platform. In Q2 2020, Binance Futures has seen a 68% increase in its trading volume compared with Q1. The figures have gone up from only $157 billion in the first quarter to $263 billion in the second quarter of this year.
2. Binance Lets You Trade Bitcoin Futures and Other Crypto Derivatives with Up to 125x Leverage
With such huge leverage, Binance Futures traders can enter higher positions than their exchange account balance. Through this, investors can get into profitable positions without being intensive on crypto capital.
Let’s say that the current price of BTC is 10,000 USDT. If you only have a hundred USDT, then that allows you to purchase only 0.01 BTC on a spot exchange. But if you bring your 100 USDT to Binance Futures, using 125x leverage, you can open a long position or short position of as much as 1.25 BTC.
With leverage, you are given a higher chance of getting more significant profits than if you settled on trading at your current capacity. However, you have to be cautious when trading with leverage. Always remember that high rewards usually come along with high risks.
Sustainable Crypto Futures Trading
Futures vs Spot?
Spot Trading or Futures Trading on the Binance Exchange - No Need to Choose Between the Two
Cryptocurrency spot trading is different from crypto futures trading. In a futures market, trades are not settled on the spot, meaning that transactions do not happen instantly.
The question of which is better - spot trading or futures trading - cannot be answered categorically. Neither should you choose between the two because you can take part in both spot exchange and crypto futures markets for the most optimum portfolio-building strategy.
The beauty of using Binance is that it offers a seamless transition from the Binance spot exchange to Binance Futures platform.
Best Futures Crypto Platform
Altrady is a multi-exchange cryptocurrency trading platform that allows you to trade on different exchange accounts using a single platform. Through this innovation, traders are given the convenience and simplicity to bring their crypto trading journey to the next level.
With Altrady, you can easily manage your trades and keep track of your portfolios even if your trading activities and assets are spread across different crypto exchanges including, Binance Futures.
Connect your Binance Futures account to Altrady now for a smarter and easier crypto trading experience using a perfect market depth chart.