Binance, Exchanges

Does Binance Allow Margin Trading?

Binance, one of the world’s largest cryptocurrency exchanges by trading volume, does not currently offer margin trading. This may come as a surprise to some, as other major exchanges such as Coinbase’s GDAX, Kraken, and Bitfinex all offer margin trading. So why doesn’t Binance?

The answer likely has to do with Binance’s relatively young age. The exchange only launched in July of 2017 and has since become the largest crypto exchange in the world.

It is possible that Binance will eventually offer margin trading, but it has not done so yet.

This is not to say that traders cannot use leverage when trading on Binance. There are a few ways to do this.

NOTE: Warning: Binance does not allow margin trading and investors should not attempt to engage in margin trading on the platform. Margin trading involves a high degree of risk and is not suitable for all investors. Investors should make sure they understand the risks associated with margin trading before attempting to engage in it.

One is to simply buy more of a coin than you would normally purchase in a single trade. For example, if you wanted to trade with 2x leverage, you could simply buy twice the amount of coin that you would normally trade.

Another way to get leverage is to use derivatives such as futures contracts or options. These can be traded on other exchanges that offer such products.

Then, the positions can be closed out on Binance when profitable. This does require more advanced knowledge of trading, however.

So for now, Binance does not offer margin trading directly on the exchange. However, there are still ways for traders to get exposure to leverage if they want it.

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