Binance is a cryptocurrency exchange that provides a platform for trading various cryptocurrencies. Binance Coin (BNB) is the native currency of the Binance platform.
Binance Futures is a derivative trading platform launched by Binance in September 2019.
Binance Futures allows users to trade digital assets with leverage. Leverage is a loan that is provided by a broker to a trader.
The trader then uses this loan to trade with, essentially magnifying their gains (or losses).
The maximum leverage ratio on Binance Futures is 125x. This means that for every $1 you have in your account, you can trade up to $125 worth of assets.
When you open a position on Binance Futures, you will need to put down a margin. The margin is the amount of money that you must have in your account to open and maintain the position.
For example, if you want to buy $100 worth of BTC with 5x leverage, you will need to put down $20 as margin ($100/5).
The margin level is the percentage of your account equity that is being used as margin. For example, if your account equity is $1000 and your margin is $100, then your margin level would be 10% ($100/$1000).
If your margin level falls below a certain percentage (this percentage varies from broker to broker), then your position will be liquidated. Liquidation occurs when your position is automatically closed by the broker in order to prevent further losses.
When this happens, you will lose all of the money that you have put up as margin.
It’s important to note that when you are trading with leverage, your profits (or losses) are magnified. This means that even small movements in price can result in large gains (or losses). Therefore, it’s important to always use stop-loss orders when trading with leverage.
A stop-loss order is an order that automatically closes your position if the price falls below a certain level. This helps to prevent further losses if the market turns against you.
So how does Binance Futures work? Essentially, it allows users to trade digital assets with leverage. Leverage is a loan that is provided by a broker to a trader and it allows them to magnify their gains (or losses). The maximum leverage ratio on Binance Futures is 125x.
This means that for every $1 you have in your account; you can trade up to $125 worth of assets. When you open a position on Binance Futures, you will need to put down a margin which acts as collateral for the loan that has been extended to you by the broker. If at any point your margin level falls below a certain percentage; your position will be liquidated in order to prevent further losses from occurring.