Futures contracts are one of the most popular instruments in the cryptocurrency world. By definition, a futures contract is an agreement to buy or sell an asset at a predetermined price at a later date.
In the cryptocurrency world, futures contracts are mostly used for trading Bitcoin and other major cryptocurrencies. In this article, we will show you how to trade futures contracts on Binance.
Before we get started, let’s first take a look at the benefits of trading futures contracts:
Benefits of Trading Futures Contracts
1) Leverage: Futures contracts are traded with leverage. This means that you can trade with more money than you have in your account. For example, if you have 1 BTC in your account and you trade with 5x leverage, you are effectively trading with 5 BTC.
Leverage can be a great tool to increase your profits, but it can also magnify your losses. So, be careful when using leverage.
2) Low fees: Futures contracts are traded on exchanges that offer low fees. For example, Binance charges a 0.075% taker fee and a 0.
025% maker fee for trading futures contracts. Compare this to the fees charged by traditional stock exchanges and you will see that the fees are much lower.
3) High liquidity: Futures contracts are very liquid instruments. This means that it is easy to buy and sell futures contracts without affecting the price too much.
For example, if you want to buy 1 BTC worth of Ethereum futures contracts, you can do so without affecting the price of Ethereum too much.
4) 24/7 trading: Cryptocurrency markets never close. This means that you can trade cryptocurrency futures contracts 24 hours a day, 7 days a week.
Now that we know the benefits of trading futures contracts, let’s take a look at how to do it on Binance.
How to Trade Futures Contracts on Binance?
1) Sign up for an account on Binance: The first thing you need to do is sign up for an account on Binance. You can do so by going to their website and filling out the registration form.
2) Verify your account: Once you have registered for an account, you will need to verify your identity before you can start trading. To do this, go to the “Account” tab and click on “Verify Identity”.
You will need to upload a photo ID and a selfie holding your ID. Once your identity has been verified, you will be able to trade cryptocurrency futures contracts on Binance.
3) Deposit funds into your account: Before you can start trading, you will need to deposit some funds into your account. To do this, go to the “Funds” tab and click on “Deposit”.
You will then be shown all the available deposit methods for your country. Choose the one that is best for you and follow the instructions to deposit funds into your account.
4) Start trading: Once you have deposited funds into your account, you are ready to start trading cryptocurrency futures contracts on Binance! To do this, go to the “Exchange” tab and select “Futures” from the drop-down menu. You will then be shown all the available futures markets on Binance. Choose the market that you want to trade and start placing orders!.