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10 Most Frequently Asked Questions About Binance Futures

2022-08-08

Key Takeaways:

  • Binance Futures has gathered the 10 most frequently asked questions about the trading platform to help traders have a better understanding.

  • These questions have to deal with liquidation, leverage, stop-loss orders, and many more. 

  • Users can reach out to our customer support team or visit Binance Academy for more information about Binance Futures. 

Crypto derivatives trading is gaining a lot of popularity among market participants worldwide. Hundreds and hundreds of traders are joining Binance Futures every day to take advantage of the opportunities that cryptocurrencies offer. With more than 29 million active users, many questions arise about how to trade on the leading crypto derivatives exchange. 

Binance Futures offers access to the cryptocurrency markets 24/7/365. Given the versatility that traders have to trade digital assets anytime and anywhere with the Binance app, many users have reached out to us to ask how to use the world’s leading crypto derivatives exchange by trading volume. 

So, we have created this blog post to answer the “10 Most Frequently Asked Questions About Binance Futures.” 

1. Why Can’t I Transfer the Available Margin From My Futures Wallet?

On Binance Futures, users can only transfer the available margin for an order but no more than the wallet balance.

For Single-Asset Mode in USDⓈ-M Futures: 

Available for withdrawal=max( min(

  1. walletBalance - ∑isolated open order initial margin - crossPosition MM - borrowed amount - Interest - futuresPositionLimitOverdueFee,

  2. crossWalletBalance - ∑isolated open order initial margin - crossPosition MM - borrowed amount - Interest - futuresPositionLimitOverdueFee, 

  3. crossWalletBalance + ∑cross Unrealized PNL - ∑cross initial margin - ∑isolated open order initial margin - borrowed amount - Interest- futuresPositionLimitOverdueFee, 

  4. crossWalletBalance - ∑isolated open order initial margin - crossPosition MM - gift money amount - min (0, ∑realized PNL) - borrowed amount - Interest - futuresPositionLimitOverdueFee

), 0 )

For Multi-Asset Mode in USDⓈ-M Futures:

Availabe for withdrawal=max( min(

  1. accountWalletBalance - accountMM - ∑(borrowed amount + Interest + futuresPositionLimitOverdueFee)*askRate,

  2. uniAvailableForOrder - ∑(borrowed amount + Interest + futuresPositionLimitOverdueFee)*askRate, 

  3. accountWalletBalance - accountMM - ∑(gift money amount + min (0, ∑(asset) realized PNL) + borrowed amount + Interest + futuresPositionLimitOverdueFee)*askRate

), 0 )

For Coin-M Futures:

Availabe for withdrawal=max( min(

  1. walletBalance - ∑isolated open order initial margin - crossPosition MM - borrowed amount - Interest,

  2. crossWalletBalance - ∑isolated open order initial margin - crossPosition MM - borrowed amount - Interest, 

  3. crossWalletBalance + ∑cross Unrealized PNL - ∑cross initial margin - ∑isolated open order initial margin - borrowed amount - Interest, 

  4. crossWalletBalance - ∑isolated open order initial margin - crossPosition MM - gift money amount - min (0, ∑realized PNL) - borrowed amount - Interest

), 0 )

2. Why Does the Liquidation Price Change?

On Binance Futures, changes in the wallet balance can affect the liquidation price

For instance, when a user has a position in USDⓈ-M and COIN-M Perpetual Futures, the settled funding fee could make the liquidation price favorable or unfavorable depending on the market conditions. 

For Multi-Asset Mode, the liquidation price may change more often than in Single-Asset Mode because it is calculated on the basis of all the collateral assets. As the price of the collateral assets changes, so does the liquidation price.

3. Why Can’t I Lower the Leverage on One of the Positions Under Isolated Margin Mode?

On Binance Futures, users can only increase the leverage in a position under Isolated Margin Mode, while lowering the leverage is not allowed.

4. Why Do I Have Sufficient Margin But Can't Increase the Size of a Position?

On Binance Futures, the position size and open orders that users are able to hold for the same symbol are defined in the Leverage and Margin tier table.  The larger the position a user wishes to trade, the lower the leverage is restricted. 

Please note that customized position limits are supported via our Position Limit Adjustment page.

5. Why Can’t the TP/SL Orders Close the Positions at the Given Prices?

On Binance Futures, TP/SL orders can be set up as limit orders and stop market orders. Both types of orders are triggered when the stop condition has been satisfied. But the filled price of  market orders fully depends on the market liquidity and depth because they represent a quick buy or sell action.

  • There are two types of trigger types for TP/SL orders: Mark Price and Last Price. The default trigger type is Mark Price, which means only if the Mark Price reaches the stop price the TP/SL order will be executed. The reason most TP/SL orders can’t be executed at a given price is due to the trigger type and the price users tracked being different.

  • The price protection mechanism can also affect TP/SL orders. When price protection is enabled, if the difference between the Last Price and the Mark Price of the contract exceeds the set threshold when the TP/SL orders reach the trigger price, the TP/SL orders will not be triggered.

  • The trading rules of maximum market order quantity are one of the reasons that can also cause the TP/SL orders to expire.

  • Market illiquidity can have a serious impact on TP/SL orders. Market orders may expire or be partially filled due to the Market Order Price Cap/Floor Ratio, which is prevalent in extremely illiquid market conditions. Once the Market Order Price Cap/Floor Ratio exceeds the threshold, any unfilled market orders will expire. 

6. Why Doesn’t the Limit Order Fill at the Preset Price?

The universal definition of a limit order is to buy or sell at a limited price or better. Given the definition, if the current Market Price is already better than the Limit Price set when the limit order is placed, the order will be fulfilled instantly.

Those who wish the limit order to only be triggered after a specific price is reached can consider a more advanced order type: Stop-Limit or Stop-Market Orders.  

7. Why Did the Stop-Limit Order Expire Even Though I Didn’t Cancel the Order?

On Binance Futures, if the stop-limit orders are placed to reduce holding positions, these can expire when: the user places a new order to close the position; doesn’t pass the second margin check; doesn't have a position under reduced only; or when the position is liquidated.

The difference between the order status of Cancelled and Expired is that Canceled Orders are canceled manually by the user, while Expired Orders are canceled by the system based on the conditions mentioned above.

8. Why Does Grid Trading Expire Even When I Have Enough Margin?

Grid Trading works within the parameters that users set for their Binance Futures accounts, so there are several reasons why the Grid Trading strategy can expire. Two of the main reasons a Grid Trading order can expire even when the user’s Futures wallet has enough margin are listed below:

  • Manually placing or canceling an order of the symbol in Grid Trading will end the grid.

  • When the user has set up a stop price and the market price reaches the set Grid Trading strategy stop-loss price, the grid will expire. 

9. Why Wasn’t the Stop-Limit Order Filled Even After the Stop-Price Order Was Triggered?

Stop-Limit orders are composed of two prices: the Stop-Price and Limit-Price. 

When the Stop-Price is reached, a Limit order with the preset Limit Price will be placed into the market. Still, the limit order may not be fulfilled. Since the Limit order will be executed when the market price is at or better than the preset Limit price, the Limit order cannot be fulfilled if the market price is worse than the Limit Price after the Stop Limit order gets triggered.

10. Why Does Liquidation Occur Even When I Have Unrealized Profits?

A liquidation is triggered when Margin Balance = Wallet Balance + Unrealized PnL < Maintenance Margin. 

All positions under Cross Margin Mode share the same Margin Balance. Therefore, if total unrealized losses erode Margin Balance to be lower than Maintenance Margin, this will still trigger a liquidation in the Cross Margin Mode Futures account even with portable positions. 

11. If My Isolated Position Got Bankrupted on Testnet, How Can I Clear Negative Balance?

On Binance Futures Testnet, if your isolated positions got bankrupted, you will need to clear the negative balance by adding margin. If you have enough assets in your account, you just need to click the button for adjusting the margin and adding margin. 

If you don’t have enough assets in the account, you can click the fault to add the assets first.

The Bottom Line

By answering these questions, we hope that you have a better understanding of how to use Binance Futures. 

Please, feel free to reach out to our customer support team if you have any other questions. You can also visit Binance Academy to learn more about trading on Binance Futures.  

Read the following helpful articles for more information about Binance Futures:

Disclaimer: Crypto assets are volatile products with a high risk of losing money quickly. Prices can fluctuate significantly on any given day. Due to these price fluctuations, your holdings may significantly increase or decrease in value at any given moment, resulting in a loss of all the capital you have invested in a transaction.

Therefore, you should not trade or invest money you cannot afford to lose. It is crucial that you fully understand the risks involved before deciding to trade with us in light of your financial resources, level of experience, and risk appetite. If required, you should seek advice from an independent financial advisor. The actual returns and losses experienced by you will vary depending on many factors, including, but not limited to, market behavior, market movement, and your trade size. Past performance is not a guide to future performance. The value of your investments may go up or down. Learn more here.