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Cross Margin Trading Rules

2020-03-26 08:59

1. General Provisions

1.1 For the purpose of regulating the margin trading and margin loans of digital assets, maintaining market order, and protecting the legitimate rights and interests of users, these rules are formulated in accordance with the principles of fairness, openness, and impartiality.
1.2 These rules are the benchmark basis for Binance's margin trading service, including borrowing loans, trading, and other related operations on the margin trading platform.
1.3 These Rules shall apply to Margin Loan and cross margin trading on Binance. Any matter for which there is no specific provision in these Rules shall be subject to the Binance Service Agreement and other relevant provisions of Binance.

2 Collateral Assets

2.1 Margin users can use the net assets in their cross margin account as collateral assets for cross margin trading.
2.2 The cryptos that can be traded in margin trading can be used as collateral assets for a cross margin account. For more details, please refer to the Margin Data page.
2.3 For the purpose of ensuring asset security, Binance has the right to adjust the range of collateral assets.

3 Margin Loan

3.1 All cryptos that can be traded in the margin trading can be borrowed in a cross margin account. For more details, please refer to the Margin Data page.
3.2 For the purpose of ensuring asset security, Binance reserves the right to adjust the range of borrowable assets.

4 Margin Loan Rules

4.1 The Maximum Amount of Single Margin Loan refers to the maximum amount of digital assets that can be borrowed by a single user for each crypto. The calculation of the Maximum Amount of Single Margin Loan will be subject to the pre-set maximum total amount of Cross Margin Loan allowed for the user and the Platform’s risk control rules.
In these Rules, the Maximum Margin Loan Amount = minimum value ([net assets in a Cross Margin Account * (maximum leverage-1) - outstanding Margin Loan], maximum amount for crypto borrowing limit).
4.2 After the successful advance of a Margin Loan when the borrowed digital assets are delivered to the User's Cross Margin Account, interest shall accrue on such Margin Loan immediately. The User may use the borrowed digital assets for cross margin trading in the permitted trading pairs.

5 Interest

5.1 Interest-calculation Rules: simple interest shall accrue on an hourly basis, if it is less than 1 hour, it will be counted as 1 hour. Interest is calculated once at the time of the successful advance of the relevant Margin Loan, it will be counted as 1 hour immediately after the borrowing is successful, and it will be counted as 2 hours after the next full hour.
The calculation formula: I (interest) = P (borrowed money) * R (daily interest/24) * T (in hours)
5.2 Users may repay their debts in advance, and shall pay the interest thereon according to the number of hours for which the assets are borrowed. In case of less than 1 hour, the loan time shall be deemed 1 hour. Repayment shall be deemed payment of interest first, and after interest is fully paid, repayment of the principal of the relevant Margin Loan.
5.3 Outstanding loan interest shall be included in the calculation of the Risk Ratio. Assuming that there is no deduction of interest, if there is any outstanding interest unpaid for a long time, the Risk Ratio of the User's Cross Margin Account may be reduced to a level below the Liquidation Line, leading to the risk of forced liquidation. In view of this, the Users are advised to pay interest regularly or deposit a sufficient balance in their margin accounts.
5.4 Users who use BNB to pay for the interest can enjoy a 5% discount. After enabling this function, all borrowing interest generated by the margin account will be displayed in the [Interest] column of BNB assets. If you borrow more than one currency, the interest on each loan will be calculated in BNB.
5.5 We may adjust the interest rate at any time. For the latest interest rate, please refer to the Margin Data page.
5.6 One-click Borrow: Users can use the One-click Borrow function on the margin trading page.

6 Repayment

6.1 Repayment rule 1: Users can manually select the loan assets to be repaid. When selecting the repayment amount, users can choose to repay all or part of the loan. The interest will be repaid first and then the principal. The system will calculate the interest based on the latest Margin Loan in the next hour.
6.2 Repayment rule 2: Depending on what assets the user borrows and what assets must be repaid, other assets cannot be used instead. Therefore, the user must ensure that there are sufficient such assets in the margin account when repaying.
6.3 One-click Repay rules: Users can use the One-click Repay function on the margin trading page. If you use this function to place the order, after the order is completely filled, the system will automatically use the funds you get by the order to repay the debt. Automatic repayment will only be done after the order is completely filled.
6.4 Convert small balance to BNB: Users can use the Binance Convert function to convert as many assets in one conversion as they wish. Unlisted/delisted tokens cannot be converted. Users can make one small balance conversion every 6 hours. The conversion value suggested by the system is just an estimation. The selected assets will be converted to BNB according to the current market price when users click [Confirm]. If the asset valuation is less than 0.00000001 BNB, it won’t be able to be converted to BNB. If there is a 5% (or greater) fluctuation during the conversion, for the benefit of our users, the conversion process will not proceed. Please try again later.

7 Risk Control

7.1 Users participating in Margin Loans may use the net assets in their Cross Margin Accounts in Binance as the Collateral, and the digital assets in any other accounts are not included in the Margin for cross margin trading.
7.2 Binance has the right to monitor the Margin Level of the Users’ Cross Margin Account on a real-time basis, and adopt corresponding measures in response to the fluctuation of the Margin Level.
In these Rules, the Margin Level of a Cross Margin Account = Total Asset Value of a Cross Margin Account/(Total Liabilities + Outstanding Interest), where:
Total Asset Value of a Cross Margin Account = current total market value of all digital assets in the Cross Margin Account
Total Liabilities = the current total market value of all outstanding Margin Loans in the Cross Margin Account
Outstanding Interest = the amount of each Margin Loan * the number of hours as loan time by the time of calculation * hourly interest rate - deduction/paid interest.
7.3 Margin level and related operation
  • Leverage 3x
When your margin level > 2, you can trade and borrow, and transfer assets to the exchange wallet;
When 1.5 < margin level ≤ 2, you can trade and borrow, but you can’t transfer funds out of your margin account;
When 1.3 < margin leve ≤ 1.5, you can trade, but you can’t borrow, neither transfer funds out of your margin account;
When 1.1 < margin level ≤ 1.3, our system will trigger a margin call and you will receive a notification through mail^, SMS^ and website to inform you to add more collateral (transfer in more collateral assets) to avoid the liquidation. After the first notification, the user will receive the notification per 24 natural hours.
When margin level ≤ 1.1, our system will trigger the liquidation engine and all assets will be liquidated to pay back the interest and loan. The system will send you a notification through mail^, SMS^ and website to inform you of that.
  • Leverage 5x (No longer supported since 2020/7/16)
When your margin level > 2, you can trade and borrow, and transfer assets to the spot wallet;
When 1.25 < margin level ≤ 2, you can trade and borrow, but you can’t transfer funds from your margin account to your exchange wallet;
When 1.15 < margin level ≤ 1.25, you can trade, but you can’t borrow, neither transfer funds from your margin account to your exchange wallet;
When 1.05 < margin level ≤ 1.15, our system will trigger a margin call and you will receive a notification through mail^, SMS^ and website to inform you to add more collateral (transfer in more collateral assets) to avoid the liquidation. After the first notification, the user will receive the notification per 24 natural hours.
When margin level ≤ 1.05, our system will trigger the liquidation engine and all assets will be liquidated to pay back the interest and loan. The system will send you a notification through mail^, SMS^ and website to inform you of that.
7.4 The Users shall pay due attention to the risks of margin trading and promptly adjust their position-holding ratio to avoid risks. All losses that arise out of or in connection with forced liquidation shall be borne exclusively by the User that owns the relevant Margin Account, including but not limited to: losses that arise when the User is unable to timely adopt corresponding measures after receiving warning notice from the system, because the Margin Level of the relevant Cross Margin Account reaches the Warning Line and then quickly reaches the Liquidation Line due to violent fluctuation in the digital asset prices.
7.5 The platform proceeds to intelligent management of margin trading and risks. When margin trading or margin loans on the platform enters the pre-set warning range, the platform will take certain measures to prevent greater risks from occurring, including but not limited to: prohibiting transfer funds, prohibiting long, prohibiting short, prohibiting margin trading and forced liquidation.
7.6 The Platform will adjust the pre-set maximum amount of Single Margin Loans and the total margin loans on the platform according to the actual operation conditions and risk level of the market.
7.7 Margin Risk Fund. Starting from April 27th, 2020, Binance will inject 15% of platform profits from Margin loans into the Margin Risk Fund to cover the loans which cannot be repaid due to bankruptcy.
7.8 The Cross Margin platform has made the following adjustments at 2020/07/16 8:00 AM (UTC):
  • Users are only be able to trade with up to 3x leverage on cross margin pairs.
  • Existing 5x leverage positions on cross margin can be kept or adjusted down to 3x leverage.

8 Sub-account

8.1 A master account can only have 10 sub-accounts in margin trading;
8.2 The maximum loan limit of the sub-account is 1/10 of the loan limit of the master account;

9 Calculation Method of Margin account holdings and trading volume

9.1 The averaged Daily BNB Holdings for Cross Margin Account (including the sub-accounts’ margin trading volume) is calculated as part of the user's total daily average holdings. The calculation formula is as follows:
The average Daily BNB Holdings of Cross Margin Account (including sub-accounts’ margin account) = The sum of the hourly snapshots of the Net BNB balance(Net BNB Balance = BNB Total Balance - Borrowed BNB - BNB Interest)in a day divided by 24 (hours).
  • Snapshots are taken at a random time every hour;
  • Pending orders are included in holdings
9.2 The trading volume of a Cross Margin account (including the sub-account's margin trading volume) is directly a part of the user's total daily trading volume;

10 Supplementary Rules

10.1 Binance provides information release, supervision and risk control services for Cross Margin trading and loans. The Platform does not provide any income guarantee and capital guarantee for users' margin transactions in Binance. Investors should fully realize that margin trading is subject to relatively high risk and should pre-assess the possible losses, and participate voluntarily on the basis of confirming that the risks are controllable and affordable.
10.2 The terms "exceeding" and "below" do not include the number, and "not exceeding", "not less than", "above", and "reach" include the number.
10.3 These rules are formulated by Binance and will take effect after being announced to all users. The same applies to amendments.
10.4 These rules shall be interpreted by Binance.
Binance is not responsible for the message delivery issues caused by external factors, such as local restrictions, policy of service providers, and device problems.