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How to Use The Multi-Assets Mode to Trade BUSD-M Futures?

2021-09-02

Key Takeaways:

  • With the Multi-Assets mode, traders can now share their margin across USDT-margined and BUSD-margined contracts to experience a more diverse flavor of trading.

  • Traders can also expect to enjoy lower fees and maker rebates when using BUSD-margined contracts. Fee discounts apply to any BUSD futures trading pairs such as ETH/BUSD or BTC/BUSD perpetual contracts.

  • Traders can utilize Multi-Assets mode to hedge against capitulations under one account, take advantage of arbitrage opportunities, automatically protect themselves from liquidation, and much more.

Trading on Binance has become more versatile, especially since the addition of Multi-Assets Mode. This new feature provides more use cases for USD-M Futures contracts, allowing traders to be more agile and adaptable in different market conditions. 

Traders can participate in a unique branch of derivatives that merges the capabilities of BUSD and USDT-Margined contracts. With the branching of the two stablecoins into futures trading, the time to trade BUSD-Margined Futures has never been better.

What is Multi-Assets Mode?

Multi-Assets Mode is a new trading feature that allows users to trade various crypto futures contracts using USDT or BUSD as collateral. Before this mode was available, traders were required to trade in a single-asset mode, forcing them to allocate significant portions of their portfolios into a specific stablecoin (USDT). With the Multi-Assets mode, traders can now share their margin across USDT-margined and BUSD-margined contracts to experience a more diverse flavor of trading.

Additionally, profits made on any contract (BUSD or USDT) can also be used as margin on another contract in Multi-Asset mode. The synchronicity available with Multi-Assets mode incentivizes traders looking to hedge their portfolio positions when in trading with USD-M contracts. Whatsmore is that margin balances between BUSD and USDT wallets can be a good representation of an investor’s net profits and losses between the two markets. In essence, the Multi-Assets mode is a versatile trading option that presents several new benefits and advantages to traders, otherwise unattainable.

What are BUSD-M Futures?

Traditional crypto derivatives trading is a challenging endeavor by itself. But traders should know that with Binance, there is more on the menu than just plain-old futures and margin trading. Binance has continuously expanded its product range to provide more trading opportunities for users. Its latest addition, BUSD-Margined futures, offers cost-saving benefits that can help traders realize more profits.

BUSD-Margined Futures are a type of linear futures product that is quoted, collateralized, and settled in BUSD. As a result, not only are transactions fairly easy to calculate into USD (or other fiat currencies), but they are also much less prone to volatility. Because these trades are stablecoin-settled, they act as a shield against volatility in most cases, especially when involving other cryptocurrencies (ETH, BTC).

Traders can also expect to enjoy lower fees and maker rebates when using BUSD-margined contracts. Fee discounts apply to any trading pairs such as ETH/BUSD or BTC/BUSD, or any other sort of BUSD perpetual contracts. 

When investors hold BUSD, they have a strong guarantee of its value. BUSD is a strictly regulated, 100% backed cash-equivalent pegged to the US dollar at a 1:1 ratio.

Transacting with BUSD on Binance has also proven to be a cost-effective choice. Binance has launched the Zero Maker-Fee promotion for all BUSD pairs and the Zero transaction fee promotion for 4 BUSD stablecoin pairs, users can purchase and trade BUSD with a low fee and enjoy the great liquidly in the Spot and Margin market. For example, you will not incur fees if you make a maker-trade on BTC/BUSD in the spot market. Additionally, if you trade a BUSD stablecoin pair such as BUSD/USDT, you can transact with no cost at all.

Trading BUSD-M Futures with Multi-Assets Mode

Under Multi-Asset Mode, trading BUSD-M contracts can offer more cost-saving benefits. 

If you are a BUSD holder, not only can you save on trading fees in the Spot and Margin markets, but you can also save on fees trading the BUSD-M contracts. Furthermore, with Multi-Asset Mode, you can also trade USDT-M contracts without converting them to USDT, giving you the flexibility to open positions in both USDT-M and BUSD-M contracts whenever opportunities arise. 

If you are a USDT holder, you can save on fees by trading BUSD-M contracts as they offer lower fees and maker rebates, as mentioned earlier. This way, you could reduce your transaction costs and enjoy more profits. 

Also, in Multi-Assets Mode, traders can trade in two different directions on the same underlying crypto because they can trade in BUSD or USDT. For instance, if a trader believed that BTC/BUSD would take a loss due to an upcoming price drop in BTC, they could short a BTC/USDT contract to counteract the potential loss. 

For example, let’s say you held a long-term position valued at 50,000 BUSD in BTC/BUSD perpetual contracts. After some technical analysis, you determine that there is an upcoming downtrend in the near term. By using Multi-Assets mode, hedging for this scenario is simple. The way to bet against BTC and short it would be with a USDT quarterly contract. Your position could simply be to trade half the size of your BUSD position into USDT. In other words, 25,000 USDT worth of BTC/USDT quarterly futures contracts.

Should the price of BTC fall 20%, the losses incurred in BTC/BUSD perpetual would still amount to -10,000 BUSD. Your hedge, however, trading at half the value of your long-term position, would serve to cushion the loss by 5,000 USDT. Thus, although there is still a loss, the risk was mitigated, and in the end, cut down by 50% because BUSD and USDT are linear products, both pegged equally to the US dollar.

Conclusion

Since BUSD-Margined Futures are somewhat of a more risk-averse trading method, they can be a prudent choice, especially in highly volatile market conditions. But when coupled with the Multi-Assets mode, the features and advantages improve even further.

Traders can utilize Multi-Assets mode to hedge against capitulations under one account, take advantage of arbitrage opportunities, automatically protect themselves from liquidation, and much more. Furthermore, BUSD transactions on Binance are incredibly cost-effective, as transaction costs are non-existent. Fees for takers are considerably lower, and maker rebates are more enjoyable. Binance enacts fee discounts for trading pairs such as BTC/BUSD and ETH/BUSD.

Despite the many benefits of trading with a stablecoin, and especially with BUSD on Binance, derivatives trading is still incredibly challenging for anybody. Just because BUSD-Margined Futures offer cost-saving benefits does not mean they are guaranteed to succeed. Rather, they should still be treated as though they are a high-risk trade requiring careful strategies to avoid compromising your portfolio.

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