Binance Leveraged Tokens are a type of derivative product that give you leveraged exposure to the underlying asset. Like other tokens, leveraged tokens can be traded on the spot market. Each leveraged token represents a basket of perpetual contract positions. The price of a leveraged token moves along with price changes in the perpetual contract market, and the leverage level moves up and down accordingly.
Unlike margin trading, leveraged tokens allow you to gain exposure to leveraged positions without having to put up any collateral, maintain a maintenance margin level, or worry about the risk of liquidation. However, even though you don't have to worry about the risk of liquidation, there are still risks associated with leveraged token positions, such as the effects of price movements in the perpetual contracts market, premiums, and funding rates.
Binance Leveraged Tokens rebalance on an as-needed basis only. Unlike conventional leveraged tokens, Binance Leveraged Tokens are not forced to maintain a constant leverage. Hence, Binance Leveraged Tokens rebalance during extreme market movements only.
The rebalancing of Binance Leveraged Tokens positions is governed by Binance proprietary algorithms. Binance aims to maximize the correlation between the Binance Leveraged Tokens and the underlying margin-Leveraged position.
You can subscribe or redeem a leveraged token at net asset value with a daily cap of 1,000 USDT per account. However, the amount may vary according to prevailing market conditions. Please check Redemption & Subscription Limits of each leveraged token for the updated subscription and redemption cap.
To subscribe or redeem, simply go to Binance Leveraged Tokens page and click “Subscribe” or “Redeem”. 0.1% of subscription or redemption fee will be charged and the funds (in USDT) will be deducted from or credited into your spot wallet.