How Binance Futures Wallet and Trades Work for Beginners

Binance Futures is a derivatives trading platform that allows users to speculate on the future price of cryptocurrencies. It offers a variety of futures contracts, including contracts for Bitcoin, Ethereum, and other popular cryptocurrencies.

Binance Futures Wallet

The Binance Futures wallet is where you store the funds that you use to trade futures contracts. You can fund your Binance Futures wallet by transferring funds from your regular Binance account.

Binance Futures Trades

There are two types of futures contracts on Binance Futures: USDT-M and COIN-M. USDT-M contracts are settled in USDT, while COIN-M contracts are settled in the underlying cryptocurrency.

When you place a futures order, you are specifying the price at which you want to buy or sell the contract. You can also specify the type of order you want to place, such as a market order, limit order, or stop order.

Once you have placed an order, it will be filled when the market price reaches your specified price. If the market price does not reach your specified price, your order will remain open until it is filled or canceled.

Leverage

One of the key features of Binance Futures is the use of leverage. Leverage allows you to amplify your profits and losses. For example, if you use 10x leverage on a Bitcoin futures contract, you will make a 10% profit or loss if the price of Bitcoin moves 1% in your favor or against you.

It is important to note that leverage also increases your risk. If the market moves against you, you can lose more money than you invested.

Example of a Binance Futures Trade

If the price of Bitcoin goes up, you will make a profit. For example, if you place a long order on a Bitcoin futures contract at $20,000, and the price of Bitcoin goes up to $25,000, you will make a profit of $5,000 per contract.

If the price of Bitcoin goes down, you will lose money. For example, if you place a long order on a Bitcoin futures contract at $20,000, and the price of Bitcoin goes down to $15,000, you will lose $5,000 per contract.