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Binance Futures Trading Risk Control

Binance Futures Trading Risk Control

2021-12-08 10:53

1. General Rules

1.1. These rules are designed to protect the rights and interests of Futures users on Binance by managing trading risks.
1.2. These rules apply to the Binance Futures trading service, which includes the trading of Futures contracts and other related products and offerings.
1.3. Binance Terms of Use and other relevant rules shall continue to apply.

2. Risk Control

2.1. You should always be aware of Futures trading risks and adjust your position(s) and margin balance(s), if any, in time to minimize that risk. All of your margin balance may be liquidated in the event of extreme price movements. Please use trading strategies at your own discretion and risk. Binance shall not be liable for any loss that might arise from your use of Binance Futures.
2.2. Binance reserves the right to monitor your accounts’ risk ratio in real time.
2.3. Binance reserves the right to take appropriate measures based on, and not limited to, changes in the risk ratio. Risk control measures that may be used include, and are not limited to:
  • Implementing a “Reduce Only” restriction;
  • Adjusting the risk matrix according to the market situation;
  • Prohibiting transfers, trading, and other operations for high-risk users.

3. “Reduce Only” Trading Restrictions

3.1 Implementation of “Reduce Only” restrictions
Conditions for “Reduce Only” trading restrictions are set by a risk-control schedule. This schedule consists of the trading position size (“Open Positional Notional Value”) of a USDⓈ-M or COIN-M futures contract, the ratio of the position size in relation to the size of the contract, and the gap between the position’s liquidation price and the mark price.
Risk control measures are triggered when the gap between the position’s liquidation price and the mark price exceeds the risk-control schedule.
The system will automatically implement the “Reduce Only” risk control measures and you will be notified via email. Once this measure is implemented, you will only be able to reduce the position of the contract. You will not be able to increase your position or open new positions.
If all of the below conditions are met, the "Reduce Only" trading restrictions will be applied. For specific parameters, please refer to [Trading Rule] - [Reduce Only Trigger]. Please note that the parameter table will be updated from time to time according to market conditions​​:
  • The notional value of your position on the contract is greater than the trigger parameter. The proportion of the total position is greater than the trigger parameter. The notional value of the open position and total open position are calculated one-way;
  • The gap between the current position’s liquidation price and the mark price in the contract is less than the trigger parameter.
3.2 “Reduce Only” restrictions on linked accounts
If you trade through multiple linked accounts (i.e. sub-accounts), and the proportion of the aggregated position per symbol across all sub-accounts to the total open positions of the symbol on Binance is more than 20%, Binance reserves the right to implement the “Reduce Only” restrictions on this symbol on all of your related accounts. Please note that this ratio will be updated from time to time, subject to market conditions.
3.3 Lifting of the “Reduce Only” restrictions
When any of the following two conditions are met, the system will automatically lift the “Reduce Only” trading restrictions on the contract within 10 minutes.
Please note that the below conditions of lifting “Reduce Only” are for reference only. Binance reserves the right to dynamically adjust the conditions according to market movement without prior notice to users in two situations:
  • When your open position on the contract is reduced by at least 30% of the contract's Open Positional Notional Value (USDT), which is stipulated under the “Reduce Only Trigger” section
  • The liquidation price is more than 40% away from the current mark price.