⚠️ 30 Seconds of Binance TradFi: What No One Tells You, But Binance Does | Part 1
TradFi products can look familiar. The risks are not.
Before you touch a perpetual, gold or silver contract, or a stock option, here’s what you need to understand:
1️⃣ Leverage can magnify losses
Leverage works both ways. A relatively small move against a leveraged position can create a much larger loss relative to your margin. In futures, adverse price movements can trigger liquidation.
2️⃣ You can be liquidated
If your margin falls below the required maintenance level, your position can be forcibly closed. In extreme conditions, losses can also exceed the initial margin and leave a deficit.
3️⃣ Funding isn't free
Perpetual contracts use funding payments between long and short positions. Depending on the funding rate and how long you hold a position, these payments can accumulate and affect your liquidation price.
4️⃣ 24/7 trading doesn't mean 24/7 liquidity
TradFi perpetuals can trade around the clock even when the underlying traditional market is closed. Major news, earnings or other events can create price gaps when the underlying market reopens.
5️⃣ You don't own the underlying asset
A TradFi perpetual tracks an underlying traditional asset. Holding the contract does not mean you own the actual stock, gold or silver.
#RiskAwareness #BinancePerp
TradFi products can look familiar. The risks are not.
Before you touch a perpetual, gold or silver contract, or a stock option, here’s what you need to understand:
1️⃣ Leverage can magnify losses
Leverage works both ways. A relatively small move against a leveraged position can create a much larger loss relative to your margin. In futures, adverse price movements can trigger liquidation.
2️⃣ You can be liquidated
If your margin falls below the required maintenance level, your position can be forcibly closed. In extreme conditions, losses can also exceed the initial margin and leave a deficit.
3️⃣ Funding isn't free
Perpetual contracts use funding payments between long and short positions. Depending on the funding rate and how long you hold a position, these payments can accumulate and affect your liquidation price.
4️⃣ 24/7 trading doesn't mean 24/7 liquidity
TradFi perpetuals can trade around the clock even when the underlying traditional market is closed. Major news, earnings or other events can create price gaps when the underlying market reopens.
5️⃣ You don't own the underlying asset
A TradFi perpetual tracks an underlying traditional asset. Holding the contract does not mean you own the actual stock, gold or silver.
#RiskAwareness #BinancePerp