Recently, due to strong volatility, it seems that each person will need their own strategy for investment and survival.
As a result, investments in global exchanges are naturally increasing. So today, I would like to provide a brief introduction to Binance, the world's number one exchange, and discuss the Binance funding rate, which is essential to know.
In particular, Binance is known as the world's number one exchange, holding the highest trading volume in both spot and futures, as well as having the most investors.
First of all, the Binance funding fee is a term used in futures trading. As you know, futures trading involves long positions that invest in upward trends and short positions that invest in downward trends, meaning it is a market where trades occur in both directions.
If the market or that particular coin is expected to decline, you take a short position, and if it is expected to rise, you take a long position. Therefore, the ratio of long to short investment positions can vary depending on the flow of all market investors.
If the mood is good, long positions will increase, and if the mood is bearish, short positions will increase.
Thus, the concept of funding fees exists as a mechanism to prevent and adjust the phenomenon of one-sided position bias.
According to the official explanation, Binance funding fees are calculated based on the difference between the price of perpetual contracts and the spot price, which is periodically exchanged between long and short traders.
I would like to take a look at an example of Binance funding fees for easier understanding. First, the total market funding fee can be checked in the futures trading window.
If the funding fee is positive (+), it means that there are more long positions than short positions. In such cases, the long positions must pay funding fees to the short positions.
Conversely, if the funding fee is negative (-), it means that there are more short positions than long positions, and in this case, the short positions must pay a certain amount of funding fees to the long positions.
Thus, the Binance funding fee rates are provided in real-time. Funding fees are determined three times: at 9 AM, 5 PM, and 1 AM Korean time.
Depending on which position I funded at that time, I can receive funding fees, and of course, I can also use leverage, so investment is possible depending on the market situation.
For example, if you use 30x leverage with $100, it becomes $3,000, and assuming the funding fee is 0.01%, you will incur a cost of $0.30.
Therefore, when the payment time for Binance funding fees arrives, market volatility often increases significantly.
In other words, the payment and ratio of funding fees are influenced by the market supply and demand, and understanding this can help you grasp the market mood or flow.
Of course, such an expansive concept does tend to work to the advantage of investors who have accumulated some know-how and market experience.
However, it is very important to have a concept and understanding of this, and it is also a crucial concept that can be combined with other investment strategies.
Since domestic exchanges do not allow futures trading or funding fees, you will need to use a global exchange.
1. Access the official Binance homepage
First, access the official Binance homepage. By accessing it through the link below, you can also receive a 20% discount on trading fees.
🎄Go to receive a 20% discount benefit on Binance fees
Not only new members but also existing members can receive a 20% discount on fees if they meet the five conditions below.
The invited person already has an account registered with Binance.
The invited person has not previously accepted an invitation.
The invited person has not traded or used products on the Binance platform in the last 180 days with their account.
When a qualified inviter opens the link and logs in, a confirmation window appears.
When the inviter clicks [Bind Now], the binding takes effect.
2. Create an ID
You can register using your email or phone number, and from a management and security perspective, it is recommended to register with an email.
After entering your email address, proceed to the next step.
3. Enter the verification code
After confirming the verification code sent to the entered email (or mobile phone), please enter it.
Once the verification is complete, you move on to the next step.
4. Create a password
Set a password to use for logging in. Once you complete the password setup, your Binance registration will be complete.
If you enter the fee discount code incorrectly or miss it, you will not be able to re-enter it, so please be sure to use the link below to receive the benefit.
The Binance funding fee we learned about today is an important concept that can be fully utilized in a highly volatile market, and I believe it is essential to know.