Table of Contents:
- 1. Use 125x leverage to improve your trading position
- 2. Why would you use 125x leverage rather than 20x one?
- 3. Using leverage trading is dangerous – be careful
- 4. Binance Futures protects you – no matter what leverage you choose
- 5. Customized leverages without any downtime
- 6. Summary and conclusion
Binance Futures has quite successful beginning. Although the page launched only a month ago, they are now one of the most popular and surely one of the fastest growing binance trading market in the world. One of the latest novelties that they introduced was the possibility to open a position with a customized leverage. In other words, the latest update introduced 125x laverage!
Up to this moment, it was possible to use only 20x leverage on Binance Futures. However, in order to meet the expectations of their users, they wanted to improve the leverage mechanics. For this reason, they made it possible to set the leverage from 1x up to 125x. Interestingly, these leverages have different margins that correspond to their tiers and to the amount of funds you are willing to invest.
It is worth to learn more about the entire mechanics of these leverage tiers, so we can understand the latest feature. Interestingly, the company knew that with new content, there will be even bigger interest with their services. This is why they prepared for new users a 10% lifetime discount on trading fees!
Binance Futures introduced the players with a leverage mechanism that they could use to expand their funds without having a majority of the assets required to open the position. Now it is possible to choose up to 125x leverage on any future trade that we are to choose. But how to make this option worth trying? What should we look at in order to take its advantages?
Here is a list of 5 things we should pay attention to
Use 125x leverage to improve your trading position
One of the main reasons why it is a good idea to use Binance Futures is that it offers us one of the best capital-efficient features. Usually, in order to trade 1 BTC, it is necessary to have all the funds before you begin trading. In case of Binance Futures, you can start with just a very small portion of it. In that way you don’t have to spend a lot on this position, especially if we choose a very high leverage.
To explain it better, let us assume that Bitcoin is now $10 000. If you were to invest only $100, you would purchase just 0.01 BTC. However, when you transfer your $100 onto Binance Futures, you will be able to trade with up to x125 leverage. It means that there will be a possibility to open positions that are worth of 1.25 BTC. This is how you can get much higher profits while investing so small.
Why would you use 125x leverage rather than 20x one?
Let’s take a look at 20x leverage. With the same investment of $100, you would be able to purchase 0.2 BTC in the same scenario as presented above. Now let’s assume that you opened a buy/long position and 1 day later, the price for BTC was $11 000 instead of $10 000. If you were to use 20x leverage scenario, you would receive only $200 gain. However, in the case of 125x leverage, the profit would be $1250. Of course let’s remember about trading fees, which in case of Binance Futures are one of the lowest in the market.
Using leverage trading is dangerous – be careful
When it comes to trading, Bitcoin is one of the most unstable assets you can find. Its price can go up and down in seconds and can result in either huge profits or colossal losses. That is why we should bear in mind that even if leverage can multiply your gains in an hour, it can also ruin your investment just as quick.
With large rewards come as big risk. That is why you need to remember that using such big leverage can end up in liquidating all your positions and losing all your money. 125x leverage has a very low price point when it comes to liquidating your position. Let us explain it on the same examples as above. If you decide to use 20x leverage to open a 1 BTC position with $10 000 worth, you will be able to keep the position open to the moment the price for BTC drops to $9540. If; however, you use 125x leverage, the margin of error is much smaller. The same position will be liquidated the moment the price for BTC drops to $9950.
Binance Futures protects you – no matter what leverage you choose
The main goal of Binance Futures is to protect the users before potential losses. That is why you will find here the so-called stop-loss orders that will allow you to automatically receive a portion of your money the moment before the liquidation point is reached. Besides that, there are also take-profit-limit orders and many other features. As a result, you can be sure that you are not going to miss either great gains or losses even if you are not currently on the market.
The goal of the company is to introduce a bit of safety and certainty even when it comes to high risk trading. They wish to provide us with industry that will be able to keep the users safe to some extent. The engine responsible for leverage trading in Binance Futures is of utmost quality, offering us guarantee that nothing bad will happen to us. It is all due to the numerous features that the company introduced for the users’ convenience.
Customized leverages without any downtime
If you know a thing or two about leverages, then you know how important was to introduce the customized leverage with zero downtime. Binance Futures makes sure that all the improvements and upgrades that appear in their trading platform are implemented without any interruptions. Your trading operations are secured all the time.
Summary and conclusion
Binance trading is surely a very interesting method to invest and then gain quite large profits. Of course we should bear in mind that futures trading of cryptocurrencies is a very dangerous business. It is all due to the large fluctuations you are not going to find in any other investment assets.