What is the maximum leverage available on binance futures 125x 100x 75x
Binance uses a sophisticated risk control system and liquidation model to support high leverage trading by adopting the Maintenance Margin model. For the latest updates, please refer to the Trading Rules page.
What are maximum position, maximum leverage, and Initial Margin Rate?
The maximum amount of leverage available depends on the notional value of your position—the larger the position, the lower the leverage. You can adjust the leverage according to your needs, and all position sizes are calculated based on the notional value of the contract (USDT or BUSD denominated). Thus, the Initial Margin is determined by the leverage you selected.
Please note that you should first select your leverage (and fulfill the Initial Margin requirement) before opening positions, or it will be set at 20x by default. The higher the leverage, the smaller the notional size you can open; the lower the leverage, the higher the notional size you can open.
Important note: Binance Futures introduced leverage limits for users with registered futures accounts of less than 60 days
Effective July 27th, 2021, Binance Futures set leverage limits for users who registered their futures accounts in less than 60 days. The following leverage limits will apply:
- From the effective date, new users with registered futures accounts of less than 60 days will not be allowed to open positions with leverage exceeding 20x.
- The new leverage limits will also apply to existing users with registered futures accounts of less than 60 days:
- Users with open positions of less than 20x leverage will not be allowed to adjust their open positions beyond 20x leverage.
- Users with open positions of more than 20x leverage may choose to maintain their position leverage but will not be allowed to increase their position leverage further. They will only be allowed to deleverage their open positions to 20x and below.
- For new users with no open positions, all new positions must not exceed 20x leverage.
- Leverage limits for new users will gradually increase only after 60 days from registration.
- If you have open positions in Isolated Margin Mode, you are not allowed to lower the leverage.
- In Cross Margin Mode, the margin can only be shared between the same type of asset. For example, in Cross Margin Mode, all BUSD in the USDⓈ-M Futures Wallet can be used for all BUSD-margined contracts.
- The maximum position limit of each tier includes both long and short positions.
The system will display the maximum allowable position size for different tiers of leverage as shown below:
What is Maintenance Margin?
Maintenance Margin is calculated based on your positions at different notional value tiers. This means that the Maintenance Margin is always calculated the same way, regardless of what leverage you select. Moving from one tier to another will not cause the previous tier to change its leverage. The larger the position, the higher the Maintenance Margin rate.
In most exchanges, the Maintenance Margin is usually half of the Initial Margin. At Binance, however, the Maintenance Margin is only less than half of the Initial Margin, which is more beneficial to traders.
It is important to note that the Maintenance Margin will directly affect the liquidation price. To avoid auto-deleveraging, it is highly recommended to close your positions before the collateral falls below the Maintenance Margin.
Binance, the world’s largest cryptocurrency exchange, continues adopting new leverage trading restrictions on its futures platform in a move to expand consumer protection.
After introducing a 20x leverage limit for new users on July 19, Binance Futures is preparing to apply the same limit for existing users soon, Binance CEO Changpeng Zhao announced Sunday.
“We didn’t want to make this a thingy,” the CEO said, noting that the new restrictions will be applied “over the next few weeks.”
[email protected] futures started limiting new users to max 20x leverage last Monday, Jul 19th, 7 days ago. (We didn’t want to make this a thingy).
In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks.
— CZ Binance (@cz_binance) July 26, 2021
Effective last Monday, new users with registered Binance Futures accounts of less than 30 days were prohibited from opening positions with leverage exceeding 20x. The new leverage limits will also apply to existing users with registered futures accounts of less than 30 days, according to Binance’s leverage trading page. “Leverage limits for new users will gradually increase only after one month from registration,” Binance noted.
Launched in July 2019, the Binance Futures trading platform initially allowed investors to open leverage positions at a maximum of 20 times, meaning that an investment of $1,000 could be turned into a bet of $20,000. The exchange subsequently increased maximum leverage and margin on Bitcoin (BTC) against Tether (USDT) contracts to 125x in October, noting that highly leveraged trading was introduced using a “sophisticated risk engine and liquidation model.”
“At 125x leverage, a 100 USDT collateral deposit on Binance Futures will allow users to hold 12,500 USDT in BTC,” the firm said at the time.
Related: FTX reduces max leverage from 101x to 20x to encourage ‘responsible trading’
The latest trading restrictions echo a recent move by FTX, one of the world’s largest cryptocurrency exchanges. The company officially announced a reduction in maximum leverage from 101x to 20x on Sunday. “Again, this will hit a tiny fraction of activity on the platform, and while many users have expressed that they like having the option, very few use it,” FTX founder and CEO Sam Bankman-Fried noted.
The new restrictions came after a Friday article in The New York Times alleging that risky trades offered on FTX and other crypto exchanges like Binance and BitMEX prompted a crypto market crash in May.
For you to start trading Futures on Binance, there’s a requirement where you need to “activate” this option, namely you need to pass a test, devoted to the knowledge of Futures trading.
Following the link, you can find a video, which covers all the steps to open a Futures wallet on Binance.
Below we shared the list of the steps in a written form.
1. In the menu choose Derivatives –> USDS-M Futures
2. On the right side of the opened section familiarise yourself with the risks of Futures trading and proceed with an Open now button.
3. After a Futures trading menu is opened, click on either Buy/Long or Sell/Short.
4. In an opened window with the tutorial please click on Start Quiz.
5. To activate access to Futures trading, you need to give a correct answer to all 14 questions.
Below is the list with these questions and correct answers so that you can have a small practice.
Please note! Futures trading is a highly risky endeavour, with the potential for both great profits and significant losses. Please be aware that in the event of extreme price movement, there is a chance that all margin balance in your futures wallet may be liquidated. Futures trading is restricted for users from certain regions.
1. Which of the following action should you take when you fail to place an order?
Correct – Check your network, save screenshots or related information, and ask for help from customer service. (answer #2)
2. There is a maximum size limit for each order. Which action should you take when you receive this type of error message?
Correct – Divide the large order into several smaller orders. (answer #3)
3. Which of the following description of Stop-Market Order is correct?
Correct – The order will be executed at the market price once the price hits the trigger price. But the executed price may not be equal to the trigger price. (answer #2)
4. Which of the following description of the Stop-Limit Order is correct?
Correct – The order will be placed at the limit price once the price hits the trigger price. But the limit order may not necessarily be filled as the latest market price may have moved away from the limit price. (answer #1)
5. Which of the following description of Profit and Loss (PnL) is correct?
Correct – Realized PnL is calculated based on the opening price and the closing price after a position is closed. (answer #3)
6. What is the maximum loss that may occur in futures trading?
Correct – All the money in my futures wallet (answer #1)
7. Which coin can be used as margin for a Coin-margined futures?
Correct – The base asset of this future. For example, I can use BTC as margin when I trade BTCUSD future. (answer #2)
8. When a futures position is liquidated, what price is it based on?
Correct – Mark Price (answer #3)
9. Futures fees include:
Correct – Commissions, Insurance Clear Fees and Funding Fees while holding positions. (answer #2)
10. Are you aware that after a futures position is liquidated, in addition to the loss of the position, an Insurance Clear Fee will occur, which may decrease your futures wallet balance to zero? p.s. Insurance Clear Fee = Position nominal value * Liquidation fee rate
Correct – Yes, I am aware of the existence and calculation of the Insurance Clear Fee and the risks that may cause the balance to return to zero. (answer #2)
11. . What kind of behaviour should I avoid when engaging in futures trading?
Correct – Strong gambling, trading addictions, continuous losses, and blaming others. (answer #3)
12. To continue trading on futures, I have:
Correct – Understood the rules and risks of futures trading, and I agree that any loss incurred during futures trading is my own responsibility regardless of the platform. (answer #2)
13. Due to network delays, system failures and other possible factors which may lead to suspension or deviation of Binance Futures service execution, Binance will use commercially reasonable efforts to ensure but not promise that Binance Futures service system runs effectively. Binance shall not be liable for the final execution results due to the above factors.
Correct – Agree (answer #1)
14. In the event of a service disruption on Binance Futures, you may use the “close all positions” function to cancel all orders and close all open positions. However, due to unpredictable factors, the final execution result of this function might deviate from your expectations, and Binance shall not be liable for the final results.
Correct – Agree (answer #1)
As soon as you are done answering the questions, click on Submit. Should all the answers be correct, the interface of Futures trading will be activated.
6. To start trading Futures you need to transfer USDT from your spot wallet to Futures. When transferring no fees are charged by Binance. For that please simply click on the Transfer button in the right menu, enter the desired amount and proceed with the Confirm button.
Congratulations! You are now all set to start trading Futures on Binance.
Your Binance Futures is now created and you can get started with launching your first Binance bot! Want to know how to connect Binance API keys to Bitsgap? – How to create and set up Binance API key