Leading cryptocurrency exchange Binance has launched perpetual futures trading contracts margined with BTC, and with leverage up to 125x.
According to a press release shared with CryptoGlobe, the contracts are listed on the Binance Futures platform and are denominated as “COIN-margined” on it. Perpetual futures contracts, unlike traditional futures contracts in which both buyers and sellers are obligated to execute the deal at a specific date regardless of the underlying asset’s price, perpetual contracts do not expire.
This means traders can hold their positions indefinitely. These contracts use funding fees as a mechanism to ensure converge of their price to the spot price of an underlying cryptoasset. More often than not, these are paid every eight hours.
Binance’s new perpetual derivatives are margined and priced in bitcoin and not in fiat currency. Margins, it’s worth noting, are loans traders borrow from the trading platform to leverage their positions. On Binance, with 1 BTC users can leverage their positions to trade with 125 BTC, although the risk is far greater at that leverage.
The announcement quotes Aaron Gong, VP of Binance Futures, saying:
We are the only exchange that offers users flexible control of their margin balance by either spreading it across all their open positions or setting individual limits for each position they own (cross or isolate margin modes), as well as the ability to switch their margin modes at any time.
Binance’s bitcoin-margined quarterly and perpetual futures contract aims to help users diversify their strategies and improve efficiencies, the announcement reads. Binance’s CEO Changpeng Zhao revealed that after the exchange hit an “an all-time-high of $13 billion in daily futures volume last month,” it surpassed $1 billion in open interest.
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