[One knowledge a day]

Learn about Compensation and Funding Fees in Futures trading!

Understanding the dynamics of price convergence, contango, contango, and the role of funding fees is important for traders in the perpetual futures market, especially on platforms like Binance Futures, and by properly understanding this information, you will be able to make informed decisions and use effective strategies.

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✨Main ideas:

⭐ Contango and funding fees are concepts related to trading activities on Binance Futures.

⭐ Contango is when the futures contract price is higher than the spot price, which can lead to a positive funding rate while contango is the opposite case.

⭐ High funding fees can pose risks, especially when they lead to liquidation due to margin constraints.

⭐ Traders can use many of Binance's strategies and tools to reduce risks arising from price divergence, such as Price Protection.

https://www.binance.com/vi/blog/futures/h%E1%BB%99i-t%E1%BB%A5-gi%C3%A1-v%C3%A0-ph%C3%AD-funding-trong-th%E1%BB%8B-tr%C6%B0%E1%BB%9Dng-h%E1%BB%A3p-%C4%91%E1%BB%93ng-futures-3967228051272907352