Let's talk about Binance USDⓈ-M Futures
Knowledge partners, come take a look! Content from 7 hours ago, teaching you how to navigate Binance USDⓈ-M Futures.
Leverage: Small money, big business
Imagine, with $10,000 you can leverage $100,000 in trades, that’s the power of 10x leverage! But don’t forget, it’s a double-edged sword; you can earn a lot, but lose quickly too.
When you earn, with just a slight movement in price, money flows in.
When you lose, with just a slight drop in price, your capital might disappear.
Funding Costs: The Art of Balance
Perpetual futures have no expiration date, but you have to pay some fees to keep the futures price aligned with the actual price.
When there are many buyers, the longs have to pay the shorts; when there are many sellers, the shorts have to pay the longs.
Position Size: How much did you bet?
Position size is the total amount you are trading. The higher the leverage, the larger the position you can play with.
Liquidation Price: Red Line Warning
If you lose to a certain extent and your margin is insufficient, your position will be automatically closed to prevent further losses. The higher the leverage, the closer the liquidation price, and the greater the risk.
Trading Fees: Costs for Buying and Selling
For each trade, Binance charges some fees, which will eat into your profits and increase your losses.
How do they affect each other?
The higher the leverage, the larger the position; the larger the position, the higher the funding costs and trading fees; the higher the leverage, the closer the liquidation price.
For example:
Low Leverage: $10,000 with 10x leverage, playing a $100,000 position, low fees, far liquidation, low risk.
High Leverage: $10,000 with 50x leverage, playing a $500,000 position, high fees, close liquidation, high risk.
The key point is:
Manage risks well: Leverage, position, and costs, all need to be kept in mind.
Know your bottom line: Always keep an eye on the liquidation price, don’t overdo it.
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