In Margin trading, “Short” refers to selling at a high price then buying at a lower price. By doing this, you can earn a profit from the price difference.
Click the video and learn how to use Short (Buy/Sell) on Margin trading.
Video Tutorial
How to open a Short Position?
Suppose BTC is currently at 10,000 USDC and you think it will drop in the future.
1. Log in to your Binance account and go to [Trade] - [Margin].
2. After transferring 10,000 USDC to your Margin Wallet as collateral, go to the [Sell] tab and click [Cross 3x].
3. Select [Limit] order and click [Borrow] to place under the Auto-Borrow mode, then enter 10,000 next to USDC.
4. Enter the amount to sell next to 'Total', such as 2 BTC, and click [Margin Sell BTC].
5. After confirming the order, the system will use your 10,000 USDC as collateral and borrow 2 BTC. This means you'll be margin selling 2 BTC at 10,000 USDC each.
Suppose after 2 weeks, the market moves in a favorable direction and BTC is now at 7,000 USDC. Binance Margin offers you two options to close your short position:
Option 1: Buy Order under Auto-Repay Mode
You can place a buy order using the [Repay] mode to profit from the price difference. Buy Order with Auto-Repay Mode will use the filled amount to repay your debt. For example in this case, your filled BTC amount will be used to repay the BTC debt first.
Go to the [Buy] tab, select [Limit] order, and choose Auto-Repay mode to buy 2 BTC at 7,000 USDC each. Once your order is fulfilled, the system will automatically repay the 2 BTC.
Since your margin sold 2 BTC for 20,000 USDC, your profit after the repayment would be 20,000 - 14,000 = 6,000 USDC. If we ignore the fees and interests, you have earned a 60% profit from the trade.
Each position has its own [Close Position] Button. The ‘Close Position’ function allows you to fully or partially exit a single cryptocurrency position (with a position value greater than 10 USDT or negative position).
You can click on [Close Position] next to the BTC position and choose the assets to repay your BTC debt. You will be prompted to rank, in descending order, which assets to sell first via market orders to repay the debt.
Since your margin sold 2 BTC for 20,000 USDC, your profit after the repayment would be 20,000 - 14,000 = 6,000 USDC. If we ignore the fees and interests, you have earned a 60% profit from the trade.
Margin trading brings amplified risk. When the market moves in the opposite direction, you can use an OCO (One-Cancels-the-Other) order to mitigate risk.
Suppose after margin selling 2 BTC, BTC goes up. To mitigate liquidation risk, you can place an OCO buy order.
1. Go to the [Buy] tab, select [OCO] - [Repay].
2. Enter a buy price, such as 7,000 USDC, a stop price, such as 10,900 USDC, and a limit price, such as 10,905 USDC.
3. Enter the buy amount and click [Buy BTC].
The system will automatically execute the OCO order based on market conditions.
If BTC goes up to 10,900 USDC, your buy stop order will be placed at 10,905 USDC and the limit order will be canceled.
If BTC goes down to 7,000 USDC, your buy limit order will be placed at 7,000 USDC and the stop order will be canceled.
