How to Place Stop Loss and Take Profit Orders on Binance Futures

Last updated: 20 Aug 2024

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What is a stop order?

A stop order on Binance Futures is a combination of stop-loss and take-profit orders. The system will decide if an order is a stop-loss order or a take-profit order based on the price level of trigger price against the Last Price or Mark Price when the order is placed.

How to place a stop order?

Example 1:

User A places a trigger price order based on the last price.

As the trigger price (8,700 USDT) is lower than the last price, the order will be placed as a take profit order. You can check the order placed under [Open Order].

Example 2:

User A places a trigger price order based on the mark price.

As the trigger price (8,828 USDT) is lower than the mark price, the order will be placed as a “Stop Market Order”. You can check the order placed under [Open Order].

When will the stop order get triggered?

• The trigger time for take profit and stop loss orders depends on the mark price’s precision in relation to these orders.
• Keep in mind that the mark price is automatically truncated down to the price precision mentioned in the Trading Rules to calculate the trigger price. This is a key rule that governs the activation of the orders.
• This means the stop order can still trigger even if the mark price is fractionally above (in the case of a short position) or below (for a long position) the set trigger price.

Let’s say a user holds a long ETHUSDT Futures position and sets a take profit sell order that will trigger if the mark price is greater than or equal to $2,000.05.

The price precision for ETHUSDT is 0.01. Truncating down to this precision will determine whether the stop order should be activated.

If the mark price reaches $2,000.048914224, the truncated price will be $2,000.04. This is below the trigger price of $2,000.05, which won’t trigger the take profit order. If the mark price increases to $2,000.05000001, the mark price is truncated down to $2,000.05. This matches the trigger price, and as a result, the take profit order is triggered.

Let’s take another example where the user holds a short STMXUSDT position and places a take profit buy order that will trigger if the mark price is less than or equal to $0.00666. STMXUSDT's price precision is 0.00001, so the mark price is truncated down to this precision to determine if the stop order will trigger.

If the mark price reaches $0.006670234, the truncated price of $0.00667 is still higher than the trigger price of $0.00666. As a result, the take profit order will remain inactive. If the mark price drops to $0.00666999, the truncated price will equal the trigger price of $0.00666, thereby activating the take profit order.

Important Notes:

Binance uses the mark price as a trigger for liquidation and to measure unrealized profit and loss.

The mark price is generally a few cents from the last price. However, the last price might deviate dramatically and significantly from the mark price during extreme price movements. Hence, please monitor the price difference between last price and mark price. You can always cancel the order you have placed and replace the order if you would like to change the trigger from mark price to last price, or vice versa.

It is not advised to set the stop-loss trigger price close to the estimated liquidation price, liquidation may happen before the stop-loss order and cause the stop-loss order to expire.