Binance launches pre-market trading platform (Pre-Market Trading)
Following the launch of pre-market trading functions by major centralized exchanges (such as OKX, BingX, Gate.io, etc.) in the past, Binance, one of the leading centralized exchanges, has finally launched its own pre-market trading function. A trading platform that allows users to trade tokens before they are officially listed.
What is premarket trading? Why do you need pre-market trading?
Pre-market trading means that users can buy or sell tokens before the spot of the new token is officially listed. Many Dapp users or airdrop participants will want to ensure that their airdrop shares can recover the cost before the new token is listed, or to ensure that they can obtain chips before the listing, and there is a need to buy and sell in advance. Therefore, the pre-market trading market was born in response to demand.
Pre-market trading rules
Past pre-market trading patterns
In the past, to conduct transactions or lock in profits before token issuance, you could go through the following modes:
Over-the-counter (OTC):
Matchmaking is usually carried out through an intermediary. The buyer and seller provide collateral to the intermediary, and the transaction is completed after the token is issued. Since the collateral is kept by the intermediary, the security and liquidity risks of the assets are greater.
Decentralized pre-market trading platform:
Some decentralized platforms provide pre-market trading functions (such as Whales Market), which integrate over-the-counter transactions into the on-chain platform, manage the collateral of both parties through smart contracts, and pay both parties after the transaction is completed.
Users can place take orders or place orders on the platform. Once the order is established, it cannot be canceled. Both parties must complete the transaction within a certain period of time, otherwise the collateral will be confiscated by the party that has not defaulted. In addition to safer funds, the bid price of the order and The transaction price will also be publicly displayed on the platform to achieve price transparency.
Contract trading on decentralized exchanges:
Some decentralized exchanges provide pre-market contract trading (such as AEVO). Users can lock in airdrop profits through short contract hedging on the platform, or perform contract trading to earn excess returns in advance.
Pre-market trading on centralized exchanges:
The same as pre-market trading on decentralized platforms, the two parties lock the collateral and deliver it within a certain time after the currency is issued.
Users must recharge the corresponding number of tokens for the order into the exchange account before the end of the centralized delivery time to ensure that the order can be completed. If the tokens are not recharged and delivered in time, the seller will default and lose all collateral. Such transactions will also Usually settled in U standard.
What’s different about Binance’s pre-market trading?
The rules for Binance pre-market trading are as follows:
Allow users and Launchpool participants to trade and hold the token on Binance before the spot is officially listed.
Users have a maximum token holding limit, and the specific limit will vary depending on each Launchpool project.
If the current user's spot account's pre-market trading token position exceeds the maximum position limit, he will not be able to continue to purchase tokens in pre-market trading, and there will be no restrictions on selling.
Before the start of pre-market trading, the token's storage, withdrawal and transfer functions will be suspended until spot trading is opened and resumed.
Binance pre-market trading process:
Launchpool subscription ends and tokens are distributed.
It is announced that pre-market trading will begin, and token deposits, withdrawals, and transfer functions will be suspended.
Pre-market trading ends, spot trading is open, and the deposit and withdrawal function opening hours are subject to the spot listing announcement.
Binance Pre-market Trading Steps Tutorial
1. Log in to Binance and find "Spot" on the transaction tab
2. When pre-market trading is open, you can find the "pre-market trading" option in the spot trading pair category, and the currencies that can be traded before the market will be displayed on the page.
Features of Binance Pre Market
Unlike other exchanges, Binance provides real-time token circulation. After users use Launchpool to obtain tokens, they can directly trade tokens through Binance pre-market trading. During this period, only Binance Launchpool can obtain tokens. The tokens will circulate in the Binance pre-market trading market, and chips cannot be added from the outside. This reduces the chip advantage of large investors to a certain extent and makes the pricing of pre-market trading more fair.
Advantages of Binance Pre-Market Trading
Open to everyone: not limited to Launchpool attendees.
No need to deposit collateral: capital operations are more flexible.
Instant circulation: no need to wait for delivery, no fear of counterparty default.
More potential trading opportunities: good market pricing effect.
Reduce the impact of large-scale market control: there is no external supply intervention, and the chips are relatively dispersed.
In other pre-market trading scenarios, defaults often occur due to the large gap between the pre-market order transaction price and the opening price. The integration of Binance pre-market trading and Launchpool perfectly solves this problem. In addition to allowing traders to Pre-market trading can make profits and gain more chips. The immediacy of the pre-market market can also increase the error tolerance rate of transactions.
Binance’s ambitions
I think Binance is on the side of retail investors this time.
This round of Binance’s Launchpool currency listing strategy has been questioned, whether it is listing so-called “VC coins” with high financing and high valuations, or major memes that were quickly listed on the shelves due to their popularity and popularity (such as the legend of $BOME, 3 Binance in the sky.) But no matter what it is, the main force holding a large amount of chips can always use the advantages of chips and funds at the opening of the market, the time when emotions and liquidity are highest, or even use the reason of on-chain congestion to postpone user withdrawals. Use currency and other tricks to control the opening price and realize it.
Now, after Binance lists the pre-market trading market, the above situation will be relatively slowed down a lot.
First of all, during the Launchpool period, all users obtain chips at the same rate. Although the number will be different due to the share of the Launchpool, with the addition of restrictions on deposits and positions, the chips on the market will be more dispersed, and It is easy to generate fairer trading data, and thus anchor the market after the market opens.
As Binance co-founder He Yi said:
"For projects that you are not optimistic about, in addition to buying long, you can also sell short. Low-risk option: financial management."
Binance Launchpool and pre-market trading are two powerful tools that provide flexible trading methods. Launchpool is a kind of financial management. After obtaining chips, you can buy long and sell short depending on your trading strategy, while Binance pre-market trading provides a way to get closer to the market. Consensus pricing.
After Binance integrates these tools, users can find the operation method that best suits them, whether it is mining and selling, swing trading, or long-term holding (HODL).
FAQ
How are the handling fees for Binance pre-market trading calculated?
The handling fee is the same as the spot trading fee. For details, please refer to Binance Exchange’s spot trading fee standards.
How are token prices determined for Binance pre-market trading?
The same as spot trading, the transaction price between the buyer and the seller shall prevail.
When does Binance pre-market trading end?
Binance pre-market trading ends no later than 4 hours before spot trading begins. The announcement of Binance’s spot listing will be released separately, and individual schedules may be adjusted, subject to Binance’s announcement.
Are there risks with Binance pre-market trading?
Pre-market trading only allows users to buy and sell Launchpool reward tokens in advance, and there is no risk in itself. However, newly listed tokens may fluctuate greatly, which in turn leads to the risk of asset fluctuations.
How will Binance transition to spot trading after pre-market trading ends?
After the pre-market trading ends, all unfilled orders will be automatically canceled.
Binance will continue to open spot trading pairs.
After the pre-market trading ends, the deposit and transfer functions of the token will be opened.
The withdrawal function will be open within 24 hours after the spot trading of the token goes online.
Who can participate in Binance pre-market trading?
Users who need to register a Binance account and complete KYC, agree to the trading rules and understand the potential risks of participating in pre-market trading are eligible for trading.
Are there any limited regions for Binance pre-market trading?
Users currently residing in the following countries or regions will not be able to participate:
Bahrain, Canada, Crimea region, Cuba, Donetsk (non-government controlled area of Ukraine), Dubai, Iran, Japan, Kazakhstan, Kherson (non-governmental controlled area of Ukraine), Lithuania, Luhansk ( (non-government controlled areas of Ukraine), the Netherlands, North Korea, Russia, Spain, Syria, the United Kingdom (Falcon), the United States of America and its territories (American Samoa, Guam, Puerto Rico, the Northern Mariana Islands, the U.S. Virgin Islands), Zaporozhye (non-governmental territory of Ukraine).
Please note that the above list of countries and regions is not comprehensive and may be updated regularly to comply with the latest laws, regulations or other requirements.
Conclusion and future prospects
Although Binance has an obvious goal and extends a friendly hand to retail investors, how much impact it can have on prices remains to be seen in the next few practices. According to Binance’s announcement, the pre-market trading function will be released together with the next new Launchpool announcement, so let’s wait and see.
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