How to play Binance Perpetual Contract? Understanding Binance Exchange Perpetual Contracts in One Article

Especially after Binance launched a STORJ/USDT 1-50 times perpetual contract in 2020, it attracted many investors to participate. However, for newbies in the currency circle, how to operate the Binance perpetual contract is urgent. The problem.

How to play Binance Perpetual Contract?

1. Log in to the Binance official website (if you don’t have an account yet, you can click here to register a new account). In this area, you can also find links to other pages, including currency Standard contracts (quarterly contracts), API access, spot and events. Under the Information tab, you’ll find links to Binance Futures FAQs, funding rates, index prices, and other market data. Access to your Binance account, including the action panel, is available on the right side of the top bar. You can easily view your wallet balance as well as your orders across the entire ecosystem.

2. You can perform the following operations here:

Hover the mouse over the contract type (default is BTCUSDT) and select the transaction you want to make.

Check the mark price (liquidation will be carried out based on the mark price, so please pay attention to this price).

View expected funding rates until the start of the next funding period.

You can view it in the current infographic. Switch between raw trading view and comprehensive trading view. In addition, you can also click "Depth Chart" to view order depth information in real time.

View real-time order book data. The accuracy of the order book can be adjusted in the drop-down menu in the upper right corner of this area (default is 0.01). View previous transaction information in real time on the platform.

As long as you see an arrow on the module interface, it means that the element can be moved, and you can also adjust the size of the module through the small arrow in the lower right corner. This makes it easy to create custom interface layouts.

#3. Personal trading activities can be monitored here. By switching between the different tabs, you can check the current status of your positions as well as open and previously filled orders. You can also find all trading activity and trading history for a specific time frame.

Monitoring of positions in the automatic deleveraging queue under automatic deleveraging (ADL) is also supported here (an important thing to note during periods of large fluctuations).

4. You can view available assets, deposit and purchase more digital currencies here. You can also view information related to current contracts and positions held here. Please be sure to pay attention to the margin ratio to avoid forced liquidation. Transfers between the contract wallet and other Binance ecosystems can be made by clicking "Transfer".

5. This is the order entry field. See below for detailed descriptions of the order types offered. Here you can also switch between Cross Margin and Isolated Margin modes. Click on the current leverage multiple (default is 20 times) to adjust the leverage.

Binance perpetual contract funding rate:

The key role of the funding rate is to narrow the price difference between the futures market and the corresponding spot market. In this case, it is the BTC/USDT trading pair .

Funding rate (F) = premium index (P) Clamp (0.03% - premium index (P), 0.05% to -0.05%)

Note: Clamp is used to limit "0.03 %-Premium Index (P)” is in the range of [-0.05%, 0.05%].

The funding rate is calculated every 8 hours. Only when you hold a position in any direction in the current time interval, you will be charged or paid the corresponding funding fee. If you do not have a position, you will not be charged or paid funding fees.

When the funding rate is positive, the long side needs to pay the corresponding amount to the short side based on the notional value of the contract; when the funding rate is negative, the short side needs to pay the corresponding amount to the long side based on the notional value of the contract.

Settlement fund calculation formula: Settlement fund = Notional value of position×Funding rate

The funding rate consists of 2 parts, the interest rate part and the premium part. Especially the latter explains why the price of the perpetual contract will converge with the underlying price trend.

There may be significant differences between the perpetual contract price and the mark price. In this case, the premium index will be used to promote convergence of trends in the two prices.

The funding rate has 2 hard cap limits to ensure leverage and promote stable market behavior. Binance does not charge any fees during the fund rate transfer process, and the funds are transferred directly between the long and short parties.

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