In just under a year, Binance has become one of the largest cryptocurrency exchanges that offer Bitcoin futures trading. The popularity of the platform is the reason why investors want to learn how to short bitcoin with leverages on Binance futures.
If you don’t open a long position, then you can open a short position with futures contracts. Binance allows you to either long or short positions of Bitcoin with leverages. Despite that, the question most investors ask is how to short bitcoin with leverage on Binance futures. We will address shorting bitcoin with leverages in this post.
Shorting Bitcoin with leverage on Binance
Knowing how to short bitcoin with leverage on Binance futures is key to becoming a successful futures contracts’ trader on the platform. When you take a short an asset, it means you agree to sell the asset at a set price on the contract’s expiration date.
Steps to Short Bitcoin with Leverage on Binance
On Binance, investors and traders have the option to use leverage up to 125X for longing or shorting Bitcoin futures. If you desire to short Bitcoin using leverages on Binance futures, follow these steps:
- Visit the Binance platform and get an account with them if you don’t have one. If you already to, then you can log in to your account.
- Go to the main dashboard of the exchange and navigate to the ‘FUTURES’ tab and click on it. Click on the futures tab that pops up, and it will direct you straight to the Binance futures platform.
- For first time users, you have to activate your Bitcoin futures account before you are allowed to short or long Bitcoin futures on Binance.
- Binance supports a wide range of other cryptocurrency futures. Hence, ensure that you select the BTCUSDT ticker on your future account.
- Binance, unlike the other major crypto futures platforms, allows users to stake their trades in USDT instead of BTC. This is because Binance uses perpetual swaps instead of inverse perpetual swaps. As such, the contracts are settled in USDT instead of BTC.
- Choose the transfer account and transfer USDT from your main Binance account to the futures trading platform
- After funding your futures account, select the leverage you wish to trade with. At the top of the site, you will see a sign of 20X displayed, which denotes the leverage. Click on it and adjust the leverage to suit your trading style. Binance supports up to 125X leverage when trading Bitcoin futures.
- Navigate to the bottom of the Binance futures site and click on the Sell/Short button. The margins required to trade Bitcoin futures on the platform depends on the BTC order quantity. Thus, the trader has to make sure that they have sufficient BTC on their futures account to support the short position they are opening.
- We recommend that traders set the stop-loss and take-profit limits as leverages are involved. The stop loss-limit helps reduce the losses when the market doesn’t contradict your prediction, and the take-profit limit allows you to go with your profits if the market is performing as expected and you don’t wish to ruin your trade.
If you follow these steps, then it would be easy to short bitcoin with leverage on Binance futures.