Do you trade crypto margins? Here are some amazing tips just for you.
1. Get amazing rewards from Margin Trading!
Binance offers Margin Traders an avenue to get rewarded through its Funday Friday reward program. The event happens every Friday (from Jan 14, 2022 09:00 (UTC))
Traders who have the Binance Margin account and complete KYC verification are eligible. Traders with a daily average Margin trading volume of 1000 BUSD or more are qualified as well. Users from the restricted countries are currently not supported.
This program was created to share rewards. Rewards are received based both on your Margin trading volume and total borrow amount.
Every Friday at 00:00 UTC=8, Binance takes 20% of the income from Binance Margin transaction fees. 5% are distributed based on average borrow amount, and the other 15% are distributed based on average trading volumes. The rewards are sent in BUSD.
The rewards are calculated thus;
a. Rewards based on your trading Volume:
Your Margin daily average trading volume divided by the average trading volume of all Margin users.
Income from Binance Margin transaction fees for the period between 16:00 (UTC) of the previous Thursday to 16:00 (UTC) of the previous Thursday to 16:00 (UTC) of the current Thursdy.
The average daily trading volume should be no less than 1000 BUSD. If your average daily trading volume is more than 50,000 BUSD, it will be calculated as 50,000 BUSD.
b. Rewards based on your Margin borrow amount:
Rewards here are gives based on your average Margin borrow amount divided by the daily average Margin borrow amount of all Margin users.
Your daily average borrowing amounts includes both cross margin and isolated margin. Binance takes a record of borrow amount every Thursday for the period from 16:00 (UTC) of the previous Thursday to 16:00 (UTC) of the current Thursday.
The least average borrow amount to qualify is 100 BUSD while average daily Margin borrow amount ≥ 100,000 BUSD will be calculated as 100,000 BUSD.
The 20% fee income and average daily net borrowing/trading volume will be calculated based on the price of the BUSD trading pairs of the eligible assets on Binance at 16:00 (UTC) each day within the promotion period.
Eligible and qualifying trader’s spot account will be credited directly after they claim the bonus. Bonuses will expire if they are left unclaimed within 5 days.
Sub-accounts trading volume and borrow amount will be counted under the parent accounts.
2. You may be wondering what Margin Trading is; it is a method or approach of trading assets through funds provided by a third party. Margin accounts allows traders to access greater number of capitals which enables them to leverage their positions. Traders are allowed to maximize profits on every successful trading as margin trading amplifies trading results. In cryptocurrency trading, funds are mainly provided by other traders who earn interests based on market demands for margin funds. Meanwhile in traditional markets, the borrowed funds are usually provided by investment brokers.
3. Three Important Advices for Crypto Margin Traders
With margin trading, you can add leverage to your positions to stand a better chance at earning more profits.
a. Margin levels are used by Binance to evaluate the risk level of your Margin Account.
· The net assets in your Cross Margin Accounts may be used while participating in Margin Loans as collateral, and the digital assets in any other accounts are not included in the margin for cross margin trading.
· The Margin Level of a Cross Margin Account = Total Asset Value of a Cross Margin Account/(Total Liabilities + Outstanding Interest), where:
Total Asset Value of a Cross Margin Account = Current total market value of all digital assets in the Cross Margin Account
Total Liabilities = Current total market value of all outstanding Margin Loans in the Cross Margin Account
Outstanding Interest = Amount of each Margin Loan * the number of hours as loan time by the time of calculation * hourly interest rate — deduction/paid interest.
· Margin level and related operation
Leverage 3x
When your margin level > 2, you can trade and borrow, and transfer assets to the Spot Wallet;
When 1.5 < margin level ≤ 2, you can trade and borrow, but you can’t transfer funds out of your Margin Account;
When 1.3 < margin level ≤ 1.5, you can trade, but you can’t borrow, neither transfer funds out of your Margin Account;
When 1.1 < margin level ≤ 1.3, a margin call will be triggered and you will receive a notification through mail, SMS and website to inform you to add more collateral (transfer in more collateral assets) to avoid liquidation. After the first notification, you will receive the notification every 24 natural hours.
When margin level ≤ 1.1, the liquidation engine will be triggered and all your assets will be liquidated to pay back the interest and loan. The system will send you a notification through mail, SMS and website to inform you. When the margin level returns to 1.5, the system will stop the liquidation process.
Kindly refer to Cross Margin Trading Rules for more information.
b. Making good use of the cooling-off period
In a bid to encourage responsible trading, Binance has successfully launched and initiated the cooling off period for margin trading. With the cooling-off trading period you are allowed to temporarily suspend all margin trading activities for a specified period. Cooling off periods can be set at 1 day, 3 days, or a week as your needs require. Cryptocurrencies cannot be borrowed or used during the cooling-off period.
Traders can adopt the use of this feature to limit and control their trading activities especially in trying situation which includes losses and pressures.
As discussed earlier it helps traders to trade responsibly.
c. Using Isolated or Cross Margin Account
Here the net assets in the user’s isolated margin account can only be used as the collateral in the corresponding account, and the assets in the user’s other account (cross margin account or other isolated account) cannot be used as collateral for it.
· The margin level of the isolated account = the total value of assets under the isolated account / (total value of liabilities + unpaid interest)
Among them, the total value of assets = the total value of the underlying assets + nominal assets in the current isolated account
Total liabilities = The total value of the assets that have been borrowed but not returned in the current isolated account
Unrepaid interest = (the amount of each loaned asset * the time length of the loan * hourly interest rate) — repaid interest
Kindly refer to isolated margin trading rules for more information.
In conclusion, the risks that traders are opened to while trading on Margin, Binance offers the safest and lowest risk of trading with its amazing features showing that Binance has the key interest of its users at heart. Margin traders are also rewarded based on their trading activities, if you would ask me, I would say that is mouthwatering.
Create a free Binance account here.
Start Binance margin trading here and join the league of safe traders today.
Do let me know in the comments how you feel about this post and your questions too.
Thanks for your time.
Trade safely with Binance.
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