Binance launches margin trading

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Updated: 11 July 2019
  • The updated trading platform on Binance allows margin trading
  • A newly optimised interface, including an improved trading engine, was also unveiled
  • Fees are 0.02%, except for the exchange’s native BNB coin, which has a fee of 0.01%
  • Leveraged trading is a popular tool in the conventional markets that allows traders to borrow funds from the broker for trading

Binance, a major cryptocurrency exchange, has announced the launch of the 2.0 version of its trading platform. The latest version brings margin trading to Binance customers.

“This is another step in providing an inclusive cryptocurrency trading platform catering to the needs of both advanced institutional traders and retail traders under the same roof. We are providing a new tool in the financial services and cryptocurrency markets to help amplify trading results of successful trades,” said Binance CEO Changpeng Zhao.

The crypto community has been eagerly waiting for Binance, the world’s largest cryptocurrency exchange by daily trading volume, to allow margin trading on its platform. The updated version of the platform has a newly optimised interface, which allows users to access the exchange platform and margin trading. The new platform also offers an improved trading engine for better order matching, which will ultimately lead to lower liquidations. Margin trading fees can be paid with Binance Coin (BNB), the exchange’s native cryptocurrency.

“Though the current cryptocurrency market and legacy platforms for margin trading poses greater risks and benefits at the same time, we are confident that its development, coupled with more knowledge on proper risk management, will help realize greater benefits in the long run,” Binance Co-Founder Yi He commented.

He added: “With margin trading being one of the most requested services from our community, this is a testament to the large market demand from retail and institutional traders alike and its promising possibilities in the future.”

Margin, or leveraged, trading is a popular tool used in conventional markets. Traders borrow funds from the broker to trade an asset, which is then used as collateral for the loan from the broker. Thus, this type of trading tends to amplify both gains and losses. It is usually only recommended for more experienced traders.

“Your Margin Wallet balance determines the amount of funds you can borrow, following a fixed rate of 3:1 (3x). So if you have 1 BTC, you can borrow 2 more,” the firm clarified in a tutorial.

Binance has committed to “continue informing and raising more awareness on conscious trading for its communities on margin accounts to help them realize better profitability, lower risks and more portfolio diversification”. A guide on Margin Trading on Binance has also been made available on the Binance Academy, the exchange’s educational portal.

The daily margin rate is 0.02% for bitcoin (BTC), ethereum (ETH), ripple (XRP), tron (TRX) and tether (USDT), while the rate for BNB is 0.01%. No fees are applied for transferring funds from the Margin Wallet to users’ primary wallets.