Binance Crypto Derivatives - How to trade Binance Derivatives in South Africa

Exchange trading is available online, so it can be accessed by almost anyone. But without specialist knowledge and training, you can quickly waste money and become disillusioned. You don't have to have a specialist degree, but it is important to get up to speed on the subject and learn the ins and outs of trading. 

What is Binance? 

Binance is one of the largest international cryptocurrency trading platforms. Founded in 2017 by blockchain developer Changpen Zhao, originally headquartered in Hong Kong (now based in Malta).

Today, the Binance exchange is one of the market leaders in terms of liquidity, offering users almost 600 trading pairs, including fiat, for transactions in many popular crypto assets. 

Binance provides standard exchange speculation and tools for margin and futures trading. From your desktop or mobile dashboard, Binance offers a wide range of trading options, including an impressive selection of market charts and hundreds of cryptocurrencies.

Binance derivatives trading platform
Binance derivatives trading platform

What are crypto derivatives? 

Buying cryptocurrencies directly is not the only way to invest in digital assets. Its alternative has been Binance derivatives. South Africa's Binance derivatives are cryptocurrency-based derivatives. Simply put, it is a contract that is linked to the exchange rate of a single digital asset or basket of coins.

For example, a bitcoin-based derivative (BTC) = a derivative with a link to the movement of the coin's price.

With Binance derivatives trading, it is possible to invest in a cryptocurrency, bypassing its direct purchase. Such an offering is particularly relevant for institutional investors. The fact is that large investors are interested in the legality of transactions. In the Binance cryptocurrency derivatives market, it is possible to transact in large amounts without fear of breaking the law, as the financial instrument does not involve direct interaction with digital assets.

What is a crypto derivatives exchange? 

Not only are there crypto-exchanges that allow cryptocurrencies and tokens to be traded, but there are also crypto-derivatives exchanges. Crypto-derivatives can often be found on the same crypto-exchanges as traditional crypto-exchanges, but not all of them. 

Binance derivatives trading platform has become very successful recently!

Crypto derivatives exchanges are online platforms that make it easy and open access for everyone to decentralised (P2P) cryptocurrency trading, directly and without delays. Binance cryptocurrency derivatives trading platform is an online platform that facilitates crypto-asset trading. Crypto derivatives offer speculators special features that tokens don't have, allowing them to trade in a more advanced and structured way. Give it a try and you're sure to succeed!

Binance provides fast and safe tranzactions
Binance provides fast and safe tranzactions

How does Binance cryptocurrency derivatives trading work? 

The buyer and the Binance derivatives trading platform Binance enter into a contract to buy or sell the asset on certain terms. All of the details of the transaction are fixed in a contract. It is important to clarify that the term crypto derivatives hides a whole group of financial instruments with their own characteristics. They share a common principle - the formation of agreements for a transaction that will actually occur in the future.

Remember that Binance derivatives are aimed at active traders and speculators who are constantly making trades. Due to low commissions and built-in leverage, crypto derivatives are particularly popular with speculators. 

It is better for beginners to get experience in trading, learn the basic concepts and learn to sense the signals to market movements first. After that, you need to develop your own risk-adjusted strategy for the crisis and highly volatile economy, and only then start working with crypto derivatives. Just do it!

How to trade Binance derivatives in South Africa? 

To capitalise on the volatility of the digital money market, investors use special Binance derivatives in South Africa, which help with less risk to make money from cryptocurrency. Cryptocurrency derivatives solve two main problems - reducing investment risk and earning from changes in the price of digital coins.

Since no one knows the future price of a cryptocurrency, all traders take some risk. Almost all crypto derivatives are based on the same principle: if the value of the asset drops on the day of execution, the seller will make a profit and the buyer will be left with a loss. If the digital coin rises in value, the buyer wins. Depending on the type of contract chosen, however, the nuances of earnings will differ.

Why trade on Binance?
Why trade on Binance?

The following advantages of Binance derivatives trading can be highlighted: 

  • Higher leverage (margin trading).
  • Lower commissions.
  • Protection against volatility.
  • Ideal for hedging.
  • Offers diversification.
  • High liquidity.

The reason for the interest in derivatives trading is clear. Many traders do not have enough money, so they are tempted to borrow money to increase the profit. But even on a rising trend, the price of the cryptocurrency tends to pull back traitorously, causing multi-billion dollar liquidations of long positions. In this case, switching to spot trading, where assets themselves are bought and sold instead of contracts for them, may be a smarter move.

How to register? 

Armed with the necessary minimum knowledge, you can start Binance trading cryptocurrency derivatives in South Africa. If you already have a Binance account, click "Sign in". If you are new to Binance, sign up by creating a new account. You can do this from the comfort of your computer or through the Binance mobile app.

Mobile app Mobile app
Mobile app Mobile app

You will have to enable two-factor authentication before you may trade on Binance Futures.

How do I open a live account? 

A live account on the Binance derivatives trading platform opens automatically upon registration. Once the registration process has been completed, you will be able to fund your account.

Registration in three steps
Registration in three steps

How do I make a deposit? 

Users can easily buy cryptocurrencies through a variety of payment methods, including bank transfer, credit or debit card, and cash. On Binance, there is a suitable payment method for every user. If you are storing cryptocurrency on another platform or in another wallet, it can be sent to a Binance wallet.

Cryptocurrency can be deposited either on the Binance website itself or via the Binance mobile app by selecting the wallet button. After confirming the withdrawal request, you need to wait for confirmation of the transaction. The confirmation time depends on the type of blockchain and the current network load.

Then you need to wait for the transaction to complete. Soon the funds will be credited to your Binance account.

Binance derivatives list

  • Futures is a contract to sell or buy an underlying asset at a future date at a pre-determined price. Binance offers USDS contracts - perpetual and deliverable futures settled in USDT or BUSD. and COIN-margined contracts - perpetual and deliverable futures settled in cryptocurrency. 
  • Options are a contract that gives the right, but not the obligation, to buy or sell an underlying asset in the future at a predetermined price. An example of options in real life is asking the seller to hold the commodity for a period of time.
  • Leveraged tokens are spot market traded assets that allow access to leveraged cryptocurrency trading without the risk of liquidation. Binance leveraged tokens make managing a regular leveraged position easy - users are not required to post collateral or maintain margin.
Binance derivatives list
Binance derivatives list

Alternatives to Binance cryptocurrency derivatives

Cryptocurrency derivatives are essentially a contract between a buyer and a seller for the future value of a digital asset. The parties to this transaction do not own the underlying asset for which the contract is drawn up. In this case, the subject of the transaction is the right to execute the contract. There are alternative types of cryptocurrency derivatives:

  • Forward. A futures contract that is concluded in the over-the-counter market. Also similar to a futures contract, except that the parties agree on all aspects of the contract - term, price, and termination clauses. Forward contracts can also be deliverable and settled.
  • Swap. This is a financial exchange transaction in which one contract involves the purchase and sale of the same asset, but on different terms. It is purely a speculative instrument, the purpose of which is to make a profit from the difference in the value of the contracts.

There are also other derivatives, for example swaption, credit default swap, CFD, warrants. But they are less popular and are unlikely to be of use to beginners.

Binance crypto futures
Binance crypto futures

How does Binance crypto futures trading? 

The idea behind trading cryptocurrency futures is that traders bet on the future price of a cryptocurrency. Cryptocurrency futures trading only became available at the end of 2017. Futures is an interesting financial instrument, which, if used correctly, can generate solid returns.

Today, crypto exchange Binance is the most popular due to its good reputation as a major trading venue. The exchange trades $1.5bn worth of futures per day.

The strategies that are used in futures trading are generally applicable to cryptocurrencies as well.  Binance crypto futures in South Africa is a contract in cryptocurrency trading, which is an agreement between two parties to buy or sell a cryptocurrency that is to occur on a certain date, at an assumed certain price. If the user believes that the cryptocurrency will rise in value by the end of the month, the user opens a long (upside) position on the cryptocurrency by buying a futures contract for the month. If the price is expected to fall, the user opens a short (downside) position. When the contract expires, both parties involved in the transaction settle and the contract is closed.

Binance crypto futures
Binance crypto futures

Pros of Binance crypto futures trading in South Africa:

  • Ease of trading. Futures trading is easier than cryptocurrency trading itself. You don't even need a cryptocurrency wallet to do it, and you don't need to delve particularly deeply into learning about the crypto industry. 
  • High returns. This perk should be understood as "currently high profits". The cryptocurrency market is currently on the rise, with prices rising with small pullbacks, so in general, cryptocurrency futures are now promising high profits. 
  • Hedging. Crypto futures are a kind of hedge, preserving crypto assets as the price of a futures contract has an expiry date. The price will persist even if the price of the asset itself drops before the contract is fulfilled.
  • Diversification. Crypto-futures allow you to diversify your capital by investing in futures of different cryptocurrencies and/or on different crypto-exchanges. Of course, the crypto market functions very synchronously, following the dynamics of bitcoin, but sometimes in different directions, and it is possible to profit from changes in the price of some altcoin, which goes against the market.
  • Down play. Futures trading allows you to make money on falling prices, by opening short positions.
  • Smaller deposit. With futures trading, you don't have to keep large amounts of money in your cryptocurrency account to make transactions, as you can make leveraged trades.

Binance derivatives, including cryptocurrency futures, allow traders to speculate on future asset prices. Trading Binance crypto futures in South Africa is capable of making profits with the right knowledge and risk management strategies to prevent serious losses. Therefore, before trading futures, you need to develop such a strategy, do a thorough analysis, and understand the benefits and risks of this instrument. We wish you a successful investment!

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