In this beginners guide, we explain what is Binance margin trading and go through their “Margin Reduction Promotion” and how to make the most of it for your future trades.
If you’ve been a crypto trader, the chances are that you’ve been utilizing margins to amplify your generated returns. And while these borrowed funds allow you better exposure to the market, the interest rates on these margin funds play a crucial role as they help determine the potential of a lucrative deal.
So, let’s dive in and take a look at how you can take advantage of Binance’s “Margin Reduction” promotion.
What is Binance Margin Trading?
Margin trading allows you to trade assets using funds provided by a third party. It is similar to what traders do in stock markets. However, unlike in stock markets where you borrow funds from a broker, funds here are often provided by other traders, who earn interest based on market demand for margin funds.
Margin accounts enable traders to access greater sums of capital and amplify trading results. This way, a trader can earn greater profits from the same amount of money. While margin trading has been a popular tool in low volatility markets, it has now been widely used by traders in volatile markets like crypto.
Why is Binance Margin Good For You?
While the Binance Margin’s interest rate reduction is a promotional event, there’s more to the Binance margin, which can help you amplify your market exposure. Multiple factors make Binance Margin a reliable method for you to leverage trading orders via borrowed capital. There are many factors that help Binance Margin stand out in the sector.
1. Diverse Pairs for Trading
Binance Margin has over 600 trading pairs. Being a customer, you’ll have ample opportunities to strategize your leverage positions on primary tokens like Ethereum and Bitcoin. Besides the staples, users of Binance Margin can also access a variety of small-cap altcoins, like VeChain (VET), Cosmos (ATOM), and The Sandbox (SAND), among others.
2. Multi-Asset Collateral
Binance’s multi-asset collateral feature allows users a dedicated margin across different margin assets to trade USD-M Futures. The Multi-Asset Collateral Mode present over the platform supports XRP, BTC, ETH, BNB, SOL, USDT, ADA, DOT, BUSD, and USDC at different collateral ratios.
Simply put, this feature of Binance will allow users to offset their accrued losses in trading futures contracts with a similar margin asset.
For example, users can distribute their margin across BUSD and USDT-margined positions to diversify their portfolios across digital assets while increasing capital efficiency.
3. Cooling-Off Period
Binance’s latest effort of reducing the interest rate is to promote responsible and better trading practices has been the cooling-off feature. This feature will allow worn-out users from revenge trading by blocking themselves from accessing margin trading for a specified time. For example, margin traders can block themselves for a day, three days, or even a week to prevent their portfolio from attracting uncalculated losses.
4. Margin Insurance Fund
The Margin Insurance Fund is a repayment strategy covering the losses of margin accounts that go bankrupt or have insufficient collateral for repayment of borrowed capital. Margin insurance funds act as a safety net over such instances, allowing seamless operations over the platform and preventing any problems associated with liquidity if several users go bankrupt over a short period.
How to Save More With Binance Margin?
If you’ve been on the fence about signing up for Binance, now might be a perfect time! With the ongoing promotional event on our platform, traders have the best chance to enjoy better returns with their strategy.
A massive interest reduction is a great approach to reducing the price of margin trading orders and making trades more lucrative. So hurry up and earn better with a chance to get up to an 80% discount during the promo.
Crunching the Savings
Imagine you’ve borrowed 10K USDT from Margin. As per the normal interest rates, you’d have to pay 14.6% annually, summing it up to 4 USDT interest per day normally.
However, when applying for margin under the latest promotional event, you’ll have to pay an interest rate of just 7.3% if you’re a regular user. This way, you’ll have to pay just 2 USDT interest per day.
Once you use the promotional event as a VIP 1 level user, the interest rates would be slashed down to 6.94%, making the interest per day around 1.75 USDT. Similarly, if you’re a VIP 5 or VIP 6 level user, your interest rates would be around 2.91%, adding to your savings by 3 USDT which you would have to pay at the traditional interest rate of 7.3%.
Now, imagine using a margin level of VIP 9 and attracting a fee of just 1.19%. Here, the borrower will access better margins while saving 80% or 3.2 USDT in interest per day.
Let’s look at the table to understand the interest scenarios:
|BTC & ETH||BUSD & USDT|
|VIP Level||Previous Int. Rate(Annual)||New Tiered Int. Rate(Annual)||Previous Int. Rate(Annual)||New Tiered Int. Rate(Annual)|
Note: The interest rate on your margins is a result of your VIP level. Additionally, since Binance has not yet announced the expiration of their promotional event, your savings here are time-sensitive.
Binance Margin Reduction Promotion
Being a trader, you can now use Binance’s exclusive ‘margin reduction’ promotion to make the most of your future trades. In its mid-March announcement, Binance announced the new promotion for a reduction in interest rate, which will lower the rates of Bitcoin (BTC), Tether (USDT), Ethereum (ETH), and Binance USD (BUSD) loans—allowing the savings, in some cases, to reach up to 80%!
In simple words, Binance Exchange has launched an exclusive promotional campaign to reduce the interest rates on certain borrowed crypto capital. The recently launched promotion is a bid to help the platform’s users secure better chances of making profits.
- Depending on their VIP levels, users can now avail of up to 80% discount on Binance Margin orders and make a maximum profit off low-interest rates.
- Access diverse trading pairs of both staple and smaller altcoins via Binance Margins.
- The cooling-off period feature on Binance Margin will save traders from revenge trades by locking them off margins for a set time.
Let’s understand the math behind the 80% savings and see how traders can earn significant profits from their borrowed margins. We’ll also show you how it adds to the overall profits users will earn.