Binance’s futures platform is increasing maximum leverage and margin on Bitcoin (BTC)/Tether (USDT) contracts to 125x, according to a press release shared with Cointelegraph on Oct. 18.
Support for the contracts went live at 9:00 am UTC, with traders able to select 1x-125x leverage, with large positions adjusting to lower leverage allowed. As the press release notes:
“At 125x leverage, a 100 USDT collateral deposit on Binance Futures will allow users to hold 12,500 USDT in BTC.”
Balancing risk with efficiency
According to BInance, highly leveraged trading is being introduced using a “sophisticated risk engine and liquidation model,” a fast matching engine that “enables continuous margin without any jumps, and ‘mark prices’ for preventing unnecessary liquidations and combatting market manipulation.”
Changpeng Zhao (CZ), Binance’s CEO, said that the platform has seen increased institutional participation in trading, with professional traders driving the need to introduce cost and performance efficiencies ways to support very fast trades.
Alongside a risk management system, Binance offers traders an ‘insurance fund’ that can reportedly help to limit the chances of auto-deleverage.
Aaron Gong, Director of Binance Futures, said the platform was seeing rising numbers of traders transferring “in and out from spot to futures during volatile periods.”
Outperforming rivals
Earlier this week, Cointelegraph reported that Binance’s Bitcoin futures product was the only strong performer in a lackluster market this week, as trading volume on the cryptocurrency markets hit local lows.
As analyst Skew Markets noted on Twitter, the product set a new daily trading volume record on Oct. 15, at over $700 million. By comparison, Bakkt managed 10 BTC ($81,000 at the time).
Yesterday, CZ professed he was confused by the price decline of native exchange token Binance Coin (BNB) in recent months, which was trading over 50% lower than its all-time high in June.
Nonetheless, fresh data published on Oct. 17 indicates that Binance earned roughly $185 million in Q3 2019 — its second-best quarter ever.