Binance Exchange Opens Margin Trading Platform with 2.0 Update
After weeks of limited testing, the much-awaited margin trading launches on Binance this Thursday, expanding risk exposure possibilities.
Binance has finally launched its Margin Trading platform, as part of the effort to offer wider options to the cryptocurrency community. Binance’s margin trading is a feature already widely accepted on traditional asset markets.
“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,” said CEO of Binance, Changpeng “CZ” Zhao.
“We are providing a new tool in the financial services and cryptocurrency markets to help amplify trading results of successful trades.”
Binance tested margin trading for weeks with eligible clients, and the trading should start within days.
The Margin Trading platform is part of the Binance 2.0 upgrade, with an improved order matching through an advanced trading engine, as well as margin trading calculations to fine-tune liquidations. The improvements arrive two years after the launch of Binance as a basic exchange. Since then, the Binance ecosystem evolved to include a decentralized exchange, a token sale platform, and a proprietary blockchain, Binance Chain. Binance has also encouraged development through Binance Labs to incubate new projects, and offers blockchain and trading education through Binance Academy.
“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,” said Yi He, co-founder of Binance.
“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.”
Binance Margin offers options for multi-currency collaterals, as well as paying margin fees with Binance Coin (BNB). Users can move funds between the Margin Wallet and their primary Binance balance wallet without fees.
Margin trading potentially allows for larger gains based on buying assets with borrowed funds. But if the value of the acqured assets falls below a certain threshold, margin calls, or the requirement to pay funds to cover the difference in price, may cause deep losses.