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Binance Australia Derivatives review

Binance Australia has expanded into crypto futures and CFDs trading – but only for wholesale clients.

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Binance Australia

Binance Australia Derivatives announcement

On 6 April, Binance Australia Derivatives announced in a blog post it would be winding down its operations. It will close all of its customers' open derivatives positions by 21 April, 2023.

Spot and other trading services on the Binance Australia exchange are unaffected.

Binance Australia Derivatives is the local derivatives arm of the Binance exchange. It offers a range of cryptocurrency assets that can be traded both long and short with perpetual contracts and leverage of up to 125x.

But it's not for everyone – you'll need to meet certain criteria in order to qualify and open an account.

Binance Derivatives is restricted to Australian wholesale investors. These are also known as sophisticated, experienced or professional investors and come with strict requirements such as high net wealth or holding an AFSL. As such, the platform is not available to everyday retail investors.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

What is Binance Australia Derivatives?

Binance Australia Derivatives offers over-the-counter (OTC) derivatives products, with crypto contracts for differences (CFDs) available to wholesale Australian clients under its Australian Financial Services Licence.

A cryptocurrency futures contract outlines an agreement to buy or sell digital currencies at a certain price on a specific date in the future. Futures contract buyers assume the obligation to buy the cryptocurrency associated with the contract, while sellers assume the obligation to deliver the relevant cryptocurrency asset upon the expiration of the contract.

For many traders, these contracts offer improved access to popular market sectors as well as novel ways of speculating on future price, beyond standard spot markets. Binance Australia Derivatives contracts are designed to implement high standards of quality and execution for investors speculating on the value of cryptocurrency assets.

Who can trade on Binance Australia Derivatives?

Binance Australia Derivatives is available to wholesale Australian clients only under its Australian Financial Services Licence.

What can I trade on Binance Australia Derivatives?

The Binance Australia Derivatives product offers USDⓈ-Margined Futures Contracts with up to 125x leverage.

USDⓈ-Margined Futures Contracts on Binance Australia Derivatives are perpetual and delivery contracts are quoted and settled in BUSD or USDT.

How do I create an account?

If you meet the qualification criteria for Binance Australia Derivatives, you can create account on the Binance exchange platform.

To register as an Australian wholesale client and access derivatives products, you must complete the Wholesale Client Assessment within the Binance exchange platform first.

What are the fees and how do they work?

One of the main advantages of trading on the Binance Australia Derivatives platform is its fee schedule.

In addition to the promotional trading discounts that are periodically made available, the Binance Australia Derivatives platform operates using a graduated Maker/Taker fee structure that is based on the size of each cryptocurrency position.

Binance Australia Derivatives for USDⓈ-M Futures Trading

Trading fee schedule for USDⓈ-M Futures as of 11 August 2022 Image: Supplied

When trading on the platform, it is important for traders to remember that fees are charged when a trade is opened and again when the trade is closed.

For example, a BTC trade of less than 250 might incur maker/taker fees of 0.020% and 0.040%. As a result, traders will be charged a fee of 0.020% when the trade is opened and 0.040% when the trade is closed. These fees change based on position size and they are not tied to leverage in any way.

Trading fees on the Binance Australia Derivatives trading platform are updated each day at 02:00 (UTC).

Risks to trading on Binance Australia Derivatives

Trading cryptocurrencies with a history of extreme volatility will always carry a certain level of risk that might not be present with more traditional asset classes (such as stocks or bonds). Derivatives add an additional layer of risk, including:

  • High leverage. Binance Derivatives offers extremely high leverage of up to 125x. This amplifies gains as well as losses, which means minor movements in the market can cause you to lose your entire position. Exercise risk management accordingly.
  • Volatility. Cryptocurrency markets are highly volatile which is further compounded by the use of leverage. Cryptocurrencies like Bitcoin are vulnerable to large, sudden jumps in price which can liquidate derivatives traders without warning.
  • Complex product. Derivatives like futures contracts and options are complex financial products that require sufficient knowledge and experience to use, which is why Binance Derivatives is restricted to wholesale investors.
  • Target for scams. Derivatives traders are known for dealing in large volumes, which makes them an ideal target for phishing scams. If you plan on trading derivatives, exercise extreme caution around your personal data, account details and security.

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