FAQ

We get a lot of questions about SPOT, futures, and margin deals according to our trading recommendations and here we are going to explain a few aspects of it.

All explanations will be based on the Binance platform and as simple and short as possible so no wasting time - let's go.

• The first option the Binance platform provides is SPOT trading (you buy and sell physical tokens if we can say like this in case of digital tokens) It means you can buy 10 BTC and you will be the owner exactly 10 BTC no matter how much it costs. Also, it means if you have no tokens you have nothing to sell.

What are the advantages? First, you can hold your tokens any period of time until you want to sell them. Second, the SPOT platform has 'oco orders' or One-Cancels-the-Other (it gives you an option to set take profit and stop-loss order the same time, and when one of them will be reached another one will be canceled) Here is a more detailed https://www.binance.com/en/support/faq/360032605831

• The second option is margin trading. Just forget about it... it was implemented so inconveniently on Binance and it will be better to use "Futures"
• The third option is Futures. There is a place where we don't use physical tokens, here we use 'contract for price difference' It means if you buy 10 BTC you are not the owner 10 BTC you are the owner of the contract which shows at what exactly price you have bought them. If the price has raised a little since the moment you bought you 10 BTC you can show your contract and the platform pay off the difference in this case in your benefit. But if the price has drop since the moment you bought you 10 BTC you will be pay off the difference in this case Binance benefit. Here is a more detailed https://www.binance.com/en/support/faq/360033162052

When you make your deals via 'Futures' ALWAYS USE STOP-LOSSES orders. If you forgot it once you can lose all your deposit.

So what our recommendations?

• Use 'SPOT' to open longs and use 'Futures' to open short positions.
• Don't use margin options from Binance.

Why we mark short positions as 'margin' but don't recommend using margin?

Short positions are a priori marginal, so we can not mark them differently. But in the case of Binance, it is more convenient to open short positions on 'Futures'.

One more thing...The difference in quotes of one and the same pair is extremely insignificant, so our trading recommendations are suitable for all types (SPOT/Margin/Futures).

Of course, Binance has wider settings that will suit more advanced users, the task was as short as possible to answer most questions.