The so-called “COIN-margined” derivatives should help users to diversify their trading, says Binance Futures.
Crypto exchange Binance has launched new “COIN-margined” perpetual futures contracts priced in Bitcoin, according to a press release.
Unlike traditional futures contracts, where buyers and sellers are obligated to execute the deal on a set date regardless of the current market conditions, perpetual ones don’t have an expiration period. This means that traders can hold their positions indefinitely.
Binance’s latest derivatives are also “inversed,” meaning that they’re margined and priced in Bitcoin and other cryptocurrencies instead of fiat. Margins are a form of loan borrowed from a brokerage and used to buy various assets. These loans are usually denominated in US dollars or other traditional currencies.
Binance’s perpetual Bitcoin-priced futures, just like their previously launched quarterly counterparts, allow the leverage of up to 125x—a factor by which a margin trade’s value—as well as the risk—could be multiplied.
According to the announcement, Binance’s crypto-margined quarterly and perpetual futures aim to help users further diversify their trading methods and improve margin efficiencies.
As Decrypt reported, activity on regulated Bitcoin futures exchanges and Ethereum futures volumes have recently hit another new all-time high, suggesting a growing interest from institutional investors.