For collateral, in the following example, we will use USDT, a stablecoin pegged to the US dollar. Let’s say you would like to short Bitcoin or Ethereum on the Binance Margin Trading platform and assume you already have a Margin Trading account on Binance.īefore you can borrow Bitcoin or Ethereum, you first need to transfer some crypto assets to your Margin Wallet so it can be used as collateral. How to Short Bitcoin or Ethereum on Binance Margin Trading – steps The difference between the cost of buying and selling makes your profit (in this example, it will be $100,000 – $80,000 = $20,000, minus the interest payments and fees). Return the borrowed capital to the lender, in this case, the Binance exchange, plus interest incurred.ĥ. Because you believe that the price of Bitcoin is going to drop, you borrow 2 BTC from Binance and sell it at market value. Let’s look at this in a practical example:ġ. Your goal is to price of the cryptocurrency you are shorting decrease so that you can make a profit on the difference between the high sale price and the low repurchase price. ![]() ![]() Then sell the funds and wait for the price to decrease to repurchase them and make a profit. You, as a trader, borrow a certain amount of Bitcoin or some other cryptocurrency on an exchange that you can trust, like Binance. How does shorting work?Īnd if that doesn’t have to be the case, shorting is usually done with borrowed funds. Short selling of digital assets is a common strategy for short-term and long-term traders.īesides the crypto sphere, shorting is very popular in basically any financial market, like the Forex, stock market, commodities, etc.Ī long position is the opposite of a short-selling (shorting), and that is the situation when a trader buys an asset to sell it later at a higher price. So instead of just waiting for the price of his asset to increase in the future and thus make a profit, he uses such price shifts to make “instant” profits and increase his initial capital. If you sell a certain asset at a higher price and later repurchase it at a lower price, then this trade is called short selling or shorting.Ī trader who is “bearish” on that asset enters a short position expects the asset’s price will decrease in the near future. How to short on Binance without leverage.How to short bitcoin with leverage on Binance futures.What are the Risks with Shorting Bitcoin?.Can I Earn Good Profits from Shorting Bitcoin?.How to short Bitcoin on Binance Options – steps.How to Short Bitcoin or Ethereum on Binance Margin Trading – steps.
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