Key Takeaways
Binance Spot Trading follows a set of predefined rules to ensure fair and efficient market operations.
Different order types are available, including Limit, Market, and Stop-Limit orders, with various filters applied to trading pairs, such as price, lot size, and notional value constraints.
Understanding precision rules is essential for ensuring order validity and compliance.
Binance enforces rate limits to ensure stable trading operations.
Introduction
Spot trading allows users to buy and sell cryptocurrencies at real-time market prices. To ensure stability, protect traders, and facilitate fair execution of trades, exchanges implement a set of structured rules. These rules define how orders are placed, executed, and settled, benefiting both market makers and takers.
In the article, we will walk through the main components of Binance Spot Trading rules, including:
Supported order types and their behaviour.
Trading filters and constraints (price, quantity, notional value, etc.).
Precision rules and rounding guidelines.
Self-trade prevention (STP) modes.
A practical example of placing a compliant limit order.
Understanding these aspects is crucial for optimising trading strategies and ensuring all actions comply with exchange requirements.
Exchange Information: Understanding Trading Constraints
Binance provides a REST API endpoint, named /exchangeInfo, that details the trading rules, filters, and constraints for all supported trading pairs. This endpoint provides essential information for placing compliant orders and ensuring smooth trading experiences.
Structure of exchangeInfo endpoint
The symbols array in the exchangeInfo response provides detailed information about each trading pair. Some essential fields include:
symbol: The trading pair identifier (e.g., BTCUSDT).
status: Indicates whether the pair is actively tradable.
baseAsset & quoteAsset: Defines the base and quote assets for the trading pair.
baseAssetPrecision & quoteAssetPrecision: Precision rules for quantity values. Precision refers to the number of decimals on baseAsset & quoteAsset.
orderTypes: Lists the supported order types for this trading pair.
icebergAllowed: A boolean indicating whether iceberg orders are allowed. Iceberg orders allow traders to execute large trades while only displaying a portion of the total order in the order book.
filters: Contains a list of applicable filters (e.g., price, lot size, notional value constraints).
defaultSelfTradePreventionMode: The default STP mode assigned to this trading pair.
allowedSelfTradePreventionModes: Lists the STP modes that traders can apply to this pair.
Detailed Overview of Filters
Each trading pair is subject to various filters that ensure valid order execution. Filters prevent invalid trades and enforce exchange rules to maintain a stable trading environment. Below is an in-depth look at the available filter types:
PRICE_FILTER
Defines the minimum, maximum, and tick size for price changes and ensures that the order price is within the allowed range and follows correct price increments.
Example:
Consider the following PRICE_FILTER parameters:
minPrice: 0.01, maxPrice: 1000000.00, tickSize: 0.01.
A valid order price is 25000.0.
An invalid order price is 25000.015 (not a multiple of tickSize).
LOT_SIZE
Specifies the minimum, maximum, and step size for order quantities (number of units in a trading transaction) and ensures that the trade quantity adheres to Binance's quantity constraints.
Example:
Considering that minQty is 0.0001, maxQty is 100 and stepSize is 0.0001.
A valid order quantity is 0.0002.
An invalid order quantity is 0.00025 (not a multiple of stepSize).
ICEBERG_PARTS
Defines the maximum number of iceberg order parts allowed for an order. Iceberg Orders allow large orders to be executed in smaller visible parts to prevent market impact.
Example:
Considering that the limit is 10 (an order can be split into at most 10 visible parts).
A valid iceberg order is a 100 BTC order displayed in 10 parts of 10 BTC each.
An invalid iceberg order is a 100 BTC order split into 20 parts (exceeds the limit).
MARKET_LOT_SIZE
Similar to LOT_SIZE, but applies only to market and limit orders. Ensures that orders stay within the allowed quantity range.
Example:
Considering that minQty is 0.001, maxQty is 50 and stepSize is 0.001.
A valid market order quantity is 10.001.
An invalid market order quantity is 10.0005 (not a multiple of stepSize).
TRAILING_DELTA
It defines the minimum and maximum trailing delta values for trailing stop orders. Trailing Stop Orders adjust dynamically based on price movement.
Example:
Considering that minTrailingAboveDelta is 10, maxTrailingAboveDelta is 2000, minTrailingBelowDelta is 10 and maxTrailingBelowDelta is 2000.
A valid trailing stop order is 10 points above/below the current price.
An invalid trailing stop order is 5 points above/below the current price (below the allowed minTrailingAboveDelta/minTrailingBelowDelta).
PERCENT_PRICE_BY_SIDE
Determines the valid range for the order price relative to the average of previous trades. It is used to prevent drastic order prices that could disrupt the market.
Example:
Considering that bidMultiplierUp is 5, bidMultiplierDown is 0.2, askMultiplierUp is 5 and askMultiplierDown is 0.2.
The highest possible bid price is 5x the average price.
The lowest possible ask price is 0.2x the average price.
NOTIONAL
Ensures that the total notional value of an order meets a minimum requirement.
Example:
Considering that minNotional is 5.
A valid order: 0.002 BTC at 2500 USDT = 5 USDT.
An invalid order: 0.001 BTC at 2500 USDT = 2.5 USDT (below the required minNotional).
MAX_NUM_ORDERS
Limits the total number of open orders allowed per trading pair
Example:
Considering that maxNumOrders is 200.
If a user already has 200 active orders, any additional order will be rejected.
MAX_NUM_ALGO_ORDERS
Restricts the number of open algorithmic (stop-limit) orders.
Example:
Considering that maxNumAlgoOrders is 5.
A valid scenario is a user placing 5 stop-limit orders.
An invalid scenario is a user trying to place a 6th stop-limit order (exceeding the limit).
Supported Order Types
Each trading pair supports a variety of order types that allow users to execute trades under different conditions. These include:
LIMIT: Buy or sell at a specified price.
LIMIT_MAKER: Ensures the order is placed as a maker order.
MARKET: Buy or sell immediately at the best available price.
STOP_LOSS: A market order that activates when the stop price is reached.
STOP_LOSS_LIMIT: A limit order that activates when the stop price is reached.
TAKE_PROFIT: A market order that activates when a predefined profit level is reached.
TAKE_PROFIT_LIMIT: A limit order that executes when a predefined profit level is reached.
Self-Trade Prevention (STP) Modes
Binance supports STP to prevent users from unintentionally matching with their own orders. The STP modes include:
EXPIRE_TAKER: The incoming order (taker) is canceled if it would match an existing order from the same user.
EXPIRE_MAKER: The existing order (maker) is canceled if it would match a new order from the same user.
EXPIRE_BOTH: Both orders are canceled if they would result in self-trading.
NONE: No self-trade prevention is applied, meaning orders from the same user may match with each other.
Precision and Rounding in Binance Orders
Binance enforces precision rules to prevent invalid orders. Orders that don't conform to price tick size or lot size step values will be rejected. Common issues include:
Invalid price increments: If a price does not match the tickSize, it must be rounded.
Invalid quantity increments: If an order quantity does not align with stepSize, it needs adjustment.
Notional value errors: Orders below the minNotional will be rejected.
Solution: Always retrieve exchangeInfo to get precision filters and round values before submitting orders.
Example: Fetching Information for Placing an Order
To place a valid order, traders must adhere to exchange filters. The following script retrieves filter data.
import requests
import decimal
# Function to fetch trading pair precision and filters
def get_pair_filters(symbol):
url=f"https://api.binance.com/api/v3/exchangeInfo?symbol={symbol}"
response=requests.get(url)
if response.status_code == 200:
data=response.json()
symbol_info=data['symbols'][0]
price_filter=next(f for f in symbol_info['filters'] if f['filterType'] == 'PRICE_FILTER')
lot_size_filter=next(f for f in symbol_info['filters'] if f['filterType'] == 'LOT_SIZE')
return {
"min_price": decimal.Decimal(price_filter['minPrice']),
"tick_size": decimal.Decimal(price_filter['tickSize']),
"min_qty": decimal.Decimal(lot_size_filter['minQty']),
"step_size": decimal.Decimal(lot_size_filter['stepSize'])
}
else:
print("Error fetching exchange info:", response.json())
return None
# Example usage
if name == "__main__":
symbol = "BTCUSDT"
filters = get_pair_filters(symbol)
if filters:
print("Fetched filters for", symbol)
print(filters)
else:
print("Could not fetch filters.")Closing Thoughts
Understanding Binance Spot Trading rules is crucial for effective and strategic trading. The exchangeInfo endpoint provides key insights into order types, trading filters, and precision rules, helping traders place valid orders while avoiding unnecessary rejections. Additionally, rate limits ensure stability and prevent excessive API requests from impacting market operations, promoting a more reliable trading experience.
By leveraging the exchange filters and order constraints, traders can refine their strategies, optimize trade execution, and comply with Binance’s trading guidelines. A thorough understanding of these rules enables traders to operate efficiently, reduce errors, and mitigate risks associated with incorrect order placement.
For deeper insights and continuous updates, traders are encouraged to refer to Binance’s API documentation and additional trading resources to stay informed and maximize their trading potential.
Further Reading
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