How to open a Margin Trading account on Binance
You will now be on your account dashboard. You can see your account balances from this page. Below “Balance Details”, click on “Margin” to begin the process of opening your margin trading account on Binance. You will need to have completed identity verification (KYC) and make sure your country is not on the blacklist. It is also mandatory that you enable 2FA.
Next, you will see a pop-out window about the margin trading quiz. Please complete it and, if you are willing to proceed, click on the “Start the Quiz” button.
How to transfer funds
After activating your margin account, you will be able to transfer funds from your regular Binance Wallet to your Margin Trading Wallet. To do so, click on the “Wallet” tab, select “Margin” and click on the “Transfer” button on the right side of the page.
Input the amount you want to transfer from your Exchange Wallet to your Margin Wallet and click “Confirm transfer.”
How to borrow funds
After selecting the coin you wish to borrow and the amount, click “Confirm Borrow.”
You can check your current margin account status by going to your “Wallet Balance” page and selecting the “Margin” tab.
The Margin Level
The risk level changes according to the market movements, so if the prices move against your prediction, your assets can be liquidated. Note that in case you are liquidated, you will be charged extra fees.
The formula to calculate the margin level is:
Margin Level = Total Asset Value / (Total Borrowed + Total Accrued Interest)
Click on “Positions” to check detailed information about your current positions. If you prefer to see the values in USDT, select “USDT Benchmark” on the right side.
How to trade on margin
How to repay your debt
To repay your debt, click on the “Borrow/Repay” button and select the “Repay” tab.
The total amount to be paid is the sum of the total borrowed plus the interest rates. Make sure you have the required balance before proceeding.
When you are ready, select the coin and amount you wish to repay, and click “Confirm repayment.” Note that you can only use the same cryptocurrency to make the repayment.
Moving funds back
If you wish to move your funds back from the Margin Wallet to your regular Binance Wallet, click on “Transfer” and use the button in-between the two wallets to change the direction of the transfer. Next, select the coin and amount and click “Confirm.”
Alice believes the price of BNB will go up, so she wants to open a leveraged long position on BNB. To do so, she first transfers funds to her Margin Wallet and then borrows BTC. Next, Alice uses the borrowed BTC to buy BNB.
If the price of BNB goes up as Alice expected, she can sell her assets and repay the borrowed BTC along with the corresponding interest. Any leftover for that trade will represent her profits.
However, margin trading can amplify both the gains and the losses. So if the market moves against Alice’s position, she will have bigger losses.