BINANCE DUAL INVESTMENT

pillar smith

7 min readApr 29, 2022

29/04/2022

By Emmanuel Adeniyi

Key points:

What is Dual investment
Buy Low Sell High with Dual Investment
(i) up-and Exercised
(ii) Down-and Exercised
How does Buy Low Dual Investment work
How does Sell High Dual Investment work
Key Terminologies used in Dual Investment
Spot Limit Order vs Dual Investment
Key benefits of Dual Investment
Dual Investment mobile Flow
Risk involved in Dual Investment
Upcoming improvements
Conclusion

WHAT IS DUAL INVESTMENT?

Dual Investment allows you to buy low or sell high cryptocurrency at your desired price and date. You can also earn high interest yield for the asset. Dual Investment is a non-principal protected structured product. Upon subscription, you can select the underlying asset, deposit currency, subscription amount, and settlement date. Your return will be denominated in the deposit currency or alternate currency, depending on the below conditions.

BUY LOW AND SELL HIGH WITH DUAL INVESTMENT

You can Buy Low or Sell High at your desired price at your
desired date while earning high interest yield.

1.For Buy Low products:

If the Settlement Price is below the Target Price, the target is reached

The target is reached if Settlement Price ≤ Target Price
The target is not reached if Settlement Price > Target Price

2.For Sell High products:

If the Settlement Price is above the Target Price, the target is reached

The target is reached if Settlement Price ≥ Target Price
The target is not reached if Settlement Price < Target Price

BUY LOW (DOWN-AND-EXERCISED)

In this type of Dual investment product there’s chance to BUY LOW at the target
price by the settlement date

Users deposit their stablecoin (BUSD or USDT) and
select strike price (a limit order price / target price)
at which the yare hoping to buy another currency
by the delivery date. On the delivery date, if the
market price is below the strike price, then the
order is filled and user’s subscription amount and

interest income will be used to BUY the other
currency at strike price. User will receive returns in
the bought currency.
The user receives the same amount that this user
deposited and also receives interest income in the
same currency.

SELL HIGH (UP-AND-EXERCISED)

In this type of Dual investment product there chance to Sell High at the target
price by the settlement date.

Users deposit their crypto assets (non-stablecoins)
and select strike price (a limit order price/target
price) at which they are hoping to sell this crypto
by the delivery date. On the delivery date, if the
market price is above this strike price, then the
order is filled and user’s subscription amount and
interest income will be SOLD at the strike price.
The user will receive returns in BUSD.
If on the delivery date the market price is below
the strike price, the order is NOT FILLED. However,
the user still earns interest income. The user
receives the same amount that this user deposited
and also receives interest income in the same
currency.

Note:

Regardless of whether the SELL HIGH or BUY LOW order
is filled or not, the user still receives the interest income.
The difference is that if the order is NOT filled, the user
receives interest income in the same currency as the
deposited currency. However, if the order is filled, the user
receives interest income in another currency

HOW DOES BUY LOW DUAL INVESTMENT WORK?

The stablecoin-based Dual Investment Buy Low products give users a chance to purchase the underlying asset with interest at a relatively low price at the time of settlement.

Let’s say you have 10,000 USDT and the current price of 1 BTC is $43,123. You subscribe to a 16-day Buy Low Dual Investment product with a 94.75% APY. The target price is set to $39,000.

After clicking the [Subscribe] button, you can see the details of the Buy Low product and the outcomes.

16 days later, one of two things will happen:

If the final settlement price of BTC is above $37,000, you get your 10,000 BUSD back plus interest worth 323 BUSD. You now have 10,323 BUSD.
If BTC is below or equal to $37,000, your 10,000 BUSD is paid out in BTC at a price of $37,000 plus extra interest. You now have 0.279 BTC.

HOW DOES SELL HIGH DUAL INVESTMENT WORK?

The BTC Sell High product lets BTC holders sell their bitcoin holdings at the desired price. Sell High products give users a chance to sell the underlying asset with interest at a relatively high price at the time of settlement.

With a Sell High product, if the settlement price is higher than the target price, the product is settled in BUSD and is considered “sold”. On the other hand, if the settlement price is lower than the target price, the product is settled in BTC.

Buy Low products work the opposite way. If the settlement price is lower than the target price, you buy BTC at the target price. If the settlement price is higher than the target price, the product is settled in BUSD.

So how are the interest rates calculated for this product? The APYs displayed fluctuate and are based on the target price, remaining days, and price volatility. However, your APY will lock in once you’ve subscribed to a Dual Investment product.

How does this work in practice?

Let’s say you have 1 BTC, and the current BTC price is $37,123. You want to subscribe to the top Sell High Dual Investment product outlined below. The target price is set to $39,000 with a 148.86% APY.

After clicking the [Subscribe] button, you’ll see more details on the product and your possible returns. If you type in 1 BTC, the outcomes are displayed underneath.

16 days later, one of two things will happen:

If the BTC final settlement price is above or equal to $43,000, your 1 BTC is paid out at $43,000 plus the extra interest. You now have $43,752.50 BUSD.
If the BTC final settlement price is below $43,000, you’ll get your 1 BTC back plus interest worth 0.0175 BTC. You now have 1.0175 BTC.

KEY TERMINOLOGIES USED IN DUAL INVESTMENT

1.Strike Price:

A Target Price at
which users will have a chance to buy low or sell high.

2.Delivery Date:

A set date at which you want to buy or sell cryptocurrency. The Settlement
Date at which users will receive the deposited
amount and interest yield.

3.Cut off Time:

This happens at 10:00 UTC on the Delivery
Date. This is the time when we determine whether the
user’s asset was executed to BUY LOW or SELL HIGH

4.Subscription Amount:

The user’s deposit amount, which

the user is hoping to use to buy another currency at a
lower price or to sell for another currency on the

Settlement Date

SPOT LIMIT ORDER VS DUAL INVESTMENT

Dual Investment is similar to Spot Trading Limit Order but it also has some differences in the picture shown below.

KEY BENEFITS OF DUAL INVESTMENT

1.High Yield:

One of the main of Dual Investment is that it helps users to earn potentially interest rate(APY)

2.Wide Selection:

Dual Investment offers variety of price level, APY and delivery date to select from

3.No Trading Fee:

It enable users to buy or sell crypto at your desired price without any fee.

DUAL INVESTMENT MOBILE FLOW

Two ways to find Dual Investment on mobile

Go to Binance mobile app > Go to Earn > High Yield >Dual Investment
Go to Binance mobile app > click MORE on the icon
section > Earn > Dual Investment

RISKS INVOLVED WITH DUAL INVESTMENT

The risk is exactly the same as buying or selling crypto at Spot

market with limit order. If I believed that current price is the
highest point for BTC, and I decided to sell BTC at this price,
however, tomorrow BTC price went further up, then I have sold
BTC at a relatively cheaper price. Vice versa for buying scenario.

Dual Investment is just like buying or selling at spot limit order,

but the settlement date (or execution date) is fixed (and user gets
interest income either way).

Key risk is that at the user is selecting the buying or selling price

and is not able to cancel that order once the order is made. At the

Delivery Date, if the price is further down from your strike price to buy or further up from your strike price to sell, then you would
have been better off not using Dual Investment

UPCOMING IMPROVEMENTS

Binance will be adding Beginner Mode for Dual Investment so that

new users can find it easier to use Dual Investment.

CONCLUSION

Binance Dual Investment allows you to earn passive income no matter which direction the market goes. If you’re an investor or trader that wants to do more than stake or lend your HODLed coins, you can monetize your market view and try to hedge market-beating prices with added interest. As always, make sure you do your own research on the topic before investing your funds.

To learn more and get started on Binance Dual Investment

https://www.binance.com/en/dual?ref=444177975

https://academy.binance.com/en/articles/a-quick-guide-to-binance-dual-savings?ref=444177975