Margin trading spot on Binance
For some more advanced traders that have proven to themselves that they have proper risk management, using margin to trade with more capital could be a next step in their trading career. One of the ways to go about this is by using leverage on Binance for spot trading. However, the process is not that user friendly as each trading pair has a specific isolated margin account. The net asset in each isolated margin account can only be used as a margin for the specific trading pair.
How to set up a margin trade on spot prices is explained by Binance here. Note that this page is focused on isolated margin trading, meaning that you cannot lose more than the money you put in isolated margin. Cross margin borrowing is also an option. Margin users can use the net assets in their cross margin account as collateral assets for cross margin trading. The leverage available differs per trading pair and ranges between 3x to 10x.
Read the trading rules associated with isolated an cross margin trading here:
There are extra costs associated with margin trading when compared to spot trading. With margin trading, you basically just borrow capital while using your own crypto as a safety margin. Therefore, there are borrowing costs associated with it. When closing a position, the loan and borrowing costs are repaid manually unless the automatic repayment function is selected when opening the trade. It is important to remember this. Otherwise, the borrowed funds will sit idle in the wallet and drive up your borrowing costs.
