Crypto Trading Binance Futures 3 — Questions and Answers
Question 1: A trader opens a 10x long on BTCUSDT. Roughly what adverse price move liquidates the isolated position, ignoring fees?
- About a 10% drop (Correct answer)
- About a 50% drop
- About a 1% drop
- About a 90% drop
Correct answer: About a 10% drop
At 10x leverage, an isolated position is roughly liquidated by a price move of about 1/leverage, near 10% against you (minus maintenance margin).
Question 2: What is a 'Reduce-Only' order on Binance Futures?
- An order that can only decrease an existing position, never flip or increase it (Correct answer)
- An order that only executes at market open
- An order that reduces your leverage
- An order that lowers trading fees
Correct answer: An order that can only decrease an existing position, never flip or increase it
A Reduce-Only order will only close or shrink your current position and will not open a new one in the opposite direction.
Question 3: In Hedge Mode on Binance Futures, what is allowed?
- Holding long and short positions on the same symbol simultaneously (Correct answer)
- Using more than 125x leverage
- Trading without any margin
- Avoiding all funding payments
Correct answer: Holding long and short positions on the same symbol simultaneously
Hedge Mode lets a trader hold both a long and a short position on the same contract at the same time, unlike One-Way Mode.
Question 4: What does the 'Taker' fee apply to on Binance Futures?
- Orders that fill immediately by removing liquidity from the order book (Correct answer)
- Orders that add liquidity as resting limit orders
- Only stop-loss orders
- Only orders during funding settlement
Correct answer: Orders that fill immediately by removing liquidity from the order book
Taker fees apply to market orders or aggressive limit orders that execute instantly against existing book liquidity.
Question 5: How often does funding settlement typically occur on standard Binance perpetual futures?
- Every 8 hours (Correct answer)
- Every hour
- Once per day
- Every minute
Correct answer: Every 8 hours
Standard Binance perpetual contracts settle funding every 8 hours, though some volatile pairs use shorter intervals.
Question 6: What is the function of a Stop-Market order on Binance Futures?
- It triggers a market order once the stop price is reached (Correct answer)
- It guarantees execution at the exact stop price
- It only works in Spot trading
- It cancels the position without filling
Correct answer: It triggers a market order once the stop price is reached
A Stop-Market order fires a market order when the trigger price is hit, prioritizing execution speed over a guaranteed price.
Question 7: What does the 'Insurance Fund' do on Binance Futures?
- Absorbs losses from liquidations that close below bankruptcy price (Correct answer)
- Pays out funding to all traders
- Guarantees profits on every trade
- Refunds trading fees monthly
Correct answer: Absorbs losses from liquidations that close below bankruptcy price
The Insurance Fund covers the gap when a liquidated position is closed at a worse price than its bankruptcy price, protecting the system from negative balances.
Crypto Trading Binance Futures 3
A trader opens a 10x long on BTCUSDT.
Roughly what adverse price move liquidates the isolated position, ignoring fees?