Binance continue their mission to add a perpetual swap for all altcoins ever created
A week or so back Binance added a perpetual swap market for Litecoin (see my earlier post).
Now they've added Stellar Lumens (XLM) :https://www.binance.com/en/support/articles/360038969011
THIS IS SUPER NOT FINANCIAL ADVICE, I AM NO KIND OF TRADING WIZARD AND IF YOU LOSE MONEY THAT'S ON YOU.
what's a perpetual contract?
I'll write this up more fully in a longer post if there's any interest, but basically, you're trading IOUs for XLM rather than XLM itself.
The point is, you aren't buying XLM that you can withdraw.
If you sell (or 'short'), you're borrowing IOUs to sell now at a given price in the understanding you'll pay for them in the future
(preferably at a lower price, if you want to make a profit). In laymans terms, you're bettting the price goes down.
If you buy (or 'long'), you're buying IOUs at a given price to sell in the future (preferably at a higher price). You're betting the price goes up.
This can be 'leveraged' - you might only have enough to buy 10000 XLM, but with 75x leverage, you can 'buy' 750000.
so if the price goes up 1 cent, instead of making $100 you make $7500.
This can be a good way to amplify your profits if you want to trade Stellar.
DISCLAIMER: this also means if the price goes the wrong way instead of losing $100, you lost $7500.
Done badly, this will get you rekt faster than anything else in crypto. PLEASE keep your leverage low or you will liquidate your account faster than you can blink.
But I've had a lot of fun trading BTC/USDT and ETH/USDT markets in the last couple of weeks.
If you feel like this might be fun for you too, and want to find out more, check the official Binance docs
- futures market documentation :https://binance.zendesk.com/hc/en-us/sections/360006051372-Binance-Futures
- Binance youtube channel :https://www.youtube.com/watch?v=7dvPkSnPQXY&list=PL7tuIcOmlNNJbE40sYyAfhZWDWlEjLD-I
If you only watch one, make it the one on how stop losses work.
You will be wrong sometimes, and stop limit orders are the only reason I haven't lost all my money yet.
(NB: I don't do referral links, if you found this interesting toss a coin to your witcher with the Tip menu below).