Binance Futures - Leveraging Risks

[MikeGr]

Even though I have traded on Binance, I have never used Binance Futures and I have never used leveraging.

What concerns me is the risk. But what I find most worrisome, is I have heard that with leveraging, you can end up losing more than your capital. What do I mean by this?

What I mean is, lets say I have $1000 on Binance balance. I use leveraging and I lose $1200, that will mean my balance is -$200. Yes minus!

Which means I would OWE $200, and will have to pay that unless I want legal action taken against me.

Please correct me if I am wrong as I would love to hear that.

Otherwise, leveraging is very dangerous. You could endup losing your house!

Is it possible to lose more than the capital when using leveraging?

[jackg]

No it is not possible to lose more than your margin while leveraging.

Most exchanges have buffer solutions for liquidating positions to incur as little risk as possible for both the exchange and the user. For crypto, it's normally a small amount of the margin that's collected as an "insurance fund/pool" and for other assets it might be done by triggering other orders or refinancing assets temporarily on the side of the exchange to balance everything back out.

[tbct_mt2]

Your collateral will be liquidated by Binance if your future position touches the limit at which liquidation will be triggered.

Binance don't have good reputation about their Future trading. I read many complains that why their orders were not filled in Future market on Binance. It means they lost opportunities to get profit. Oppositely, when the market is bad, their collaterals are more easily to be filled and liquidated.

Only Binance have beneficiaries, not customers and future traders.

Generally Future trading is very risky not only on Binance.

[airdata]

I don't even go near futures trading becouse i know something about futures trading that it is very risky trading. Trader can loss their all fund in future trading and also i see that my friend, first time he maked and increase their portfolio but next time he lost their all fund.           

[RokokGudangGaram]

No it's not possible I'll try it to put on simple words, lets say you have $100 consider it as a load before you can place short or long you will be asked what is your leverage x3, x5, x10 or so on after that you will enter your trade let's say short, but the price goes up by 1% and your leverage is x5 you will lose 5% on your money. Your position will be closed once your deposited money is depleted so it's impossible that you will owe binance since you will be depositing your money in the first place.

[cryptoaddictchie]

Which means I would OWE $200, and will have to pay that unless I want legal action taken against me.

Nope not possible. In addition to what others said, only the funds deposited on your future account would be affected especially if you are using cross chain future. Isolated trading is quite different only those position will be liquidated if ever your target has been reeach.

You cant have a debt with that, since they only incurred funds on your future account.

Ive been trading futures and stopped it few months ago due to the risk associated.

[palle11]

Which means I would OWE $200, and will have to pay that unless I want legal action taken against me.

Please correct me if I am wrong as I would love to hear that.

No I think you are not correct about your explanation. First online trading is not a physical interphase trading that you see your buyer or seller standing right in your front that you can explain a spoilt product to. As far about online, everything is done there and that is the pattern. For leverage and trading, you can owe the broker but you are supported of funds online there in your platform to have more trading opportunity and diversification but if the leverage seem to be at risk from your lose, the leverage is deducted at some point and allow you to take the risk alone which affects your pocket.

[aquafinewater]

Future trade is always risky but if do with in rule then we can get a best benefit some important rule are Use best coin which have a big news and buy in dip and use low leverage if use high leverage high risk so 20X is best

[teosanru]

Even though I have traded on Binance, I have never used Binance Futures and I have never used leveraging.

What concerns me is the risk. But what I find most worrisome, is I have heard that with leveraging, you can end up losing more than your capital. What do I mean by this?

What I mean is, lets say I have $1000 on Binance balance. I use leveraging and I lose $1200, that will mean my balance is -$200. Yes minus!

Which means I would OWE $200, and will have to pay that unless I want legal action taken against me.

Please correct me if I am wrong as I would love to hear that.

Otherwise, leveraging is very dangerous. You could endup losing your house!

Is it possible to lose more than the capital when using leveraging?

No it's not possible to lose more than your capital no matter how much leverage you take out, even if your leverage is 100x, which means you have just $1000 but you are buying and selling cryptos worth $100,000. The limit here actually is set by the liquidation point, if you buy BTC at $45000 for example, you will be given a liquidation point based on your leverage, let's you take 10x leverage and your liquidation point is $42000. This would mean that if price of BTC goes below $42k your whole capital will be gone. You won't owe anyone anything but even if the price goes back up again you will not be given your position back which means exchange would sell the trade on your behalf, this liquidation point is basically set in such a way that only your capital is in the trading limit.

[Rengga Jati]

Even though I have traded on Binance, I have never used Binance Futures and I have never used leveraging.

What concerns me is the risk.

Exactly, futures trading is very risky, and if we are really not ready with the risks, we are new to crypto, or even we have not known yet about future trading or trading with leverage, it is better to avoid, or not to trade in it. High risk is the reason why.
Although some people (who have been experienced or professional) often get big profits from future trading, never only get desired and tempted because of it.

What concerns me is the risk. But what I find most worrisome, is I have heard that with leveraging, you can end up losing more than your capital. What do I mean by this?
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Is it possible to lose more than the capital when using leveraging?

You will lose maximally the capital that is in your futures trading account.
And what it is said, probably is about the margin.
If you want to trade in futures, you will need an initial margin to set. And most future traders will not put all capital into that initial margin. I personally will only put maximally 4% (mostly only 2-3% is enough for me  ) of my funds with some sometimes higher leverage. This is in order to minimize the risks of liquidation and also losing much more money.

And once the price, unfortunately, goes up or down inversely proportional to your position (short/long), not in accordance with the price movement you set (you set a "long", but the price actually falls continuously), and you do not set SL / CL or do hedging (hedge mode), and this is left alone continuously, so that there is also liquidation, then you will lose more money than you set in the initial margin, and this can cause all money loss in your Future Trading account.

That is why in my personal opinion, setting CL/SL and also (hedge mode) in future trading is very important for me (but everybody may also have a different view).

See more details about future trading here:
Ultimate Guide to Trading on Binance Futures

[Mpamaegbu]

What concerns me is the risk. But what I find most worrisome, is I have heard that with leveraging, you can end up losing more than your capital. What do I mean by this?

What I mean is, lets say I have $1000 on Binance balance. I use leveraging and I lose $1200, that will mean my balance is -$200. Yes minus!

No, that's not true. You can't exceed your capital when in loss but you can exceed it when in profit. What brokers do (just like exchanges trading Futures) is to give you leverage on your capital by multiplying it and allowing you assess to trade more than ordinarily your capital can take. But once your loss in attempting to go beyond your initial capital the platform will automatically close your position(s). In essence, the trader bears the loss alone. No exchange allows you an overdraft. You can't lose more than your capital.

Otherwise, leveraging is very dangerous.

Leveraging on crypto assets is like trading Forex or Binary. Again, trading in general is like every business engagement. There are risks and gains involved. You don't expect profit alone. Also prepare for loss when it comes.

[YOSHIE]

Is it possible to lose more than the capital when using leveraging?

I often hear on Binance (futures trading system), but I never did at all until now, the goal is: for me and I completely understand the system it works for trading futures.

Just additional information for the OP: Crypto Futures Trading: Things You Need to Know Before You Begin