Binance portfolio margin account

[Oshosondy]

I would have posted this under exchanges, but I think I may get the right answer here on the trading discussion board.

I have some coins on Binance which I recently put under portfolio margin, I noticed that the amount that I can use to trade is more than 3 times lower than my assets value.

Assuming I have $58 on the portfolio margin account, I only saw $17 to trade with which I think does not making sense.

Or is there something like I do not get right? Like a place I can increase the percentage.

If I want to trade with most of the asset, it has to be a stable coin backed by fiat.

I am not implying that I should see the while $58, but I supposed to see up to $48 that I can use to open a position. $17 to open a position from $58 is too small.

[Wiwo]

I am not implying that I should see the while $58, but I supposed to see up to $48 that I can use to open a position. $17 to open a position from $58 is too small.

The only open option for you to increase your is to increase your account equity above the minimum threshold to increase your available liquidity, Binance have a fee deducted as risk management on none stablecoins asset, because their are not valued at 100% of their price on the merging market, so the collateral deduction is held by binance incase the market goes against you.

You can use fiat backed stablecoins like USDT and USDC to give you full collateral value, which does not take any risk management charges and give 100$ value of the coin. Instead of using a highly volatile stablecoins for the portfolio merging.

[Dr.Bitcoin_Strange]

Assuming I have $58 on the portfolio margin account, I only saw $17 to trade with which I think does not making sense.

Or is there something like I do not get right? Like a place I can increase the percentage.

Yes, that's because each coin has a collateral ratio, the more volatile the coin is, means that it's more likely to have a large discount. So, what binance did here is discount your coin at 70.6%. So, It's normal depending on the coin you have in your portfolio margin.

If I want to trade with most of the asset, it has to be a stable coin backed by fiat.

Yes, stable coins have more collateral value than any other volatile coins.

[Oshosondy]

Yes, that's because each coin has a collateral ratio, the more volatile the coin is, means that it's more likely to have a large discount. So, what binance did here is discount your coin at 70.6%. So, It's normal depending on the coin you have in your portfolio margin.

Yes I know, but it is insane on Binance. I still prefer it on Bybit. MEXC have fewer coins but I like how it is there also. I can imagine to have $58 on algo, doge and dash and I can only use just $17 to trade. It is really insane in my opinion. Gate wants to be like Binance, but I can still access up to 50% there. I am not using it to trade like that also because of this, but Binance made it to the next frustrating level of closer liquidation price.

[BitMaxz]

Yes I know, but it is insane on Binance. I still prefer it on Bybit. MEXC have fewer coins but I like how it is there also. I can imagine to have $58 on algo, doge and dash and I can only use just $17 to trade. It is really insane in my opinion. Gate wants to be like Binance, but I can still access up to 50% there. I am not using it to trade like that also because of this, but Binance made it to the next frustrating level of closer liquidation price.

On Binance those coins' collateral ratio is lower, unlike having a coins like USDT and most stable coins. For Bitcoin and other major coins like ethereum Binance offer 95% collateral ratio.
It means this is the cause why you can only trade $17; however, if you can exchange them to major coins or stable coins, you can use them nearly 100%.  

Check more lists here: https://www.binance.com/en/futures/trading-parameters/perpetual/portfolio-margin/collateral-ratio

[Dr.Bitcoin_Strange]

Yes, that's because each coin has a collateral ratio, the more volatile the coin is, means that it's more likely to have a large discount. So, what binance did here is discount your coin at 70.6%. So, It's normal depending on the coin you have in your portfolio margin.

Yes I know, but it is insane on Binance. I still prefer it on Bybit. MEXC have fewer coins but I like how it is there also. I can imagine to have $58 on algo, doge and dash and I can only use just $17 to trade. It is really insane in my opinion. Gate wants to be like Binance, but I can still access up to 50% there. I am not using it to trade like that also because of this, but Binance made it to the next frustrating level of closer liquidation price.

I just think that Binance usually overdoes things if they mean to take from customers. Remember when I came here to complain about how Bybit was overcharging me for funding fees and other fees I said I didn't know what they were charged for? I moved my capital to Binance, and the fees there were even worse compared to Bybit, so I had to return to using Bybit. What I'm just saying, in essence, is that every exchange has its own collateral ratio attached to those coins in Portfolio Margin.

Based on your own statement, you already know that using stablecoins gives your capital a lower discount, so if you just love using Binance, you can convert to stablecoins, or better still, use Bybit, which you said is better. I get your point.

[Hamza2424]

I just think that Binance usually overdoes things if they mean to take from customers. Remember when I came here to complain about how Bybit was overcharging me for funding fees and other fees I said I didn't know what they were charged for? I moved my capital to Binance, and the fees there were even worse compared to Bybit, so I had to return to using Bybit. What I'm just saying, in essence, is that every exchange has its own collateral ratio attached to those coins in Portfolio Margin.

Based on your own statement, you already know that using stablecoins gives your capital a lower discount, so if you just love using Binance, you can convert to stablecoins, or better still, use Bybit, which you said is better. I get your point.

What is the main difference between the collateral they are giving on both Bybit and Binance?

I would not blame Binance either, as I think they have their reasons to manage funds like this because if they don't apply the safety discount, then they might have to face liquidity problems.

As this discount or cut, you can say, is known as a collateral haircut, and they do it for a great reason, which we can already assume is to save the exchange from a liquidity crunch.

For example, with his $58 collateral, let's say he took $58, which they don't give, but for the sake of this let's say they do. He opens a $200 long position, and the market falls by at least 20%, so his portfolio is down 20%. He will lose at least $40 from his $200 long position, and his portfolio collateral will become at least $46.

The remaining equity is now around $6. So let's say the market falls another 5% to 10%. The additional position loss will be like $10 at 5%, and the equity will become -$3.

Now imagine millions of users utilizing this loophole and crushing the liquidity, and eventually their ceiling will be hit. It is not like they don't have specific liquidity for the deficit. They have it, like they call it the margin insurance fund, which covers it. If we want another FTX collateral issue, then if we read their history, that's exactly what happened there. Their illiquid token issued by FTX was used as collateral for loans to Alameda, and when the valuation inflated, then we all know what happened.

Loans are a curse, bro, so be on the safer side and don't try to exploit the system by wishing to have one haha. These exchanges have learned their lesson already.

[Alphakilo]

I would have posted this under exchanges, but I think I may get the right answer here on the trading discussion board.

I have some coins on Binance which I recently put under portfolio margin, I noticed that the amount that I can use to trade is more than 3 times lower than my assets value.

Assuming I have $58 on the portfolio margin account, I only saw $17 to trade with which I think does not making sense.

Or is there something like I do not get right? Like a place I can increase the percentage.

If I want to trade with most of the asset, it has to be a stable coin backed by fiat.

I am not implying that I should see the while $58, but I supposed to see up to $48 that I can use to open a position. $17 to open a position from $58 is too small.

One thing I can tell you about portfolio margin account is that it's mainly for big pocket institutions and traders that trade derivatives in high volume and may be holding spot BTC while shorting BTC futures. Your funds amount may just be too small and that is one of the reasons for what your are seeing and calculating.
You still got more research to do because Binance has different ways it handles non fiat assets under different modes.

[PostQuantumBTC]

One thing I can tell you about portfolio margin account is that it's mainly for big pocket institutions and traders that trade derivatives in high volume and may be holding spot BTC while shorting BTC futures. Your funds amount may just be too small and that is one of the reasons for what your are seeing and calculating.

That is not it, if you have higher amount of money, you will still see it in 3:1, but as you added more money, the amount you can use for position will also be increasing but maintaining that 3:1 of your asset to the amount that you can use to trade.

Any traders that understand trading will be able to trade with little amount but most of them are just very greedy.

[shinratensei_]

I just think that Binance usually overdoes things if they mean to take from customers. Remember when I came here to complain about how Bybit was overcharging me for funding fees and other fees I said I didn't know what they were charged for? I moved my capital to Binance, and the fees there were even worse compared to Bybit, so I had to return to using Bybit. What I'm just saying, in essence, is that every exchange has its own collateral ratio attached to those coins in Portfolio Margin.

In my opinion Binance is reasonable, these exchange don't want bad debt and volatile coin is a risk, you can say that exchanges' trust on a coin is reflected by the collateral ratio they give and the tiered collateral ratio. When you remember Aave took $120m loss because of a bad debt even worse on euler or most looping defi, it become obvious that the Tier 1 exchange action to not trust highly volatile coin is wise to keep themselves from facing insolvency especially when you allow a coin that can dump 99% or rug as a collateral. They don't want the risk to creep up even though it's understandable people want more capital efficiency and very low collateral ratio is disappointing.

In a nutshell, the buffer is needed so the exchange is able to liquidate position even in the extreme case of low liquidty which lets be honest happens a lot with altcoins.

[Dr.Bitcoin_Strange]

I just think that Binance usually overdoes things if they mean to take from customers. Remember when I came here to complain about how Bybit was overcharging me for funding fees and other fees I said I didn't know what they were charged for? I moved my capital to Binance, and the fees there were even worse compared to Bybit, so I had to return to using Bybit. What I'm just saying, in essence, is that every exchange has its own collateral ratio attached to those coins in Portfolio Margin.

Based on your own statement, you already know that using stablecoins gives your capital a lower discount, so if you just love using Binance, you can convert to stablecoins, or better still, use Bybit, which you said is better. I get your point.

What is the main difference between the collateral they are giving on both Bybit and Binance?

The difference can be much depending on the coins or token your have in your portfolio margin and based on what I just learned, the collateral value also depends on your margin tier and both exchange can also reduce or increase the collateral value depending on market risk, so  based on the other explanation you gave which I quit I understand, traders can not actually take advantage of any loophole because the exchanges already have their own risk management measures so they didn't make these collateral value fixed but  it is dynamic depending on risk system the exchanges apply. But I read that binance can be more aggressive in assignment this collateral value on your coins compared to bybit, depending on the coin you are holding, although I have not practically verify because I don't have altcoins in those exchange to verify. OP can practically do this and update us since he has coins there to compare both exchange.

[Hamza2424]

But I read that binance can be more aggressive in assignment this collateral value on your coins compared to bybit, depending on the coin you are holding, although I have not practically verify because I don't have altcoins in those exchange to verify. OP can practically do this and update us since he has coins there to compare both exchange.

I would like to know if he could tell us the exact details. Although I can check as well, I don't have funds on Bybit. These companies have billions of assets, and they have to think from every single angle, like how to manage all that liquidity to make a profit, how to do business with their clients on Binance or any other platforms, like BNB projects and affiliations, etc.

They also have to monitor loopholes like this one, which, if they don't give second thoughts to, anyone could misuse them and become rich overnight. Although the funds won't be withdrawn, like when an exchange in South Korea accidentally sent BTC to every airdrop participant while they were supposed to receive tokens.