How To Short Crypto On Binance? A Step-By-Step Guide

Binance stands out as the premier choice for cryptocurrency shorting, boasting an intuitive futures trading interface, extensive coin coverage, and robust liquidity.

By adhering to our guide, you can swiftly engage in shorting activities for Bitcoin, Ethereum, and a plethora of alternative coins on Binance.

To initiate short positions, the primary step entails the activation of your Futures account on the platform.

How to short crypto on Binance?
Image source (CoinLedger)

How to activate your Binance Futures account

To access USDS-M Futures on Binance, log into your account and navigate to the derivatives menu or tap the “Futures” tab if you’re on mobile.

Utilize the code “10indirim” during the creation of your Futures account on Binance to enjoy a 10% discount on trading fees.

If you don’t see the “open futures account” form, you can explore various buttons like buy and sell on the futures trading page.

For mobile users unable to locate the Futures tab, click on the user icon and switch to Binance Pro.

To short crypto on Binance without an account, either click the provided button or use referral ID “WRYOO8BZ” to open an account with a 20% fee discount.

Additionally, refer to our tutorial on mobile account creation for detailed step-by-step guidance.

How to open a short position on Binance Futures

To short crypto on Binance, first click ”USDS-M Futures” under the derivatives menu on Binance’s website or the ”Futures” tab on mobile.

If you can’t see the Futures tab on mobile, click the user icon and then switch to Binance Pro.

How to select the futures contract / pair to trade on Binance

To initiate a short position with stablecoins like USDT and BUSD, access “USDS-M” and choose the desired trading pair (futures contract) by selecting “BTCUSDT” (indicated by the red arrow).

When shorting cryptocurrencies such as Bitcoin and Ethereum, if you prefer to utilize the actual coin as your margin instead of USDT or BUSD, opt for COIN-M pairs for trading.

Once you’ve clicked on the pair “BTCUSDT (perpetual),” proceed to select the cryptocurrency you wish to short.

How to transfer USDT to your Futures wallet on Binance

Click the transfer icon beside your balance to transfer USDT from your spot wallet to USDS-M Futures wallet.

You can then use your USDT balance to open a short position.

What is asset mode on Binance

When you click the letter ”S” next to leverage, you can change the asset mode. If you use the isolated margin mode, you don’t need to and can’t change the asset mode.

If you use the cross margin mode and want to use multiple assets such as USDT, BUSD, BTC and ETH as your margin to trade USDS-M Futures contracts, you can select the multi-assets mode.

How to place a sell / short order on Binance

After you choose the margin mode and leverage, click the sell button to execute your sell/short order.

Opt for “limit” to specify your short position’s opening price (2), or select “market” to open your position at the prevailing market price.

Once you adjust the position size (3) and verify your margin cost, proceed to click the sell/short button (4) to submit your order to the market.

Beginners might find it challenging to grasp the interplay among margin cost, leverage, and position size.

For instance, employing 2x leverage will approximately double your position size (BTC quantity * entry price) compared to your margin cost.

Thus, with a 100 USDT margin, you can potentially open a position worth around 500 USDT using 5x leverage.

Your sell/short order will appear under “open orders” until it is executed.

Once your sell/short order is filled, your short position will be active and visible under “positions.”

Read more: What are crypto derivatives?

How to close your futures position on Binance

To close your short position, you can use the ”close position” button.

Enter a certain price at which you want your short position to be closed or select the market order type.

After entering a certain amount of position size or selecting 100%, you can place your order in the market by clicking the confirm button.

When you place a stop loss, take profit order, or a close order for your short position, the system will display it as a “buy” order.

As you place sell/short order to open a short position, you need to place a buy/long order to close your short position.

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