Binance — Multi Assets Mode Explained in Short!
We can use two types of contracts in Binance Futures, USDT-M, and BUSD-M.
Both contracts are different but the Multi-Assets Mode allows users to share the margin between both contracts. This means that the profit of one position can be used as a margin for another losing position.
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Video Tutorial
The video will be easier to understand. If you prefer a written article, continue reading…
Multi Assets Mode →
- Multi Assets Mode connects both(USDT & BUSD) stable coins to each other. When your BUSD position will be in loss, the USDT coin will act as a margin and when your USDT position will be in loss, the BUSD coin will act as a margin.
- Multi Assets Mode works only in Cross Margin.
- You cannot activate multi assets mode if you have open orders or positions.
Let’s understand Multi Assets Mode with an example.
Suppose Paul is using Single Asset Mode and He has 50 USDT and 50 BUSD in his Futures Wallet.
He opens BTCUSDT Long position and an ETHBUSD short position.
His long position starts going in profit and his short position starts going in loss. After a few hours, his long position is in 50 USDT profit and his short position is in 45 BUSD Loss.
Now he will have to add more margin to the short position to avoid liquidation because he has only 50 BUSD in his futures wallet.
Let’s see what would have happened if he had opened the same positions in multi-asset mode.
After switching to multi assets mode, the Profit of his long position will work as a margin for the short position.
Now, Paul can hold both positions without adding margin in his losing position unless both positions are liquidated.
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I hope you found this short article helpful. But If you have any queries and questions, feel free to ask in the comment section below.
