According to an announcement released earlier this week, Major cryptocurrency exchange Binance will launch the NEO/USDT futures and traders will be able to use leverage of up to 50x when trading the contract.
Leveraged trading refers to using more money than is in a trader’s account to amplify the moves in a given market, so that the gains are larger for the trader. This is a risky way to trade.
The exchange imposes a 2% base initial margin rate on the contract, a 1% base maintenance margin rate and a 0.5% liquidation fee. These are very competitive rates, and will likely be attractive to NEO traders.
NEO is Getting Bigger
According to the Binance information page dedicated to NEO, the NEO token is an open-source platform that is driven by its community. It uses blockchain to power smart contracts and digital identities.
Binance describes NEO:
“Neo is an open-source platform driven by the community. It utilizes blockchain technology and digital identities to digitize and automate the management of assets using smart contracts. Using a distributed network, it aims to create a smart economy by building infrastructures of the next-gen Internet and creating a solid foundation for mass blockchain adoption.”
Also, the page states that third version of its software (Neo3) is due for an upbrade this year:
“Launched in 2016, the Neo MainNet has been in stable operation for more than 3 years. Neo is expecting to launch Neo3 in 2020, a robust implementation with high throughput, enhanced stability and security, and optimized smart contract system, and a feature-packed infrastructure set to empower developer adoption and to accelerate enterprise-grade blockchain innovations.”
Futures are Popular in the Crypto Markets
Futures contracts allow speculation on things that would otherwise be difficult to trade and often feature high leverage trading.
Binance commented on the potential for a much deeper futures market on the platform:
“We are looking to add 20 or 30 trading pairs on Binance Futures, and will consider the most liquid 20 to 30 pairs first.”
Futures also allow for speculation on political and social events. Cryptocurrency derivatives exchange FTX launched a contract earlier this month which allows traders to bet on President Donal Trump’s reelection in 2020.
FTX then announced plans to launch five additional 2020 presidential election-based futures products in a few days later, products including a Bernie Sanders (BERNIE) futures trading product, futures on Joe Biden (BIDEN), Elizabeth Warren (WARREN), Pete Buttigieg (PETE) and Mike Bloomberg (BLOOMBERG).
The crypto markets are growing all the time, and adding new products across a range of markets. These new products will likely attract new liquidity to the marketplace, and help innovators like Binance to expand its line of trading products.