How to short crypto currencies on Binance

TickCOM

Active member
117 18
Just wanted to comment on this - watched a video on YouTube of how to short on Binance, I had to watch it several times.

There are several issues shorting a symbol on Binance. To at all be able to short, one need to use a Margin wallet, which involves transferring coins from the Account wallet to the Margin wallet. The second one needs to realize, is that borrowing a coin asset, for trading in BTC, isnt really the right thing to do - as coins are highly cointegrated, and you find you get no where lending for example LTC for selling LTC/BTC. What we would like to do is to convert the account BTC to USDT, and trade only in XXX/USDT ! Converting BTC to USDT also mean we park the funds in USD, not in volatile coins. Besides, is we have our funds in BTC, and use part of these funds to borrow a coint asset trading it in BTC, we are exposed.

Have implemented the Binance Margin API, to see how it actually works from the API perspective. To short a coin, such as LTC is a two step process:

Initial account steps:
1. Transfer BTC from Base account to the Margin wallet, x3 Margin trading.
2. Convert the BTC to USDT

API short LTC:
1. Borrow LTC
2. Sell LTC/USDT

API close the position:
1. BUY LTC/USD
2. Repay the LTC you lended

The amount to repay is not equal to the Borrowed amount, as commission and a tiny intererst is added.

The complicated procedure to short, makes it attractive to short on Binance.
 
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