Binance Futures Quiz Answers - Your Complete Guide to Passing the Test

Hey there futures trader! If you‘re looking to unlock futures trading on Binance, you‘ll need to pass the mandatory Binance Futures quiz first.

Not to worry, I‘ve got you covered! In this detailed guide, I‘ll be providing answers to the Binance Futures test with clear explanations so you can pass on your first attempt.

By the end, you‘ll have all the knowledge needed to start trading futures safely and responsibly. So let‘s dive in!

What Are Binance Futures and How Do They Work?

Before we get to the quiz answers, let‘s do a quick overview of what Binance Futures are and how they work.

Binance Futures are financial contracts that allow you to speculate on the future price of cryptocurrencies like Bitcoin, Ethereum, BNB and more. Instead of buying the actual coins, you can trade futures contracts that derive their value from the underlying asset.

Some key things to know about Binance Futures:

Leverage – Futures allow the use of leverage up to 125x. This means your profit (or loss) potential is multiplied by the leverage amount.
Long vs Short – You can go long if you think prices will rise, or short if you think they‘ll fall. This allows profits in both bull and bear markets.
Perpetual or Quarterly – Contracts are either perpetual, meaning no expiry date, or quarterly with an expiration date every 3 months.
Margin Trading – Leverage is possible through margin trading. You only post a percentage of the full value as margin.

Now let‘s go over the crucial concepts you need to understand that will prepare you for the quiz.

Key Futures Concepts to Know

Margin – This is the percentage of the total order value you need to deposit as collateral. The higher the leverage, the lower margin needed.
Liquidation Price – If the market moves against your position to this price, your position will be forcefully liquidated. This prevents further losses beyond your margin.
Mark Price – The fair global price used for margin trading and liquidations, aimed at preventing manipulation.
Unrealized PnL – Paper profits/losses that update live based on mark price. Does not account for fees.
Realized PnL – Actual profit or loss from closed positions based on entry/exit price. Accounts for fees.
Funding Fees – Exchanged periodically to converge prices on perpetual contracts to the spot index price. Goes to position holders opposite of price deviation.

Phew, that covers most of the key terminology! Now let‘s dive into those Binance Futures quiz answers so you can start trading.

Binance Futures Quiz Answers (UPDATED)

Below are the latest answers to the mandatory Binance Futures quiz as of January 2023. I‘ll provide an explanation for each question to ensure you fully grasp the concepts. Let‘s do this!

Question #1: What is the maximum loss that may occur when engaging in futures trading?

All futures wallet balance

Explanation: Unlike spot trading, losses in futures trading can exceed your margin deposit due to leverage. At max, your entire futures wallet balance can be lost if prices move severely against you.

Question #2: When futures balance is liquidated, what price is it based on?

Mark Price

Explanation: Liquidation occurs based on the Mark Price, not the last traded price. This ensures liquidations represent the global market price and are not manipulated by large orders on Binance.

*Question #3: Are you aware that after the future is forcefully liquidated, in addition to the loss of the position, Insurance Clear Fee (= Position nominal value Liquidation fee rate) will occur, which may decrease your futures wallet balance to zero?**

Yes, I am aware of the existence and calculation of the Insurance Clear Fee and the risks that may cause the balance to return to zero.

Explanation: It‘s critical to know you can lose your entire futures balance during liquidation due to the Insurance Clear Fee charged on top of losing your position. This fee ensures there are always funds to pay winners.

Question #4: There is a maximum number of orders for each future. Which action should I take?

Once the maximum quantity limit is reached, the order will fail, and an error will be reported. At this time, I should divide the order into several smaller quantities.

Explanation: If your order exceeds the maximum quantity allowed, you must divide it into smaller orders instead of trying to brute force the order through. System limits are for stability.

Question #5: Which of the following apply when using a stop-market order?

After the stop-profit and stop-loss price is triggered, the transaction will be executed immediately at the market price, and the transaction price may not be equal to the trigger price.

Explanation: With stop-market orders, execution occurs immediately once the stop price is reached. Therefore, the entry price can deviate from the trigger price based on market conditions.

Question #6: Which of the following is correct to use Stop-Limit Order?

After the stop-profit and stop-loss price is triggered, the order will be placed at the limit price immediately, but the limit order may not necessarily be filled because the price has moved away.

Explanation: A stop-limit order may not fill if the market price changes before the limit order executes after the stop price is triggered. There is no guarantee of execution.

Question #7: What kind of behavior should I avoid when engaging in futures transactions?

Strong gambling, trading addictions, continuous losses, and blaming others.

Explanation: Avoid reckless gambling behavior. Take personal responsibility for your trading decisions and losses – never blame external factors.

Question #8: To continue trading on the futures, I have:

understood the rules and risks of engaging in futures transactions, and I agree that any loss incurred in the transaction is my responsibility regardless of the platform.

Explanation: You must understand the inherent risks in futures trading and take accountability for your trading losses, win or lose. Losses are not the platform‘s responsibility.

Question #9: Due to network delays, system failures and other possible factors which may lead to suspension or deviation of Binance Futures service execution, Binance will use commercially reasonable efforts to ensure but not promise that Binance Futures service system runs effectively. Binance shall not be liable for the final execution results due to the above factors.

Agree

Explanation: You must agree Binance is not liable for potential losses caused by service disruptions. There are always risks involved when trading futures on any platform.

Question #10: Profit and loss (PnL) in futures are calculated by:

After closing a position, according to the opening price and closing price to calculate actual profit and loss.

Explanation: Realized PnL is only calculated after closing a position, based on the price difference between opening and closing the trade. Unrealized PnL does not account for fees.

Question #11: When you encounter a failure to trade constantly, you must:

Check the network and retain information for customer service.

Explanation: Contact customer support with details if you experience constant trading failures. Don‘t blindly retry the same order without checking for potential platform issues.

Question #12: Futures fees include:

In addition to the order commission, positions also produce capital expenses and liquidation expenses.

Explanation: Beyond trading fees, futures positions incur funding fees and potential liquidation fees. Be aware of all applicable fees.

Question #13: In Coin-margined futures trading, what kind of currency can be used as margin:

The currency of this future.

Explanation: For coin-margined contracts, margin must be posted in the same currency as the contract. So BTC futures require BTC as margin.

Question #14: In the event of a service disruption on Binance Futures, you may use the “close all positions” function to cancel all orders and close all open positions. However, due to unpredictable factors, the final execution result of this function might deviate from your expectations, and Binance shall not be liable for the final results.

Agree

Explanation: You must agree that Binance is not liable for potential failures when using the "close all" function during service issues. Networks can be unpredictable.

And that concludes all the answers to the Binance Futures quiz! I hope these detailed explanations help you fully grasp the core concepts you need to know prior to trading futures.

Key Takeaways from the Binance Futures Quiz

Let‘s recap some of the most crucial points:

Understand you can lose more than your initial margin deposit due to leverage. Manage risk prudently.
Liquidations are based on Mark Price to represent fair global value, not just the Binance spot price.
Various fees apply beyond trading commissions, like funding fees for perpetual contracts.
You must take personal responsibility for trading losses and risk management.
Binance is not liable for issues caused by potential service disruptions or network problems.

While futures allow great profit potential through leverage, they also magnify losses if used improperly. Always start with low leverage and small position sizes until you get better at risk management. Don‘t rush into high leverage out of greed. Be smart.

And most importantly, never trade money you can‘t afford to lose and avoid gambling addictive behaviors. Maintain a healthy mindset.

Okay, pep talk over! Now you have all the knowledge to ace the Binance Futures quiz.

Tips for Passing the Binance Futures Quiz

Here are some tips to ensure you pass the quiz smoothly:

Read carefully – Don‘t just skip through the questions. Read each one carefully and think about the answers.
Understand the concepts – Don‘t just memorize the answers. Make sure you actually grasp the underlying concepts.
Take your time – The quiz is not timed, so take your time thinking through each question.
Retake if needed – You can retake the quiz if you don‘t pass. Review the concepts and try again.
Use the explanations – Refer back to the detailed explanations provided in this guide if you‘re unsure of anything.
Don‘t stress – It‘s a learning experience, not a test. There‘s no limit to retakes.

If you follow these tips and review the answers, you should have no issues passing the Binance Futures quiz on the first try.

Next Steps After Passing the Binance Futures Quiz

Once you successfully pass the mandatory quiz, you‘ll gain access to trade futures on Binance. Here are some recommended next steps:

Start small – Deposit a small amount of funds and trade micro contracts with low leverage initially. Learn the ropes.
Paper trade – Practice futures trading risk-free using Binance‘s testnet portal to further refine your skills.
Learn technical analysis – Start applying indicators like moving averages to identify trading opportunities.
Develop a trading plan – Create a structured trading plan that outlines your risk management rules, trade criteria, position sizing etc.
Review results regularly – Track your performance to identify strengths and areas for improvement.

Take it slow, practice proper risk management, and grow your skills over time. With the basics covered in the Binance Futures quiz, you now have the foundation to start trading futures intelligently.

I hope these detailed explanations for all the quiz answers provide everything you need to pass on your first attempt! Feel free to refer back to this guide anytime you need to refresh your knowledge.

Let me know if you have any other questions. And good luck on your futures trading journey! The opportunities are endless if you stay disciplined. Talk soon!